El Al Israel Airlines (TSE: ELAL), controlled by Kenny Rosenberg, is in talks with the state about allowing it to bring forward when it can pay dividends from its profits, Globes has learned. Dividends will likely be distributed after the company’s 2024 results are published within a few weeks, which are expected to show record profits.
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El Al achieved exceptional profitability last year thanks to the fact that most foreign airlines stopped flying to Israel due to the war, which enabled it to raise prices. In the first nine months of 2024, it generated profits of $411 million and has more than $1 billion in cash.
Under the agreement concluded with the state to help the airline during the Covid pandemic, El Al, headed by Dina Ben Tal Janansia, pledged not to distribute dividends before the end of 2025. On December 30 of last year, the company announced that the government had decided to extend its agreement with El Al. El Al regarding providing security to Israeli airlines until February 28, 2025. The company’s update also stated that “the Ministry of Finance will consider reducing the state’s participation in the security expenditures of Israeli airlines.” (Retroactive to January 1, 2025).”
El Al said it is negotiating with the state about gradually reducing state participation in security expenditures “amid review of additional agreements.” The notice did not explicitly state that this referred to the distribution of dividends.
El Al’s share price rose this morning by 6.3%, bringing its market capitalization to more than 4 billion shekels. In the past three years, El Al’s share price has increased by more than 217%, mainly due to the successful year it had last year.
El Al stated in response to the report: “As El Al informed the Stock Exchange on December 30, 2024, the company is conducting negotiations with the state regarding the agreements signed with it in 2021-2022, including reducing the company’s stipulated obligations.” In those agreements.
Published by Globes, Israel Business News – en.globes.co.il – on January 20, 2025.
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