Israel Corp. Reports Results for Fourth Quarter of 2023

Rhea-AI Summary

Israel (TASE: ILCO) reported its Q4 and annual results for 2023, showing a decrease in profits compared to the previous year. The company's net profit from continuing activities was $28 million in Q4/23, down from $132 million in Q4/22. Net profit to company's shareholders also decreased to $273 million in 2023 from $953 million in 2022. ILCO's liquidity at the headquarters level was $878 million in financial liabilities and $975 million in liquid assets as of December 31, 2023.

Financial Analyst

The financial results of Israel Corporation Ltd. reflect a notable decrease in net profit from continuing activities year-over-year, from $903 million in 2022 to $273 million in 2023. This significant drop might raise concerns among investors regarding the company's profitability and operational efficiency. The reduction in the company's share of ICL profit is a key factor in this decline.

Additionally, the company's liquidity position appears stable with net cash totaling $70 million and investments in liquid assets outstripping financial liabilities. The initiation of a buyback program and the declaration of a dividend are signals that management is confident in the company's financial health and committed to delivering shareholder value. These actions often have the potential to positively influence the stock price by reflecting a bullish outlook from the company's board.

However, it's important to monitor the company's future earnings and cash flow to ensure that these shareholder-friendly activities are sustainable in the long term, especially in light of the decreased profitability.

Market Research Analyst

Israel Corporation Ltd.'s strategic decisions, such as the share buyback program and the dividend distribution, are reflective of its capital allocation strategy and may influence investor sentiment. Share buybacks can be viewed as a method to increase earnings per share by reducing the number of shares outstanding, which can be attractive to investors looking for capital appreciation.

The dividend payout aligns with the company's announced dividend policy and provides a direct return to shareholders. It could attract income-focused investors and support the stock price, especially if the company can maintain or grow its dividend over time. The market's response to these announcements will depend on broader market conditions and investor perception of the company's long-term growth prospects.

Considering the company's assets, including significant holdings in ICL and AKVA Group, the portfolio diversification might provide a cushion against sector-specific risks. However, the reliance on investee results suggests that ILCO's financial performance is closely tied to the performance of these entities, which could be a double-edged sword depending on the investees' market conditions.

TEL AVIV, Israel, March 28, 2024 /PRNewswire/ --  Israel Corporation Ltd. (TASE: ILCO) ("ILCO") announced today its fourth quarter and annual results for the period ending December 31, 2023.

Selected Financial Figures for the Fourth Quarter and 2023:
$m	Q4/23	Q4/22	2023	2022
IC share in ICL profit	29	146	285	958
Amortization of excess cost	(1)	(1)	(3)	(4)
Financing, G&A and other expenses at IC headquarter level	1	(3)	(8)	(67)
Tax income (expense) of IC Headquarters	(1)	(10)	(1)	16
Net Profit from continuing activities	28	132	273	903
Net Profit from discontinued operations1	-	-	-	50
Net Profit to company's shareholders	28	132	273	953

Liquidity at the ILCO Headquarters Level²

As of December 31, 2023, total financial liabilities were $878 million, and investments in liquid assets amounted to $975 million of which $8 million are pledged deposits.

Net cash¹ as of December 31, 2023, totaled $70 million. The net cash* includes the fair value of derivatives transactions, which increases the economic value of the financial liabilities by $27 million. As of September 30, 2023, the net cash* was $61 million.

Additional updates

On November 16, 2023, ILCO announced the initiation of a buyback program of $33m, under safe harbor according to Israeli law, which will be active until March 31, 2024, for more details please see ILCO immediate report. As of December 31, 2023, ILCO purchased shares in the sum of ~$13m. As of March 26, 2024, ILCO purchased shares in total sum of ~$32m.

On March 27, 2024, ILCO Board of Directors decided on distribution of dividend at the sum of $37m, this in accordance with the company's dividend policy announced in January 2023. The record date will be April 9, 2024 and the payment date will be April 17, 2024.

ILCO financial results of ILCO are mainly affected by the results of its investees. For more details see detailed financial report.

ILCO Total Assets, Net
$m	31/12/2023
Assets
ICL (~567m shares, market value3)	2,842
AKVA Group (~6.6m shares, market value2)	38
Other4	12
Total Assets	2,892
Net Cash	70
Total Assets, net	2,962

About Israel Corporation

Israel Corporation Ltd. (TASE: ILCO) ("ILCO") is a reputable public investment company, which owns and invests in high quality companies with established managements and go-to markets.

In November 2019, ILCO announced its updated strategy, ILCO plans to expand its portfolio through new investments over the next few years. ILCO plans to focus mainly on the food (inc. tech), agriculture (inc. tech), healthcare and industry 4.0 sectors. For more details please see the following link to ILCO updated Strategy Presentation

ILCO strives to generate return on its investment through active board participations and its operational and managerial expertise.

ILCO current core holdings include c.44% stake in ICL Group (NYSE:ICL, TASE:ICL) and c.18% stake in AKVA Group (OB:AKVA). ILCO is publicly traded on the Tel Aviv Stock Exchange under the ticker ILCO and is included in the TA-35 Index.

For further information on ILCO, see ILCO's publicly available filings, which can be found on the Tel Aviv Stock Exchange website at http://maya.tase.co.il.

Please also see ILCO company website http://www.israelcorp.com for additional information.

Convenience Translation

The financial information found in this press release is an English summary based on the original Hebrew financial statements and is solely for the convenience of the reader. The binding version is the original in Hebrew.

Forward Looking Statements

This press release may contain forward-looking statements, which may not materialize and are subject to risks and uncertainties that are not under the control of ILCO, which may cause actual results to differ materially from those contained in the disclosures.

Investor Relations Contacts
Idan Hizki
Vice President, Business Development & Investor Relations
Tel: +972 3 684 4500
idanh@israelcorp.com

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[1] For more details on the sale of 16.687% of Bazan shares please refer to IC Q3/2022 financial statements and immediate report dated September 15, 2022
[2] Israel Corp and its wholly owned and controlled headquarter companies.
[3] As of December 31, 2023, for ICL and December 29, 2023, for AKVA Group and Nordic Aqua Partners
[4] Includes 1.513m shares in Nordic Aqua Partners (OB:NOAP)

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SOURCE Israel Corporation Ltd.

What were Israel 's net profits from continuing activities in Q4/23?

Israel 's net profit from continuing activities in Q4/23 was $28 million.

How much were the total financial liabilities at ILCO Headquarters as of December 31, 2023?

As of December 31, 2023, the total financial liabilities at ILCO Headquarters were $878 million.

When did ILCO initiate a buyback program and how much did they purchase by December 31, 2023?

ILCO initiated a buyback program on November 16, 2023, purchasing shares in the sum of ~$13m by December 31, 2023.

What was the sum of the dividend distribution decided by ILCO Board of Directors on March 27, 2024?

ILCO Board of Directors decided on a dividend distribution of $37m on March 27, 2024.

What are the main factors affecting ILCO's financial results?

ILCO's financial results are mainly affected by the results of its investees.