Supermarket chain Blue Square-Israel said on Wednesday third-quarter net profit slipped as a result of increased financing expenses. The operator of Co-op, Mega, Super Center, and Shefa Shuk also said it may spin off its real estate assets into a subsidiary company in order to maximize their value. Blue Square owns 84,000 square meters of undeveloped property, together with 240,000 meters of fully-owned stores, offices, and its Logistics Center. For the three months ended September 30, the grocer reported net income of NIS 17.7m., down from NIS 18.9m. in the same period a year earlier. Earnings per American Depository Share (ADS) fell to 46 agorot from 49 agorot, hurt by a 53% increase in financing expenses. Revenue, however, rose to NIS 1.59b. from NIS 1.38b., boosted by the collapse of the Clubmarket chain, which led to a substantial increase in the number of shoppers in Blue Square's stores. Sales also benefited from the opening of seven stores since last year, a stronger redemption of gift certificates compared with 2004, and the contribution of Kfar Hashaashuim, which Blue Square bought in May. Operating profit increased 15.4% to NIS 59.2m., the operating margin was unchanged at 3.7%, and same-store sales, or sales in outlets that were open in both reporting periods, rose 4.8%. Nine-month net income jumped to NIS 63.2m. from NIS 52.8m., earnings per ADS rose to NIS 1.63 from NIS 1.37, and revenue increased 8.3% to NIS4.32b. Blue Square president and chief executive Gil Unger said the marketplace was characterized by "irrational pricing policies, relentless competition and skyrocketing expenses," but that the company benefited from keeping to its business plan. "The primary driver of our growth continues to be the steady execution of a sane strategy focused on intelligent brand management, aggressive expansion and diversification - all within a framework of economic pricing policies and efficiency," he said. Benny Sharvit, the head of Research and global markets at Gaon Investment House, said the report was generally good. "The top line (revenue and gross profit) was better than expected but the bottom line (net profit) was worse than expected," he said, adding that he was maintaining his recommendation and price target at "buy" and NIS 55, respectively. "We still believe that investing in Blue Square shares is better than in Supersol shares," he said. Blue Square's shares closed down 1.1% at NIS 44.44 on the Tel Aviv Stock Exchange. Separately, Blue Square said it appointed David Wiessman as its chairman. Wiessman takes the position from US businessman Matthew Bronfman after Wiessman's company, Alon Israel Oil, paid $30m. in September for 23.4% of the shares in Bronfman Alon.