Tidhar: Unusual IPO expenses eroded profit, and by how much did the prices of sold apartments drop
The real estate developer, which completed its IPO in Tel Aviv less than three months ago, showed an increase in the volume of apartments sold, which translated into a 4% growth in revenue, but unusual IPO expenses led to a sharp drop in profit. A decrease of almost one million shekels in the average apartment price.
Despite the weakness in the local real estate market, the real estate developer Tidhar enjoyed an increase in its activity volumes in its first quarter as a public company. However, unusual IPO expenses of 75 million shekels led to a significant erosion in the bottom line.
Tidhar's revenue, managed by Uri Levin, stood at approximately 754 million shekels in the second quarter, an increase of about 4% compared to the corresponding quarter last year. In the first half of the year, the company presented revenue of approximately 1.5 billion shekels, a growth of 4.5% compared to the corresponding period last year. This was thanks to the recognition of revenue from projects under construction and the sale of new apartments.
Against this backdrop, during the first half of the year, Tidhar sold 294 housing units for a total of approximately 433 million shekels, compared to 159 housing units for a total financial volume of approximately 239 million shekels in the corresponding period last year. However, the average price of a housing unit decreased during the first half of the year by approximately 900 thousand shekels, and stood at approximately 3.1 million shekels.
Sharp drop in profits
In the bottom line, the real estate developer presented a net profit of approximately 5 million shekels, a plunge of over 90% compared to the profit of 68 million shekels in the corresponding quarter last year. At the end of the half-year, the net profit stood at approximately 70.3 million shekels, a decrease of about 20% compared to the corresponding period last year. Behind the plunge are unusual IPO expenses of approximately 75 million shekels, which stemmed from granting bonuses to employees in the amount of 56 million shekels, and grants of 8 million shekels to the controlling shareholders.
Excluding the one-time expenses, the company recorded an adjusted net profit of approximately 144 million shekels in the second quarter, a growth of about 36% compared to the corresponding quarter last year. At the end of the half-year, the adjusted profit stood at approximately 73 million shekels, a decrease of about 5% compared to the corresponding period last year.
Uri Levin, CEO of the Tidhar Group, stated:
"The excellent results we are presenting today highlight the strength of Tidhar, the robustness of the business model, and the significant growth potential of the group. Tidhar continues to grow, even in a challenging period, thanks to the combination between the different sectors - development, execution, and income-generating assets, control over the entire value chain, and the strength of each of the sectors."
Tidhar is one of the largest real estate companies in the local market, holding arms for construction, development, and management of income-generating assets. Last June, the company completed an initial public offering (IPO) of its shares on the local stock exchange at a valuation of approximately 7.8 billion shekels. Since the IPO, the company's stock, which is controlled by Gil Geva, Mark Weissman, and Aryeh Bachar (59% of the capital), has fallen by approximately 11% and is traded at a valuation of approximately 7 billion shekels.
