Africa-Israel CEO: Moscow mall to generate $150m. in 2012

Firm’s Russian development arm AFI Development plc opened the mall last month.

By YOSSI NISSAN/GLOBES
mall salesman 1 88 224 (photo credit: Courtesy)
mall salesman 1 88 224
(photo credit: Courtesy)
“The completion of the AFIMall City in Moscow will generate $150 million in revenue next year, and greatly boost our business,” Africa-Israel Investments Ltd. Izzy Cohen said at a conference Wednesday. The firm’s Russian development arm AFI Development plc opened the mall last month.
“Next month,” Cohen continued, “will mark the end of three exhausting years. We sold a lot of activities and assets, but we kept our core business. Most of the activities sold were not core businesses. Our group structure is sound and most construction and development is handled in-house by Danya Cebus Ltd. The rest of our activities are synergetic with our core business.
“In the past three years, the value of properties has eroded, and we reported large reductions in value, resulting in NIS 5 billion in losses and writeoffs.
This year, we greatly reduced the write-offs and were able to generate strong cash flow and increase our shareholders’ equity – strengthening the company’s capital – which allows us to look forward to expect a better future.”
Commenting on Africa- Israel’s new structure in the wake of its debt settlement, Cohen said “All the companies in the group created value and improved their operations.
This year’s results are good.
Most of the companies have little corporate debt, except for projects. The companies’ liabilities and capital structure is good and stable, which is a huge advantage.
“Shareholders’ equity is positive and improving at all the group’s companies. Market cap is of course low, and below shareholders’ equity, which we’ll correct in the coming years. We intend to greatly reduce our debt in the coming years, because it harms us. In real time and with high managerial maturity, we made a debt settlement on the best side possible. Since then, we’ve slashed the debt, which is a huge achievement. The settlement is important because the debt is smaller, which affects the companies’ ability to engage only in construction and development, and in the rest of our core businesses. It was important for me to close the short-term debt and give us some air to breathe.”
Africa-Israel’s share price rose 1.5 percent in morning trading to NIS 27.94, giving a market cap of NIS 2.9 billion.