"After two volatile years, Shrem Fudim Kelner & Co (TASE: SFK ) is back on the normal profitability track," a source in the company said today. Shrem Fudim Kelner, the parent company handling the group's investment activity, posted NIS 5.5 million profits for Q1 2002, in contrast to the NIS 12.6 million loss in Q1 2001.

In Q4, the company wrote off NIS 27 million on non-financial investments, primarily its stake in investment bank Leader DS. SFK posted a NIS 72 million loss last year, but the company source believes the year-end write offs were one-time events reflecting the current market situation and not indicators of this year¿s developments.

At the beginning of January, Itschak Shrem told TheMarker "Q4 2001 will be the worst quarter Israel has ever known, due to the write-offs everyone will be making. Anyone not making write-offs now is a fool," leading to the conclusion that the company's write-off campaign really is over.

Revenue on consulting and participation in fund profits, the parent company's activity, increased in Q1 by 87% to NIS 7.3 million, most of which came from SFK's share in venture capital fund Pitango 2 profits. In contrast, profits on long term investments dropped 58% to NIS 1.4 million. The value of the company's securities portfolio remained unchanged, despite a drop in leading TASE indices during the period.