Africa Israel reports NIS 4.9b. '08 loss

Global economy and real estate slowdown said to be behind largest losses in history of Israeli business.

lev leviev 248.88 (photo credit: Ariel Jerozolimski  [file])
lev leviev 248.88
(photo credit: Ariel Jerozolimski [file])
Africa Israel Group made history on Monday, announcing a 2008 loss of NIS 4.9 billion, the largest in Israeli history. This loss stands in sharp contrast to the company's NIS 4.4b. profit in 2007. The 2008 revenue of Lev Leviev's group dropped by eight percent compared to 2007, to NIS 2.7b. Besides the global economic crisis, the company attributed the huge losses to the drop in the value of the group's real estate holdings. A report released by Africa Israel shows that while in 2007 real estate devaluation cost the company NIS 173 million, in 2008, that figure rose to a whopping NIS 1.4b. Africa Israel reported a fourth-quarter loss of about NIS 2.7b. in March after the value of a landmark property, the former New York Times building, fell by $380 million. "There are better years and worse years, but that's the business," Leviev said at a press conference on Monday. "With the world economy fluctuating, it is our duty to present [our numbers] and discuss the problems and the future of Africa Israel. We have one of the best managements, and our future is ahead of us," he added. Leviev also speculated about the possibility of a government stimulus package aimed at rescuing troubled companies in Israel. "Instead of thinking what will happen if the tycoon falls, we need to think about how to help the public," Leviev said. "This is not to save the companies, but rather to save the public. Nobody is doing a favor for the tycoon, but rather we're talking about an extension with compensation of interest." "This is not a debt assistance," he continued. "The money will be returned with interest. There is currently a crisis and the banking establishment is incapable of giving credit, and there is no trust, so we need the help of the government to get the ball rolling in the economy." "I am not banking on this, and I hope to go on even without this help," Leviev said. "Even if five tycoons fall we will continue to live, in the end this is just money."