June 1, 2020 / 7:06 AM / 2 months ago

Israeli shopping mall operator Azrieli's profit falls in Q1

TEL AVIV, June 1 (Reuters) - Azrieli Group, one of Israel’s largest shopping mall operators, reported sharply lower quarterly net profit in the wake of the coronavirus outbreak.

Azrieli said on Monday first-quarter net profit fell to 92 million shekels ($26 million) from 369 million a year earlier. The company attributed the decline to value impairments of 184 million shekels due to benefits granted to tenants during the lockdown period.

The company invested 230 million shekels in the quarter in investment properties, in the development and construction of new properties and in the upgrade of existing properties.

CEO Eyal Henkin said the company has seen a very limited impact on the office segment, with high collection rates of 95% of its tenants in April.

“In the second week of May, we launched the process of reopening the malls. We see significant progress with every passing day,” he said.

“As of this time, about 99% of businesses in malls that were permitted to resume operations have been opened, and shoppers’ traffic is strong and has even consistently increased over the past month.”

In the quarter, net operating income rose 3% to 410 million shekels, while funds from operations (FFO) fell to 305 million shekels from 345 million. ($1 = 3.5027 shekels) (Reporting by Tova Cohen Editing by Steven Scheer)

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