Gazit-Globe, Ltd. (NYSE:GZT) Q2 2018 Earnings Conference Call - Final Transcript

Aug 21, 2018 • 09:45 am ET

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Gazit-Globe, Ltd. (NYSE:GZT) Q2 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Gazit Globe Second Quarter 2018 Results Conference Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. I advise you that this conference is being recorded today, Tuesday, August 21, 2018. The presentation that will be used in today's call and the financial statements can be found on Gazit Globe's website at www.gazitglobe.com.

(Forward-looking Cautionary Statements)

I would now like to hand the conference over to Mr. Chaim Katzman, Founder and CEO of Gazit Globe. Please go ahead.

Executive
Chaim Katzman

Yeah. Thank you very much. Welcome everybody and thank you for joining us for this conference call summarizing the results of the second quarter of 2018. I will begin with a short review of the business and strategic developments, and Adi will then continue with the review of the highlights of the results. At the end of the call, as usual, we will be pleased to take your calls -- your questions, sorry. We recently reported that we liquidated our holdings in Regency Center, thereby realizing a total of NIS1.83 billion in transactions between June and July. Thus, since the beginning of 2018, through the publication date, we sold 18.5 million Regency shares for approximately NIS4 billion. Adi will expand on the sale process and the tax assets when I conclude my review.

I want to point out that these sales are a significant step in implementing our strategy of increasing our, what we call, private collection of real estate and focusing on the direct acquisition of commercial properties that have high barriers to entry, and they are allocating in central cities as well as reducing our leverage and decreasing our holdings in mature investments in public companies.

Following the sale of the remaining Regency shares and in light of acquisitions made during the periods, the value of Gazit's private holding constitutes 37% of the Company's net assets. Moreover, the net debt ratio to total assets LTV on an expanded solo basis continues its downward trend in line with our strategy and has fallen by 1.3% as of June 30, 2018 to 52.1% compared to 53.4% as of December 31, 2017.

We see strong performance in our property portfolio and as expected, our private properties are showing robust income growth. Our same property NOI has grown by 3.1% relative to the comparable period last year. The growth is due, once again, primarily to our objective (ph) subsidiary in Brazil, where we are achieving the double-digit growth of 13.9%, and in Israel, where we are achieving a growth rate of 4.9%.

The Company's proportionate NOI excluding Regency, which is mentioned since being sold in its entirety, grew by 7.4% in the quarter compared to the comparable quarter in the prior year. The Company's proportionate NOI grew by 5.7% in the period relative to the comparable period last year. The stronger growth in the Company's proportionate NOI is due to the steeper growth