Egyptian gas disruptions widen Ampal's loss

Ampal-American Israel Corporation (Nasdaq: AMPL; TASE:AMPL), controlled by chairman Yosef Maiman, posted a net loss of $39.3 million (($0.7 per share) for the second quarter of 2011, compared with a net loss of $2.8 million for the corresponding quarter of 2010. Most of the loss was due to the company's 12.5% stake in Egyptian gas supplier East Mediterranean Gas Company (EMG).

Gas deliveries to Israel by EMG have been halted four times this year, following attacks on pipelines in Sinai owned by the Egyptian Natural Gas Company (Gasco).

Ampal said, " As a result of the continued interruption of gas supply to EMG and the delivery of gas to EMG below contracted quantities, the international shareholders of EMG, including Ampal, have commenced procedures under applicable bilateral investment treaties between several countries and Egypt. Such procedures may ultimately result in arbitration of claims under the various treaties, EMG’s gas supply agreement or other agreements."

Ampal's revenue rose to $142.7 million for the second quarter from $119.6 million for the corresponding quarter.
Ampal had $134.3 million in cash at the end of June, and $379 million in debt, including $283 million owed to bondholders. The rest is owed to banks. The company's shareholders' equity has shrunk by $21 million since the beginning of the year to $164.4 million.

In outlining its strategy, Ampal said in its presentation today, "Ampal’s current policy is to apply retained earnings to finance its business activities and to redeem or repay Ampal’s outstanding debt (including its unsecured notes traded on the TASE). The payment of cash dividends in the future will depend upon Ampal’s operating results, cash flow, working capital requirements, debt and other factors Ampal’s board of directors will deem pertinent."