Big back to the pace of the FFO – the capital market

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Big
+ 0.43%

Base:34,530

opening:34,870

High:35,000

low:34,200

change:5,914,594

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Reports revenues of NIS 187.8 million in the last quarter of 2020, compared to NIS 218.7 million in the corresponding quarter last year. The change is mainly due to the fact that in light of the closure guidelines in Israel, the company did not act to collect rent and management fees from its tenants during October (except for vital businesses that continued to operate). In November, the company acted to collect rent and management fees only in open centers. Management in all centers.

The NOI in the quarter amounted to NIS 134.4 million, compared with NIS 153.7 million in the corresponding quarter last year. The decrease in NOI is due to the said relief given by the company to its tenants, mainly in Israel, and is estimated at NIS 27 million. The real FFO in the quarter amounted to NIS 93.2 million, compared with NIS 94.7 million. The extent of the damage to FFO in the fourth quarter following the Corona crisis is estimated at NIS 22 million.

Revenues for the whole of 2020 amounted to NIS 714.6 million, compared with NIS 840.7 million in 2019. The change is mainly due to credits given by the company to its tenants in Israel following the Corona crisis. In addition, revenues were also affected by the sale of three properties in the US. On the other hand, part of the decrease in revenues was offset mainly due to the acquisition of 5 properties made by the company in Serbia.
The NOI in the period amounted to NIS 519.5 million, compared with NIS 613.4 million in the previous year. The real FFO in the period amounted to NIS 322.8 million, compared with NIS 367.2 million in 2019. The extent of the damage to FFO in 2020 following the corona crisis was estimated at NIS 79 million.

The company ended 2020 with a loss of NIS 9.1 million, compared to a profit of NIS 612.7 million in 2019, but the loss is not significant due to the corona year and one-time items (write-offs and impairment of assets). By the way, the profit in the previous year was not significant either, it contains one-time items. In general – a company of the Big type should be tested according to the NOI and the FFO.

The company’s management reports that the occupancy rate of the company’s assets in Israel is approximately 100%, and are also high in Serbia (approximately 99%) and in the United States (approximately 92%). In January 2021, Big increased its holding to approximately 61.48% in Effie Properties following the completion of the offer Acquisition against the allotment of NIS 1.7 billion worth of Big shares; In February 2021, Big rose to a 95% holding in Big CEE in Serbia following the acquisition of the partner’s holdings in the subsidiary.

Against the background of the results, Chai Gallis, CEO of Big, said: “The Company’s financial results during the year were adversely affected due to the closure of the shopping centers for a relatively long period, and as a result to the detriment of the Company’s operating performance and profitability. However, we conclude the year with positive and optimistic operating results for the coming years. From the very beginning of the Corona event, we led a clear line of standing alongside our tenants, while doing everything necessary to provide visitors to our centers with a safe and enjoyable shopping experience. Now that the shopping centers are fully open and the economy is in the advanced stages of exit from the Corona crisis, we are witnessing a very lively movement of visitors to the Big Centers.

“As part of its long-term strategy, in recent months the company’s board of directors has decided on a series of moves, including the realization of all of the company’s operations in the US with the recovery of the US market from the corona crisis. The funds arising from the realization of the activity will be used by the Company for further investment in the other geographical markets in which the Company operates. In addition, we successfully completed the acquisition of control of Effie Properties, a move that will allow us, in collaboration with Effie’s management, to deepen the company’s activities in the field of income-producing real estate in Effie’s areas of activity, where we identify significant potential for value creation.

“In addition, as part of our desire to continue to significantly expand our operations in Serbia, we recently announced the acquisition of a partner holding in the Serbian subsidiary Big CEE and we need a 95% holding in the company.

“At the same time, we continue to promote the projects in Israel, with the Yehud commercial center opening this week, and work on the establishment of Big Glilot continuing in March. In Serbia, during the first quarter of 2021 we completed the construction of an office building in Belgrade. We also continue to improve the company’s existing assets.

“At the financial level, the extraordinary capital issues, along with a number of refinements we have made throughout the year have contributed to the company’s financial strength and liquidity. These moves enable the company to realize its business plans and maximize shareholder value.”