Isrotel concludes the third quarter with a moderate erosion in the operating profit: NIS 577 million

Isrotel concludes the third quarter with a moderate erosion in the operating profit, as well as in the bottom line of the net profit. The hotel chain's revenues from hospitality services during what is considered the peak of the tourist season totaled NIS 577 million, compared to NIS 570 million in the corresponding quarter in 2021.
Behind the moderate increase in revenues is the return to normal activity after the Corona crisis, compared to the partial activity in the network in the third quarter a year ago. Operating expenses increased accordingly to NIS 357 million, compared to NIS 325 million in the corresponding quarter.
The rate of increase in expenses was higher than the rate of growth in revenues, a gap that caused an 8% drop in operating profit to NIS 166 million. Thus, a moderate retreat was recorded in the net profit, which stood at NIS 120 million, compared to NIS 130 million in the third quarter of the previous year.
Isrotel is owned by the sons of the chain's founder David Lewis, the brothers Ben and Julian Lewis (78.15%) and Ben Lewis also serves as the company's chairman. The chain owns, operates or manages 23 hotels, including 4,856 rooms. The company is in the process of building seven Hotels, five of them in Tel Aviv, one in Eilat and one in the Dead Sea.
The company's cash value at the end of the third quarter of 2022 was NIS 463 million, compared to a cash value of NIS 285 million at the end of September 2021. The company announced in August 2022 a dividend distribution of NIS 50 million.
In the report there is a reference to the possible effect of inflation and the interest rate increase on the company's results. Bishrotel claims that in the meantime the increase in the index had an "immaterial" effect on the group's profitability. At the same time, it was said, inflation could lead to an increase in the price of inputs and that in such a case the costs are expected to be passed on to the consumer.