JERUSALEM, March 24 (Reuters) - Gazit-Globe, Israel’s largest real estate investment company, swung to a loss in the fourth quarter of 2014 due to losses from currency hedging transactions, it said on Tuesday.
Gazit-Globe said it lost 217 million shekels ($55 million) in the last three months of last year, compared with net income of 224 million in the period a year earlier.
It said this was mainly an accounting loss resulting from marking to market financial derivatives, mostly currency swaps, of 338 million shekels. During the October-December period, the shekel weakened sharply versus the U.S. and Canadian dollars and the euro.
Rental income in the quarter edged down 1 percent to 1.26 billion shekels, with income from properties whose development has been completed largely offsetting asset sales.
Net operating income, which reflects the group’s core business, dipped 2 percent to 840 million shekels, while funds from operation (FFO) fell 8 percent to 135 million.
Roni Soffer, Gazit-Globe’s president, said the company was in the middle of developing and redeveloping 6.5 billion shekels worth of property.
“We expect the potential cash flow from these activities to be reflected in our results over the next few years,” he said.
Gazit-Globe said it would pay a dividend of 0.46 shekel a share for the fourth quarter - up from 0.45 shekel in the third quarter - to represent an annual payout of 1.84 shekels. For 2015, it will pay a quarterly dividend of 0.46 shekel a share, a 2.2 percent increase over 2014.
Gazit-Globe operates in the United States through Equity One and in Canada through First Capital Reality Inc . It is the largest shareholder in Finland’s Citycon , controls shopping mall developer Atrium European Real Estate and is expanding in Brazil.
$1 = 3.9289 shekels Reporting by Steven Scheer; Editing by Tom Heneghan