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AmpalAmerican Israel Corp. Reports Operating Results (10-Q)

August 05, 2009 | About:
10qk

AmpalAmerican Israel Corp. (AMPL) filed Quarterly Report for the period ended 2009-06-30.

Ampal-American Israel Corporation acquires interests in businesses located in the State of Israel or that are Israel-related. They seek to invest in companies which have long-term growth potential and are involved in a broad cross-section of Israeli companies engaged in various fields including high technology and communications hotels and leisure-time real estate finance energy distribution and industry. Generally they participate in the management of their investee companies through representation on boards of directors and otherwise. AmpalAmerican Israel Corp. has a market cap of $142.6 million; its shares were traded at around $2.54 with a P/E ratio of 6.7 and P/S ratio of 0.3.

Highlight of Business Operations:

In the six months ended June 30, 2009, the Company recorded a $12.0 million translation gain, as compared to a $25.4 million translation loss for the corresponding period in 2008. The increase in translation gain is related to a change in the valuation of the New Israeli Shekel as compared to the U.S. Dollar, an increase of 3.1% in the six months ended June 30, 2009, as compared to a decrease of 12.7% for the corresponding period in 2008.

In the six months ended June 30, 2009, the Company recorded $205.7 million in revenue which was comprised of $186.3 million in the Chemicals segment, $18.4 million in the Finance segment, $1.3 million in the Leisure-time segment and a net loss of $0.3 million in Equity in losses of affiliates, as compared to $282.6 million for the same period in 2008, which was comprised of $277.5 million in the Chemicals segment, $3.1 million in the Finance segment, $1.5 million in the Leisure-time segment and a $0.6 million gain in Equity in earnings of affiliates. The decrease in Chemicals revenues is primarily attributable to the slowdown in the markets, especially in Europe, which lead the decrease in sold quantities and product prices, and also due to the significant decrease in the demand for chemical carrier shipping. This was partially offset by the change in the valuation of the New Israeli Shekel as compared to the Euro. The recession and the resulting significant decrease in the demand for chemical carrier ships were felt during the first half of 2009. The decrease in demand for chemical shipping lead to a steep decline in freight rates. In addition, the decline in shipped quantities generates an uneven shipment of chemicals, which in certain voyages, results in almost no cargo being shipped on the return leg of a voyage.

In the three months ended June 30, 2009, the Company recorded $95.1 million in revenue which was comprised of $91.6 million in the Chemicals segment, $3.1 million in the Finance segment, $0.6 million in the Leisure-time segment and a net loss of $0.2 million in Equity in losses of affiliates, as compared to $153.9 million for the same period in 2008, which was comprised of $151.4 million in the Chemicals segment, $1.7 million in the Finance segment, $0.8 million in the Leisure-time segment and a minor net loss in Equity in losses of affiliates. The decrease in Chemicals revenues is primarily attributable to the slowdown in the markets, especially in Europe, which lead the decrease in sold quantities and product prices and due to significant decrease in the demand for chemical carrier shipping. The recession and the resulting significant decrease in the demand for chemical carrier ships were felt during the second quarter of 2009. The decrease in demand for chemical shipping lead to a steep decline in freight rates. In addition, the decline in shipped quantities generates an uneven shipment of chemicals, which in certain voyages, results in almost no cargo being shipped on the return leg of a voyage. The increase in the Finance segment revenue is primarily related to the increase in interest income from deposits and loans receivable.

In the six month periods ended June 31, 2009 the Company reported tax benefit of $0.3 million as compared to approximately $1.0 million of tax benefit in the corresponding periods in 2008. The Companys loss for the period includes $13.5 million from translation gains (these gains represent temporary differences for tax purposes). We created a deferred tax asset and full valuation allowance for such gains. The tax benefit which was recorded pertains to Gadots income.

As of June 30, 2009, the Company had $31.3 million of marketable securities as compared to $52.9 million as of December 31, 2008. The decrease is attributable to the sale of marketable securities.

Net cash used in financing activities was approximately $11.7 million for the six months ended June 30, 2009, compared to approximately $187.5 million of net cash provided by financing activities for the corresponding period in 2008. The change in cash used in financing activities is primarily attributable to the loans repaid, the repurchase of Companys Series B debentures, and the issuance in 2008 of the Companys Series B debentures in the amount of $ 166.9 million.

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Rating: 3.3/5 (3 votes)

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