Developer Africa Israel posts steep loss in Q3

TEL AVIV, Nov 30 (Reuters) - Israeli real estate developer Africa Israel Investments (AFIL01.TA) reported on Sunday a net loss of 2.1 billion shekels ($536 million), at the top end of a profit warning it issued 10 days ago.

Africa Israel posted a net profit of 281 million shekels in the same quarter a year ago.

The company attributed the loss to a 1.9 billion shekel decline in the fair value of a number of properties as well as higher financing costs due to a pick-up in inflation.

A large part of its debt payments are linked to the consumer price index.

The company earlier this month warned it expected to post a net loss of between 1.7 billion shekels and 2.1 billion shekels.

Quarterly revenue rose to 1.8 billion shekels from 1.7 billion a year earlier.

"Due to the significant worsening in the global financial crisis recently and an increased impact on the world economy the company carried out an evaluation of the effect of the crisis on the value of its real estate properties ... in Israel and abroad," the company said in a statement.

Among its properties suffering from a decline in value are projects and real estate in Miami, Las Vegas, Manhattan, Moscow, Poland and Latvia.

Africa Israel said it would focus on completing projects that have already been started rather than beginning new ones.

The company will continue to increase its liquidity by reducing short-term debt and selling off properties in Israel and abroad, it said.

Africa Israel, which is controlled by billionaire diamond dealer Lev Leviev, also has interests in energy, hotels, infrastructure, and fashion. It owns 71 percent of AFI Development (AFIDLq.L), a Russia-focused real estate company.

($1 = 3.92 shekels)

(Reporting by Tova Cohen; Editing by Richard Hubbard)