Business and Brief: March 29

Slowdown in home sales; 25 Microsoft execs to visit Israel; Israel Chemicals posts $370m. profit

Microsoft Raanana (photo credit: Marc Israel Sellem)
Microsoft Raanana
(photo credit: Marc Israel Sellem)
Slowdown in home sales
The cooling of Israel’s housing market caused a 27 percent drop in homes sales in 2011 by Shikun u’Binui Holdings Ltd., controlled by Shari Arison through Arison Holdings Ltd. However, the performance of the company’s other operations resulted in higher revenue, although profits fell sharply.
The company expects that the government’s efforts to cool the housing market will continue to adversely affects its results in 2012, but CEO Ofer Kotler told Globes that the company’s other operations will offset the weakness in the housing market. He therefore does not expect that the company’s revenue and profit will be harmed in 2012.
Shikun u’Binui, Israel’s largest residential construction company, said in its financial report that the slowing in apartment prices was due to the increase in housing starts, interest rate hikes by the Bank of Israel and its macro-prudential measures, as well as tax measures by the Ministry of Finance.
“The impact of these measures, like the land marketing efforts by the Ministry of Housing and Construction, may have an effect during this year,” it says.
Shikun u’Binui built 830 apartments in 2011, 27% fewer than the 1,142 apartments built in 2010. It believes that the drop in apartment sales is temporary.
“There has been no change in the scale of the company’s activities in the sector, nor any material change in the number of housing units under construction, because of the assessment that there is still a housing shortage and the slowdown in demand is only temporary,” it says. Kotler predicts that home prices and sales will again rise in 2013 because of the decline in housing starts.
25 Microsoft execs to visit Israel
Twenty-five senior executives from Microsoft Corporation will visit Israel in April to participate in two conferences organized by Microsoft Israel Ltd. and its R&D Center. This will be the first visit by Microsoft Research Chief Research Officer Richard Rashid, who will lead the delegation.
Rashid has been responsible for Microsoft Research, which focuses on basic and applied research in computer science and software engineering, since 2000. It is one of the largest research centers of its kind in the world, with 800 researchers in six countries, including Israel. The research is the foundation for new technological concepts and future products with a 10-year horizon.
Other executives will include Microsoft VP Developer Division Suma Somasegar; VP Information Platform and Experience Gurdeep Singh Pall; Group Product Manager Kinect JP Wollersheim; and SQL Business Intelligence Manager Kamal Hathi.
On April 22, at the Think Next Conference at the Tel Aviv Port, 20 Israeli start-ups and 20 new technologies from Microsoft’s R&D Centers in Israel and other countries will be presented. The next day, Microsoft Israel’s Be Next Conference for the business sector will be held at the Tel Aviv Exhibition Grounds.
Microsoft will unveil new enterprise products, including SQL Server 2012, Windows Server 8 and System Server. The company expects 4,000 technology people, including entrepreneurs, developers, investors, IT experts and CIOs to attend the conferences.
Israel Chemicals posts $370m. profit
Israel Chemicals Ltd. has reported double-digit revenue and profit growth for the fourth quarter and full-year of 2011. Fourth quarter revenue rose 20% to $1.71 billion from $1.42b. for the corresponding quarter of 2010, and net profit rose 50% to $370 million ($0.29 per share) from $245m.
The company missed the Globes-Psagot Investment House Ltd. analysts’ consensus of earnings per share of $0.31 on $1.74b. revenue.
Israel Chemicals will distribute a dividend of $260m. for the fourth quarter. Israel Chemicals CEO Akiva Mozes’s salary cost was NIS 16.3m. in 2011. Full-year revenue rose 24% to $7.07b. in 2011 from $5.69b.
in 2010. The record revenue was achieved by growth in all the company’s business segments and sales growth in all markets.
Net profit rose 48% to $1.51b. ($1.19 per share) in 2011 from $1.02b. in 2010. The company beat the Globes-Psagot analysts’ consensus of $1.15 earnings per share on $7.06b. revenue.
Cash flow from operations fell to $1.27b. in 2011 from $1.54b. in 2010, which the company attributed to a $165m. one-time tax payment for 2004-2008. The cash flow and increased financial liabilities were used to acquire companies and operations, and for increased investment in fixed assets and facilities.
Israel Chemicals’ sales distribution showed growth in markets which it has marked as having strong growth potential. Sales in Asia, mainly China and India, rose 30% to $2.09b. in 2011, from 1.68b. in 2010.
Sales in Europe rose 34% to $2.42b. from $1.89b.; sales in North America rose 19% to $1.36b. from $1.05b.; sales in Latin America rose 9% to $666m. from $620m.; and sales in Israel rose 5% to $377m. from $313 m.
Israel Chemicals’ share price rose 0.9% in early trading Wednesday to NIS 43.50, giving a market cap of NIS 55b.