Only about a month after completing its first and very successful IPO of shares on the Tel Aviv Stock Exchange, a group reports Acro A move to a loss of NIS 12 million in the fourth quarter of 2021, after presenting a net profit of NIS 65 million in the first three quarters of the year. The reason for the loss can be found in the jump in management and general expenses to NIS 85 million in the fourth quarter, compared with NIS 13 million in the previous quarter.
The company’s reports show that the increase in expenses is mainly due to a share-based payment worth NIS 73.7 million granted to the company’s CEO, Ziv Yaakobi (who is also one of the controlling shareholder in Acro). Tzachi Arbov) On the eve of the IPO, at the end of November 2021.
Yaakobi was allotted about 1.5 million acro shares without consideration, and with the addition of salaries and grants worth NIS 1.85 million, the cost of his rewards in 2021 amounted to NIS 75.6 million – making it probably the highest salary on the Tel Aviv Stock Exchange last year. 2.8 million acro shares (4.89% of the company) with a market value of NIS 176 million, as well as options that can be exercised for 1.7% of the company’s capital.
The company’s value eroded to NIS 3.6 billion
The Acro Group is engaged in initiating projects in the field of real estate, mainly in the field of luxury residential towers in Tel Aviv. About a month ago, the company completed a raising of NIS 500 million by issuing shares at a price of NIS 69.9 per share, which reflected a company value of about NIS 4 billion after the completion of the raising (“after the money”).
Since then, the stock has lost about 10% of its value, and the company’s value has eroded to NIS 3.6 billion. This week, the Acro Group reported that it ended the fourth quarter with revenues of NIS 250 million, which mainly included revenues from the sale of apartments and real estate amounting to NIS 158 million and an increase in the fair value of real estate for investment of NIS 76 million.
However, the high expense recorded for the allotment of shares and options eroded the operating profit in the fourth quarter to only NIS 27 million, compared with NIS 106 million in the previous quarter.
In 2021 as a whole, the company recognized revenues of NIS 701 million, reflecting a growth of 43% compared to the corresponding quarter. Revenues from the sale of apartments and real estate grew by 20.4% to NIS 448 million in 2021, while gross profit from the sale of housing units alone grew by 61% to NIS 90 million.
Net profit to shareholders decreased by 13% to NIS 53 million in 2021, due to the distribution of shares and options, but excluding the accounting expense for the distribution, the company shows a threefold increase in net profit to shareholders, to NIS 182 million.
The apartments that have not yet been recognized will bring in NIS 12 billion
Acro is currently initiating, planning and constructing 45 projects in various stages of implementation, including 7,314 residential housing units. Acro’s share in these projects stands at 5,009 housing units and the balance belongs to its various partners in the projects. Of the total projects, 27 are in the area of urban renewal, and 4,181 housing units are to be built (the company’s share – 3,016 housing units). It is expected to generate revenues of NIS 12 billion and a gross profit of NIS 3.3 billion.
In 2021, Acro sold 227 residential apartments for a total of NIS 978 million, reflecting an average price of NIS 4.3 million per apartment. For comparison, in 2020 the company sold 337 apartments for a sum of NIS 1 billion, reflecting an average price per apartment of NIS 3.1 million.
In addition, the company has four properties used for rent, as well as 13 projects of offices, commerce and hotels, of which six are under construction and another seven in land reserves. According to the company, these will yield an NOI (net income from rental activities) of NIS 200 million per year, compared to an NOI of only NIS 16 million that the company generated in existing projects in 2021.