Ituran’s First Sales Drop in 3 Years on Brazil: Israel Ov
Ituran Location and Control Ltd., the Israeli technology company down 20 percent from a 2012 high, expects to report the first annual sales drop in three years after a weaker Brazilian currency and government delays eroded revenue in its second-biggest market.
The Israeli manufacturer of devices for locating stolen vehicles won’t match or exceed this year the $160.2 million of sales recorded in 2011, co-Chief Executive Officer Eyal Sheratzky said in a phone interview from Tel Aviv yesterday. Ituran (ITRN) dropped 1.2 percent to $12.46 in New York, as the Bloomberg Israel-US Equity Index of the most-traded Israeli stocks in the U.S. sank 0.5 percent to 85.49, a three-week low.
The Brazilian real’s 8.4 percent slump against the dollar, the second-biggest this year among 25 developing-nation currencies tracked by Bloomberg, and a failure to implement a law requiring cars to include an anti-theft device hobbled sales in a market that made up 39 percent of 2011 revenue, Sheratzky said. Israel was the biggest source of income, accounting for 50 percent, data compiled by Bloomberg show.
“One of the exposures that investors have to consider in Ituran is that it is influenced by different currencies,” Sheratzky, who shares the CEO post with Nir Sheratzky, said. “The delay in the law is something we can’t control. Brazil will continue to be a growth driver for us.”
Ituran is looking to expand in Brazil as car owners and insurance companies are looking for a solution in light of the high crime rate, Sheratzky said. There were 4,767 murders in 2010 in Rio de Janeiro state, which mostly consists of the capital city and its environs, according to a government report. That compares with 536 murders in New York City.
The company is also planning on entering the rest of the region including Colombia, Ecuador and Mexico and is also considering acquisitions.
“We are looking for a local provider and don’t want to start from scratch in any region,” Sheratzky said. “Our balance sheet is strong and we can use it to make acquisitions.”
Ituran announced a deal of “substantial financial scope” with General Motors Brazil in April through a subsidiary, for the installation of its anti-theft device in the Chevrolet vehicles sold by GM in Brazil. The company is seeking similar deals with other car manufacturers, he said.
Brazil’s National Traffic Council postponed to January 2013 the beginning of the phased implementation of a law that will require new cars and trucks to install a tracking system to help prevent thefts, according to a July 16 statement on its website.
Israel, which has a population of similar size to Switzerland, has about 60 companies traded on the Nasdaq Stock Market, the most of any country outside the U.S. after China. The nation is also home to more startup companies per capita than the U.S.
MagicJack VocalTec Ltd. (CALL), the Israeli company whose founders invented the technology used for making phone calls over the Internet, sank 6.8 percent to $22.16, the lowest level since Aug. 22. The Netanya, Israel-based company was the biggest decliner on the Bloomberg Israel-U.S. gauge.
Perrigo Co. (PRGO), the largest U.S. generic over-the-counter drugmaker, retreated for a fourth day, dropping 0.7 percent to $117.14. The Tel Aviv shares were unchanged today at 454.60 shekels, or $118.03.
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