After its tough year, Clal Industries and Investments (TASE: CII ) managed to report a return to profitability today, if in much smaller proportions than the company was once accustomed ¿ NIS 2 million.

CEO Meir Shannie commented on the Q1 results, emphasizing the deterioration in cement-maker Nesher's profitability. Shannie told TheMarker that "the most prominent point in the financials is that fact that Nesher is just above break even. This is problematic from our perspective because Nesher constitutes about 50% of Clal's portfolio. When that happens, when 50% of the portfolio doesn't provide yield, it is hard to make money for investors."

Shannie said, "Clal Industries will have a very difficult time achieving he kind of profitability that meets shareholder expectations, as long as Nesher doesn't return to profitability. We hope an agreement with the antitrust commissioner will help that, and in parallel, we hope the Ministry of the Industry and Trade will fulfill its duty to uphold the law [and limit imports]."

On the rest of Clal's portfolio, Shannie said, "The positive thing is that several companies changed direction. ECI Telecom (Nasdaq: ECIL) stands out with projected profitability in the second half of 2002. Scitex Corporation (Nasdaq: SCIX) also posted an encouraging improvement in results."