Not just weak reports: Ackerstein Group shares are crashing. Here is the reason
The construction materials and income-producing real estate company reported a drop of over 85% in profit during the quarter, following a decrease in revenues and an increase in transportation and management expenses. Simultaneously with the publication of the reports, Ackerstein announced the departure of CEO Amit Lang, less than a year after he was appointed to the position.
The construction materials and income-producing real estate company, Ackerstein Group, suffered during the second quarter from a decrease in the volume of its clients' activities, alongside a jump in transportation costs, which led to a drop of over 85% in net profit. Simultaneously with the publication of the reports, the company announced the departure of CEO Amit Lang, less than a year after he was appointed to the position.
The company's revenues, which are controlled by the Ackerstein family (68%), stood at approximately 190 million shekels during the second quarter, a decrease of about 15% compared to the same quarter last year. In the half-year summary, Ackerstein presented revenues of about 399 million shekels, a decrease of about 12% compared to the same period last year. This was mainly due to a decrease in projects it carried out for clients, which stemmed partially from the limitation of activity at client sites following Operation "Lion's Roar".
Bottom line, the company presented a drop of about 86% in net profit, which stood at the end of the quarter at about 2.3 million shekels. In the half-year summary, the company recorded a net profit of about 19.8 million shekels, a fall of about 48% compared to the same period last year. Behind the decline are the decrease in revenues and the increase in transportation expenses due to the rise in energy prices, alongside the increase in management expenses.
Alongside the publication of the weak reports, the company announced the departure of the company's CEO, Amit Lang, who is ending his role after less than a year. Lang, who previously served as CEO of Mekorot and CEO of the Ministry of Economy under Naftali Bennett, was appointed to the position at the beginning of the year. This was after, several months earlier, the previous CEO, Ehud Danoch, announced his retirement from heading the group, after a year and a half in the position, and a total of four years in the group.
Expected to take Lang's place is Zvi Ackerstein, one of the controlling shareholders in the company and son of the Chairman of the Board, Giora Ackerstein. As part of the move, Eyal Weinberg, the company's CFO, was appointed to the position of Deputy CEO, parallel to his current role. The company notes that they intend to work on finding a Chairman of the Board who is not among the controlling shareholders.
Following the weak reports and the expected departure of Lang, the company's stock is losing ground. Thus, it completes a decline of about 16% over the last year, which brought it to a value of about 2.1 billion shekels.
