TEL AVIV, Sept 1 Gazit-Globe, Israel's largest real estate investment company, reported higher quarterly profit after the year ago period was hurt by one-time expenses.
Gazit-Globe said on Monday it earned 146 million shekels ($41 million) in the second quarter, up from 60 million a year earlier. The fair value gain from properties for investment and under development rose to 241 million shekels from 222 million a year earlier.
The company's subsidiary U. Dori Construction reported deviations in its estimated costs and expected revenue from projects it performed amounting to 441 million shekels since the fourth quarter of 2012. As a result, Gazit-Globe restated its financial reports for the relevant periods.
Rental income in the quarter fell 5 percent to 1.23 billion shekels, but rose 1 percent excluding exchange rate effects. Funds from operation rose 15 percent to 163 million shekels.
Net operating income, which reflects the group's core business, slipped 4 percent to 832 million shekels but rose 1 percent excluding exchange rate effects.
"We continue to enhance the quality of our portfolio through capital recycling activity, having recently sold properties in our medical office platform while investing in the Nordic region and Brazil," the company's president, Roni Soffer, said. "These steps are aligned with our long-term strategy to focus on our core shopping centre operations."
Gazit-Globe operates in the United States through Equity One and in Canada through First Capital Reality Inc . It is also the largest shareholder in Finland's Citycon and together with Citigroup controls shopping mall developer Atrium European Real Estate.
It will pay a quarterly dividend of 0.45 shekel a share, representing an annual payout of 1.8 shekels. (Reporting by Tova Cohen)