Q2 2026 Azrieli Group Ltd Earnings Call Transcript
Key Points
- NOI increased by 4% in constant currencies, with strong growth in the Retail segment (9%) and tenant sales (8%).
- Data centers continue to expand, with new agreements in London (13.6 MW) and Norway (5 MW) contributing to a contracted NOI of over ILS1 billion.
- The Spiral Tower is on track, with construction progressing well and strong interest from international and local companies.
- Senior Housing segment showed continued NOI growth, with high occupancy and the new Palace Rishon LeZion home already contributing to FFO.
- The company maintains strict financial discipline, with a successful bond issuance and a conservative debt profile (average interest rate of 3%, duration of 6.5 years).
- Net income decreased significantly to ILS155 million from ILS320 million in the prior year, due to fair value losses and higher financial expenses.
- Comprehensive income was a loss of ILS548 million, impacted by translation losses from the strengthening of the shekel against the Norwegian krone and EUR.
- Data center NOI was negatively affected by foreign exchange rate changes, with a ILS16 million impact in the quarter.
- FFO remained flat, with an increase in G&A expenses related to data center expansion, and the Offices segment saw a decline due to the one-time Meta termination payment.
- The company faces execution risks in its data center construction projects, with delivery timelines extending into 2029 for some phases.
Good day, and thank you for standing by. Welcome to Azrieli Group Q2 2026 conference call for global investors. (Operator Instructions)
With us today are Ms. Danna Azrieli, CEO; and Mr. Ariel Goldstein, CFO. (Operator Instructions) This conference call will be accompanied by a slide presentation. It can be found on Azrieli's site, www.azrieligroup.com, on the Investor Relations page and the Media Room. Presentations and the financial reports can be found on the website as well.
I would like to remind everyone that forward-looking statements with respect to the company's business, financial condition, and results of its operations are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated. Please note that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Danna Azrieli, CEO. Please go ahead.
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