The financial report for 2020 published today by El Al Israel Airlines Ltd. (TASE: ELAL) reveals the full extent of the aviation crisis caused by the Covid-19 pandemic and the depth of the problems that new controlling shareholder Eli Rozenberg has bought into.
El Al reported a net loss of $531 million, while revenue fell 70% from 2019 to $623 million. Even before the Covid crisis, the airline had been losing money with accumulated losses of $112 million in 2018 and 2019.
El Al reported negative equity of $257 million while the amount of cash held by the company has shrunk 70% to less than $70 million.
Due to the company’s challenging financial situation, a ‘going concern’ qualification continues to be attached to the financial reports by El Al’s auditors, who added, among other things that the ability of the company, “to meet all its financial obligations depends on events that the company does not have full control over and which are uncertain but vital if the company is to be allowed to cope with the results of the crisis.”
Regarding El Al’s future plans the auditors said that these included, ‘actions to match expenditure and cash flow to the substantial fall in revenue, as well as raising capital.”
The auditors added, “El Al has signed a financing agreement with the state for about $210 million, which is mainly an advance on purchasing tickets for the aviation security staff.” The validity of this agreement is dependent on certain conditions being met.
Published by Globes, Israel business news – en.globes.co.il – on March 25, 2021
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