"We identified glitches inside the house": at Ackerstein they found the person responsible for the weak results

Last Thursday, during an investor call held by the Ackerstein Group following the publication of disappointing reports and an announcement regarding the end of CEO Amit Lang's tenure, Zvika Ackerstein, one of the company's controlling shareholders who stepped into the shoes of the outgoing CEO, was asked why such a change would improve results. Ackerstein replied: "We are identifying glitches inside the house and cannot ignore it. Now we will go back to basics — focus, focus, focus. That is where we are."

Disappointed investors sent Ackerstein's stock into a two-day decline of 13%, which wiped 309 million shekels off its value. Ackerstein, a manufacturer of industrial concrete products for the infrastructure sector, which is under the control of the family that bears its name (68%), presented revenues of 190 million shekels in the second quarter, a decrease of 15% compared to the same quarter last year (a decrease of 12% was recorded for the half-year). Net profit plummeted by 86% in the quarter to about 2.3 million shekels, and for the half-year it amounted to about 19.8 million shekels, a fall of 48%.

According to Zvika Ackerstein, "it is not pleasant for anyone to see such results. We are reacting quickly and not resting on our laurels." Concurrently with the publication of the reports, Ackerstein announced the end of CEO Lang's tenure, after he was appointed to the position less than a year ago. Lang replaced Ehud Danuch, who retired in June last year. Zvika, son of Chairman of the Board Giora Ackerstein, will take Lang's place. CFO Eyal Weinberg was appointed Deputy CEO, and the company notes that they will work to find a chairman who is not among the controlling shareholders.

"The performance in the last quarters was below our expectations," Ackerstein said during the call. "Out of our deep commitment to the company, the employees, and certainly the investing public, we decided to make the necessary changes and not wait. Amit brought a lot of experience in the field of infrastructure, but the challenges of the time led us to the conclusion that an industrial company needs first and foremost focused management, one that comes from the production floor." Ackerstein clarified that his entry into the position is not temporary. To a question regarding the purchase of shares by the controlling shareholders, he replied: "We are aware of the opportunity that exists right now from our perspective and are preparing accordingly."

The appointment of Zvika Ackerstein is driven by the desire of the shareholders to see the company enter the infrastructure sector with a storm. "This sector is going at a national level to an increase in the volume of work," says a market source. "Whether it is the local authority elections, national infrastructure projects that have been delayed in recent years, or security fortification projects. The moment the controlling shareholders saw that operational challenges had arisen, they were required to make a difficult decision." Ackerstein's market value currently stands at 2.1 billion shekels, and despite the recent declines, it has doubled its value over the last three years. Among the stakeholders in the company, alongside the family, are the institutional investors Migdal, Clal Insurance, and Harel.