ELBIT IMAGING LTD. Financial Results for 3 rd Quarter 2009

Transcription

1 ELBIT IMAGING LTD. Financial Results for 3 rd Quarter 2009 November 26,

2 Disclaimer The information provided in this presentation is for general and informational purposes only, and by no means constitutes a binding representation by Elbit Imaging Ltd. (hereinafter: the Company ) and/or a recommendation and/or an opinion regarding the Company s finances and businesses. The Company shall solely be bound by representations and information contained in duly signed documents and/or reports made by the Company to the Israel Securities Authority. Should any incongruity and/or inconsistency arise between the information provided as part of this presentation, whether in writing or orally, and information existing or as might be published in the Company s formal documents and/or reported to the Israel Securities Authority, the information found in the Company s offices and/or reported as stated shall be deemed correct. Despite the Company s every intention to provide correct and accurate information, the information might be incomplete or contain technical or other errors. The Company assumes no liability for inaccuracies or errors made with regard to the information. Furthermore, the information contains forward-looking evaluations and forecasts. It is herby clarified that the Company is unable to anticipate all future scenarios, and such information is consequently speculative, non-binding and in no way guaranteed to materialize. The content of this presentation is the Company s exclusive property and cannot be used commercially or otherwise in violation of copyright laws and international conventions, nor can the information or any part thereof be changed or distorted in any way. The content of this document cannot be copied, duplicated or divulged, in part or in full, or used in any way, unless subject to the Company s prior written consent. The Company is not, and shall not be, liable for any damage-direct, indirect, consequential or incidentalarising out of reliance on and use of the information provided herein. 2

3 KEY FINANCIAL DATA AND PRESENTATION BY CFO OF SIGNIFICANT FINANCIAL RESULTS FOR Q

4 FINANCIAL RESULTS Three months ended September 30, 2009 compared to corresponding period in 2008 The Company share in Loss of Q was million (US$ 38.4 million) as compared to NIS 85.5 million in the corresponded quarter of This Loss in Q is mainly attributable to the following items: Impairment of our real-estate properties in the amount of NIS 31 million. Financial expenses in the amount of NIS 38 million as result of increase in the Israeli Consumer Index in Israel by 2.4%. In accordance with our policy, we continue to hold and operate our commercial centers until such time that favorable market conditions for their realization thereof, will ripe. Therefore in periods when the Company does not realize any commercial centers, as in the current quarter, the Company revenues from such operation decrease significantly. Significant highlights in Q as compared to Q3 2008: Consolidated revenues for three months period ended September 30, 2009 were NIS million (US$ 41.2 million) compared to NIS million reported in the corresponded period of Revenues from commercial centers in Q increased to NIS 18.4 million (US$ 4.9 million) from NIS 16.0 million in the corresponded period of Those revenues are only related to the operation of commercial centers without any revenues recorded as result of sale of trading property in those quarters. In accordance with our policy, we continue to hold and operate our commercial centers until such time that favorable market conditions for their realization thereof, will ripe. Cost of commercial centers in Q increased to NIS 42.7 million (US$ 11.4 million) compared to NIS 41.7 million in Q Revenues from hotels operations and management in Q increased to NIS 96 million (US$ 25.5 million) as compared to NIS 94.2 million reported in Q This increase is attributable to: (i) an increase in revenues of the Radisson SAS Bucharesti hotel in Romania which was opened at the end of Q2 2008; offset by (ii) a decrease in revenues from our existing hotels mainly due to the global economic slow down; and (iii) the devaluation of the Pound (the functional currencies in which our hotels in the UK operates) against the NIS. 4

5 FINANCIAL RESULTS (CONT.) Costs and expenses from hotels operations and management in Q decreased to NIS 83.5 million (US$ 22.3 million) compared to NIS 98 in Q This decrease is attributable mainly to: (i) reduction in direct expenses in our hotels; and (ii) pre-opening expenses in Q attributable to the Radisson SAS Bucharesti hotel, as well as the devaluation of the Pound against the NIS. Revenues from sale of medical systems in Q increased to NIS 9.5 million (US$ 2.5 million) compared to NIS 4.2 million reported in the corresponded period in Costs and expenses of medical systems operations in Q increased to NIS 15.4 million (US$ 4.1 million) compared to NIS 12.7 million reported in the corresponded period in Revenues from sale of fashion merchandise increased to NIS 30.8 million (US $ 8.2 million) in Q compared to NIS 24.6 million in the corresponded period in This increase is attributed mainly to the expansion of the our operations in the retail segment, which is mainly reflected by the commencement of operations of GAP franchise in Israel, offset by a decrease in sales of existing stores as result of the global economic slow down. Cost and expenses of fashion merchandise increased to NIS 36 million (US$ 9.6 million) in Q compared to NIS 30.9 million reported in the corresponded period last year. Research and development expenses in Q increased to NIS 18.4 million (US$ 4.9 million) compared to NIS 18.3 million reported in the corresponded period last year. These costs are attributable to the operations of InSightec. General and administrative expenses in Q increased to NIS 14.5 million (US$ 3.8 million) compared to NIS 13.7 million in Q

6 FINANCIAL RESULTS (CONT.) Financial expenses net in Q increased to NIS 52 million (US$ 13.8 million) compared to financial income, net of NIS 6.9 million reported in the corresponded period last year. Such increase attributable mainly to decrease in gain in Q attributable to change in fair value of financial instruments (mainly Plaza Centers, debentures, swap transactions, other derivatives and marketable securities, all measured at fair value through profit and loss) of NIS 16.7 million (US$ 4.4 million) as compared to gain of NIS 82.1 in Q Other expenses, net increased to NIS 40.2 million (US$ 10.7 million), compared to NIS 3.7 million reported in corresponded period last year. The other expenses in Q include mainly impairment of real-estate properties in the amount of NIS 31.4 million ($8.3 million). Loss in Q was NIS 155 million (US $41.2 million) of which NIS million (US$ 38.4 million) is attributable to the equity holders of the Company and NIS 10.8 million (US$ 2.9 million) is attributable to the minority interest. Loss in Q was NIS 72.3 million of which NIS 85.5 million is attributable to the equity holders of the Company and gain of NIS 13.2 million is attributable to minority interest.. Mr. Dudi Machluf the Company s CFO 6

7 FINANCIAL STRENGTH & LIQUIDITY Positive working capital of NIS 4,904. Cash balances of NIS 2,247. Owners equity of NIS 2,169m (The Company does not revaluate it s assets). Consolidated debt of NIS 6,362m. Cash at Company s head office of NIS 1,105m. Gross debt at Company s head office of NIS 2,914m. Net debt at Company s head office of NIS 1,809m. 7

8 FINANCIAL STRENGTH (CONT.) Composition of Cash and Debt Nis Millions As of SEP Cash and cash equivalants Short-term deposits and long term financial items Total Head office ,105 Plaza centers ,014 Hotels InSightec Mango Sub Total 1, ,247 Financial Instruments+Derivatives Total 1,475 1,070 2,545 Short-term credit (*) Long-term credit Total Head office 286 2,628 2,914 Plaza centers 696 1,475 2,171 Hotels 87 1,095 1,183 InSightec Mango Sub Total 1,101 5,199 6,300 Financial Instruments+Derivatives Total 1,162 5,199 6,362 Net debt Head office (1,809) Plaza centers (1,157) Hotels (1,099) InSightec 27 Mango (16) Financial Instruments+Derivatives 237 Total (3,816) (*) Major part of the short term credit is classified as such, for accounting and other reasons, and the Company's management is of the opinion that repayment of same will not be due within the next 12 months. 8

9 PLAZA CENTERS Strong cash position maintained, providing ongoing support for current development activity and enabling the Company to take advantage of opportunities arising in the current market to acquire high yielding mature assets or invest in new markets. Development activities limited to six projects located in areas with the highest market demand and with favourable financing opportunities, namely Casa Radio and Miercurea Ciuc in Romania, Dream Island in Hungary, Suwalki and Zgorzelec in Poland and Koregaon Park in India. The remainder of Plaza s development pipeline projects are either in the design phase or waiting permitting. commencement of these projects will depend, amongst other things, on the availability of external financing. Although Plaza s strategy in the last years is to sale its projects, Plaza is in a position where it does not have to execute forced sales of projects. If yields continue to be high on completion of the projects, it will take advantage of its experience gained over eight years in managing and running shopping malls effectively and hold the investment in its portfolio. During the first quarter Plaza opened two shopping and entertainment centres namely :Riga plaza in Latvia and Liberec Plaza in the Czech Republic. Development finance totalling USD 45 million was secured during the period to fund 50% of the total project costs of the Koreagon Park project in Pune, India Plaza and its joint venture partner MKB Bank acquired a 27% interest in Dream Island from a company controlled by Sir Bernard Schreier. Plaza and MKB, as a 50:50 joint venture, now hold an 87% interest in the project. 9

10 PLAZA CENTERS (CONT.) Asset realization throughout the period Q NIS Millions NIS Millions NIS Millions Sale of trading property Cost of trading property sold (233) 0 0 Gain from sale of centers The gain in stems from price adjustments on the Hippodrome and from the sale of Plzen Plaza in Q During there were no Centres Sold Q NIS Millions NIS Millions NIS Millions Plaza :opening balance of trading property 1,738 3,047 3,774 Investment for the period in Commercial centers Projects 1, Investment for the period in Real Estate projects in India Firstly consolidation of the Obuda Island project Disposals (233) 0 0 Capital reserves + capitalizations+impairment,net (162) 113 (35) Total trading property in Plaza Centers books 3,047 3,861 3,861 In Elbit's financial statements Elbit's share in Real Estate projects in India including Capital reserves and capitalization Total trading property in Elbit's books 3,279 4,146 4,146 10

11 PLAZA CENTERS (CONT.) Consolidation of the Company s financial strengths and liquidity Positive working capital of 723 million. Cash and cash equivalents balances of 139 million ( 184 million - including short term and long term balances) Shareholders equity of 574 million. Consolidated borrowings of 394 million. The Company s shareholder s equity of 574 million represents 1.97 per share. The Company does not revaluate it s assets. Net asset Value for December 31,2008 of 2.40 per share according to external evaluator. 11

12 HOTEL DIVISION The increase in revenues is attributable to: (i) an increase in revenues of the Radisson SAS Bucharesti hotel in Romania which was opened at the end of Q2 2008; offset by (ii) a decrease in revenues from our existing hotels mainly due to the global economic slow down; and (iii) the devaluation of the Pound (the functional currencies in which our hotels in the UK operates) against the NIS.. Currency Average rate Q Average rate Q Change NIS/EURO % NIS/GBP % NIS/LEI % 12

13 HOTEL DIVISION (CONT.) Together with its partners, the Company has 2,332 rooms in operating hotels including 424 rooms in the new Radisson SAS Bucharest Hotel which was opened in June The cost of the hotels in our financial statements, as of is NIS 1,542 million. Romania, 716 Number of rooms by country Netherlands, 425 Belgium, 313 England,

14 INDIA DIVISION- Real Estate As of September 30,2009 the Company invested a total of NIS 739 million in It s real estate projects in India. The real estate projects are related to the Joint venture signed between Plaza Centers and Elbit, to develop three major mixed use projects in India located in the cities of Bangalore, Chennai and Kochi. The following table refers to these three projects. India: Investment opening balance, at Investments for Q Investments for Q Investments for Q Capital Reserves/Others Balance at (Including Plaza centers share) (*) NIS Millions Item in the FS: Amount - part of the "Trading property" Item (**) Amount - part of the "Prepayments and other assets" Item (**) Amount - part of the "Investment property" Item (*) Not including three other projects in India for the construction of comercial centers.these fall within the commercial Centers Division acting through Plaza centers and are part of the trading property Item. (**) 50 % of the amount derives from Plaza centers FS

15 Overview: InSightec So far, Elbit Imaging has invested a total of approximately $85 million in InSightec. As of September 30, 2009, our cost of investment has been depreciated in full, down to 0 value. InSightec s cumulative investment in R&D amounted to date to above $135 million, fully depreciated to the profit and loss account. 1 Status of regulatory approvals and clinical studies Uterine Fibroids (myoma) The Company was granted CE and FDA approval to use the technology commercially. Ontological Applications The Company received CE approval to treat cancerous bone metastases. The Company is conducting pre-clinical and clinical studies for a number of applications, as follows, and taking steps to obtain regulatory approvals for them: Bone metastases,prostate cancer,breast cancer,liver cancer. The Company is conducting initial feasibility studies into a number of neurological applications, such as: brain tumors, use of image-guided drugs, treatment for diseases of the central nervous system. Market Size The Company estimates the effective market size to be above $1billion in each of the clinical applications mentioned above. During Q2 The company reported that a team at the University Children s Hospital Zurich has completed a feasibility study testing the use of non-invasive transcranial MR-guided focused ultrasound surgery (TcMRgFUS) for the treatment of neuropathic pain. This is the first study in the world to test non-invasive transcranial focused ultrasound as a treatment modality for functional brain disorders. The results of this study set the ground for extensive brain study addressing the areas of functional diseases like Parkinson and Epilepsy, brain tumors and stroke. 15

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