Azrieli Group: First Quarter of 2015 Results

TEL AVIV, Israel, May 20, 2015 /PRNewswire/ -- 

Q1/2015 Highlights

Yuval Bronstein, CEO of Azrieli Group (TASE: AZRG.TA): "The Group continues to present good performance also this quarter, which reflects continued impressive growth in the NOI, in the FFO and in the other operating parameters. The Group's growth strategy is expressed both in these results and in the significant progress in the development projects: continued marketing and lease-up of the Azrieli Holon Center, the signing of first lease contracts for offices in the Azrieli Sarona Center, which will be completed in 2017, and in the Azrieli Rishonim Center, which will be completed in late 2016. At the end of this quarter, we opened the Azrieli Ramla mall and the second floor of the Ayalon mall, in which contracts are signed for almost the entire space. The Group is continuing its development momentum in Israel, with progress in the construction of the significant projects in Sarona, Rishonim and in senior housing, and is increasing its land portfolio for future development with the purchase of additional land for the project in Holon."

Summary Financials for Q1/2015:

Core Business Operations:

Retail centers and malls in Israel segment

This quarter saw a moderate rise in the NOI, mainly thanks to the opening of the Azrieli Ramla mall and the second floor of the Ayalon mall, which was partially offset by a decline in the NOI of Beer Sheva Mall.

Office and other space in Israel segment – consistent growth trend continues

The increase in the NOI and in the same property NOI mainly derives from an increase in rent and continued lease-up and a rise in occupancy in the Azrieli Holon center.

Income-producing property in the U.S.A. segment

The increase in the NOI mainly derives from the purchase of the asset in Houston, and the increase in the same property NOI mainly derives from the weakening of the NIS against the dollar (down by around 13% in this period). Net of exchange rate changes, the overseas segment NOI rose by approx. 25%.

Acquisitions, Development and Redevelopment of Property

Financing

In Q1/2015, the Group issued linked marketable bonds on the Tel Aviv Stock Exchange, in an amount of approx. NIS 623 million, for a period of 10 years, with a duration of around 5.5 years. The bonds were rated AA+ by S&P Maalot for an issuance of up to NIS 700 million. The interest rate set in the tender was 0.65%, and the series is not secured by a pledge.

Balance Sheet (on an extended standalone basis) as of March 31, 2015

Non-Core Business Operations

Granite Hacarmel (100% held) – In Q1/2015, Granite recorded a net profit of approx. NIS 21 million, compared with approx. NIS 34 million in the same quarter last year. Discounting Tambour's results (discontinued operations), last year the net profit would have amounted to approx. NIS 22 million.

The decrease is mainly attributed to the sale of Tambour which closed in Q2/2014 in consideration for approx. NIS 500 million.

Financial Holdings

Bank Leumi (4.8% holding) – In Q1/2015, the share price on TASE rose by approx. 10%, a rise of approx. NIS 72 million in the value of the holding in the bank, after tax.

The value of the Group's holding in the bank, as of March 31, 2015, is approx. NIS 1,043 million.

Leumi Card (20% holding) – In Q1/2015, a net profit of approx. NIS 45 million was recorded, compared with a net profit of NIS 52 million recorded in the same quarter in 2014.

The value of the holding on the books as of March 31, 2015, was approx. NIS 593 million,  according to an external assessor.

For further information:
Moran Goder
Head of Investor Relations, Azrieli Group 
Office: 972-3-6081310
Mobile: 972-54-5608151 
[email protected]

About Azrieli Group

Azrieli Group Ltd. owns and operates one of Israel's largest portfolios of malls, shopping centers and office properties nationwide. The Company is publicly traded on the TASE under the symbol AZRG IT, and is included in the TA-25, TA-100 and TA Real Estate 15 indices. It is the only Israeli stock included in the EPRA Index, which is the European index of the world's largest income-producing property companies. As of March 31, 2015, the Company has an equity market capitalization of about NIS 19.9 billion. The Company operates mainly in Israel, and owns and manages properties with a gross leasable area of approx. 840,000 square meters; the Company holds 15 malls and shopping centers comprising 301,000 square meters of leasable space across Israel, 11 office properties comprising 352,000 square meters of leasable space across Israel and 6 properties overseas (mainly in Houston, Texas) comprising 187,000 square meters of leasable space. In addition, the Company has 8 projects under development comprising around 507,500 square meters of leasable space in Israel. Approx. 90% of the fair value of the investment property and the property under development relates to domestic properties (in Israel). The Group has been specializing in shopping center and office space development, acquisition, and management for the past 30 years. For further information, please visit the Company's website at www.azrieli.com.

Disclaimer

[1] For details and the manner of calculation of the FFO, see Section 1.1.6 of the financial statements for March 31, 2015.