Alon Group hopes to expand after Q3 profit soars

By YIGAL GRAYEFF
November 25, 2005 16:53

'The company has hundreds of millions of dollars in cash, which will allow it to double its operations in Israel and the US'.

2 minute read.



Awash with cash after the successful listing of its US energy unit on the New York Stock Exchange helped third-quarter net profit soar 16-fold, Alon Group is looking to expand. "The company has hundreds of millions of dollars in cash, which will allow it to double its operations in Israel and the US," the company said on Thursday. It didn't provide further details, but chief executive David Wiessman said, in an interview, that the expansion would take place via acquisitions. The company's plans suffered a blow earlier this month, however, when outgoing anti-trust commissioner Dror Strum blocked its attempts to buy gas station company Sonol from Granite Hacarmel Investments for $155m. For the three months ended September 30, Alon Group's net profit rose to NIS 541.7m. from NIS 35.7m. in the same period a year earlier. Excluding proceeds from the IPO, the figure still more than doubled to NIS 80m. while operating profit rose to NIS 314.8m. from NIS 199.8m. In its energy business, net profit rose to NIS 120.8m. from NIS 37.4m. and operating profit rose to NIS 262m. from NIS 156.5m. Alon Group holds 90% of Dor Alon Energy Israel, which listed in Tel Aviv in June, and 75% of Alon USA, which listed in the US in August. The company made NIS 556m. from the two initial public offerings. However, losses at its food division widened to NIS 13m. from NIS 2m., as net profit at supermarket chain Blue Square, in which Alon Group holds a controlling stake, slipped to NIS 17.7m. from NIS 18.9m. Wiessman cited three main reasons for the continued losses at the food division. First, when it bought 23.4% of Bronfman Alon, a holding company that owns Blue Square, for $30m., its financing expenses increased. The transaction gave the company majority control of Bronfman Alon as it already had owned a 50% stake. The increase in the consumer price index also hurt the performance of the food division, as did the closure of some Pizza Hut branches. Alon intends to move the franchise away from the operation of restaurants and focus on providing food for take-away and deliveries.


Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection

By GLOBES, NIV ELIS

Israel Weather
  • 6 - 13
    Beer Sheva
    13 - 15
    Tel Aviv - Yafo
  • 6 - 7
    Jerusalem
    11 - 12
    Haifa
  • 9 - 17
    Elat
    10 - 15
    Tiberias