After losing NIS 988 million in 2001, Discount Investment Corporation (TASE: DISI ) is back on track in Q1 with NIS 287 million profits. The IDB-controlled company lost NIS 95 million in the parallel quarter.
Sales amounted to NIS 2.1 billion, stable in comparison with the parallel reporting period.
The company cut operating costs by NIS 50 million, in part due to a NIS 51 million drop in financing costs by decreasing liablities by NIS 850 million. General and administrative expenses were cut be the company's downsized headquarters.
The improvements led the company to NIS 526 pre-tax profits, after a NIS 7 million pre-tax loss in Q1 2001.
The company benefited from a sharp drop in its share of subsidiary losses to NIS 10 million, compared to NIS 107 million in Q1 2001 and NIS 668 million for all of 2001. Discount Investments is also riding NIS 419 million in one time gains, primarily from a hedge transaction against its UPC shares. In contrast, the company posted NIS 28 million one time gains in the first quarter of last year and one-time write offs of NIS 232 million for the entire year.
The profits stemmed from put options the company purchased when UPC entered Tevel. Discount Investments exercised 2.4 million options at $45 per share, $5 above UPC's market price at the time. Revenue from the deal amounted to $108 million with after-tax profits of $53 million.