The underwriting company Working IBI Ended the fourth quarter of 2021 with a decline in revenue and profits. However, in an annual summary, the company showed a sharp growth in its activity, thanks to the revival of the IPO market in Israel, which actually began in the fourth quarter of 2020.
Poalim IBI, which is controlled by the IBI Investment House and Bank Hapoalim, is one of the five companiesUnderwriting And the largest issues in Israel. Poalim IBI ended the fourth quarter of 2021 with operating revenues of NIS 25.4 million, which reflected a decrease of 26% compared to the corresponding quarter in 2020.
According to the company, the decrease in revenue in the fourth quarter of 2021 is due to the company’s unusual volume of activity in the fourth quarter of 2020, which was responsible for about half of the revenue that year and included a large number of underwriting capital (shares). In addition, in the fourth quarter, the company suffered investment losses of NIS 556,000, compared with investment gains of NIS 6.7 million recorded in the corresponding quarter, which resulted from the listing of Melran shares and Extension Diary in which the company invested prior to the IPO.
Quarterly decrease of 30% in net profit
The decrease in investment income and losses led Poalim IBI to present a 30% decrease in net profit in the fourth quarter to NIS 10.6 million. However, in an annual summary, the company’s net profit in 2021 as a whole grew by 38% to NIS 42.8 million.
This growth was due to a 54% increase in revenues from the company’s operations, to a volume of NIS 110.3 million in 2021. This increase was mainly due to a substantial increase in capital issues, and in contents that are guaranteed underwriting, the profitability of which is higher.
On the other hand, in 2021 the company recorded losses of NIS 5.3 million from securities investments acquired in connection with underwriting activities and long-term investments, compared with profits of NIS 10.8 million recorded in 2020 from securities investments purchased in connection with underwriting activities or held for a long time. According to the company, in 2021 its securities portfolio suffered from losses resulting mainly from the technology shares issued in the previous year.
In 2021, Poalim IBI was involved in the management of 111 capital raising transactions, in which a total of NIS 35.5 billion was raised for its clients. For comparison, in 2020 the company was involved in the management of 114 capital raisings, in which a total amount of NIS 31.7 billion was raised.
An increase of NIS 5.7 million in salary expenses and grants
The significant increase in revenues and profits in 2021 also led to an increase of NIS 5.7 million in salary expenses and employee benefits, which are derived from the company’s profitability. This increase was reflected in administrative and general expenses, which amounted to NIS 43.6 million in 2021, compared with NIS 35.5 million in 2020.
The three highest paid recipients in the company – CEO Yaron Mozes, CEO of the subsidiary Ofer Greenbaum and Deputy CEO of the subsidiary Shai Nevo – will pocket NIS 6.2 million in benefits totaling NIS 6.2 million each during 2021. All three together Won rewards of NIS 18.6 million.
Last year, three senior IBI workers received a combined reward of NIS 15 million, in 2019 they distributed NIS 11 million and in 2018 NIS 9 million – a total of more than NIS 50 million in four years.
Greenbaum and Nevo joined IBI in 2017 from rival company Leumi Partners, which is owned by Bank Leumi, following a crisis in the company after its senior executives, led by Erez Goldschmidt, left in favor of a new underwriting company (Orion).
Poalim IBI is traded on the stock exchange at a value of about NIS 280 million. Simultaneously with the publication of the reports, the company announced a dividend payment of NIS 10.7 million for the profits of the fourth quarter of 2021.
The company also issued an invitation to convene a general meeting of its shareholders, at which a resolution will be put to the vote to grant Greenbaum, Nevo and Mozes packages of blocked shares and options. Under the proposal, Greenbaum would be granted 1 million blocked shares (4% of the company) and another 1 million options (4% of the company).
Nevo will be granted 500,000 restricted shares (2% of the company) and another 500,000 options (2% of the company), while Moses will be granted 250,000 restricted shares (1% of the company) and another 250,000 options (1% of the company).