Elbit Imaging consolidated revenue is NIS 1,474 million for 2010

Elbit Imaging Ltd. ("EI") (TASE, NASDAQ: EMITF) announced today its results for the year 2010.

Years 2010 and 2009 results analysis:

Consolidated revenues in Year 2010 were NIS 1,474 million (US$ 415 million) compared to NIS 698 million reported last year.

The increase is mainly attributable to: (i) gain from a bargain purchase of EDT in the amount of NIS 397 million (US$ 112 million), executed by EPN, which is 43% held by the Company (a bargain purchase represent the difference between the fair value of the net identifiable assets and the aggregate value of consideration). The gain was recorded as a result of the acquisition of a 48% stake in EDT, an Australian investment trust which manages two US REIT portfolios located in 20 states in the United States, executed in June 2010; (ii) gain from sale of our UK hotels in the amount of NIS 199 million (US$ 56 million), executed in December 2010;(iii) and gain from investment property attributable to EDT.

Revenues from commercial centers increased in 2010 to NIS 103 million (US$ 29 million) from NIS 85 million last year. This increase is mainly attributable to the operation of four completed commercial and entertainment centers in 2010 compared to two in the 2009.

Cost of commercial centers decreased to NIS 157 million (US$ 44 million) compared to NIS 169 million reported last year. This decrease is mainly attributable to: (i) devaluation of the EURO against the NIS; offset by (ii) an increase in direct cost of operations of commercial centers.

Gain from fair value adjustment investment property amounted to NIS 40 million (US$ 11 million) in 2010 compared to NIS 3 million reported last year. The gain in 2010 represent the revaluation of EDT assets since its acquisition in June 2010.

Revenues from Investment property rental income was in 2010 NIS 122 million (US$ 24 million). The gain attributable to the operation of EDT in the second half of 2010.

Cost of Investment property expenses was in 2010 NIS 51 million (US$ 14 million).

Revenues from hotels operations and management increased to NIS 404 million (US$ 114 million) as compared to NIS 397 million reported last year. This increase is mainly attributable to the improvement in revenues from our hotels in the United Kingdom, Belgium, Romania and our new hotel in Schiphol, Holland, and is offset by the devaluation of the EURO and the British Pound (the functional currencies in which our hotels operate) against the NIS.

Costs and expenses from hotels operations and management decreased to NIS 341 million (US$ 96 million) compared to NIS 353 million reported last year. This decrease is mainly attributable to the devaluation of the EURO and the British Pound against the NIS.

Revenues from sale of medical systems decreased to NIS 34 million (US$ 10 million) compared to NIS 62 million reported last year. The decrease is attributable to the number of the systems sold in 2010 compared to 2009.

Costs and expenses of medical systems operations decreased in 2010 to NIS 64 million (US$ 18 million) compared to NIS 67 million reported last year.

Research and development expenses decreased in 2010 to NIS 58 million (US$ 16 million) compared to NIS 74 million reported last year. These costs are attributable to the operations of InSightec.

Revenues from sale of fashion merchandise increased to NIS 175 million in 2010 (US$ 49 million) compared to NIS 118 million reported last year. This increase is attributed mainly to the operating of four new GAP stores during 2010.

Cost and expenses of fashion merchandise increased in 2010 to NIS 198 million (US$ 56 million) compared to NIS 134 million reported last year. This increase was attributable mainly to increase in retail operation as mentioned above.

General and administrative expenses decreased in 2010 to NIS 65 million (US$18 million) in 2010 as compared to NIS 66 million in 2009.

Financial expenses, net resulted in expenses of NIS 373 (US$ 105 million) in 2010 compared to NIS 262 million reported last year. Such increase is comprised of:

(I) A decrease in the amount of NIS 20 million (US$ 6 million), attributable mainly to non-cash expenses derived from changes in fair value of financial instruments (mainly Plaza Centers notes, currency and interest hedge transactions, derivatives and marketable securities) all measured at fair value through profit and loss.

(II) An increase in the amount of NIS 78 million (US$ 22 million), in non-cash expenses related to exchange rate differences. The increase is mainly attributable to exchange rate losses of Plaza Center's notes as a result of the devaluation of 13% in the EURO against the NIS during 2010.

(III) An increase in interest expenses, net in the amount of NIS 53 million (net of: (i) interest income, (ii) capitalization of financial expenses to qualified assets and (iii) CPI linkage on borrowing). Such increase is mainly attributable to interest expenses attributable to EDT operational and to decrease in interest receive from deposits in 2010.

Impairment charges and other expenses, net decrease to NIS 85 million (US$ 24 million), compared to NIS 260 million reported last year. The Company impaired Plaza Center's real estate assets in the amount of NIS 43 million in 2010 as compared to NIS 217 million in 2009.

Income before taxes in 2010 was NIS 74 million (US$ 21 million) as compared to Loss before taxes in the amount of NIS 703 million in 2009.

Income Tax in 2010 was NIS 5 million (US$ 1.5 million) as compared to tax benefits in the amount of NIS 36 million last year.

Income from continuing operations in 2010, was NIS 69 million (US$ 19 million) compared to loss of NIS 668 million reported last year.

Profit from discontinuing operation, net in 2010 was NIS 4 million (US$ 1 million) compared to NIS 17 million reported last year.

Income in 2010 was NIS 74 million (US $21 million) of which NIS 62 million (US$ 17 million) is attributable to the equity holders of the Company and amount of NIS 12 million (US$ 3 million) is attributable to the minority interest.

Loss in 2009 was NIS 651 million of which NIS 531 million is attributable to the equity holders of the Company and income of NIS 120 million is attributable to minority interest.

Mr. Dudi Mahloof, CO-CEO of Elbit Imaging Ltd. announced:

"We are closing the year 2010 with a profit, where in this year we have undertaken important strategic steps.

As part of the strategic decision to focus on the primary operations of the Company, namely real estate business, our goal is to establish our US real estate division as an additional primary division alongside Plaza Centers and it is our intention to expand this division significantly. We continue to see great potential in the field of commercial centers in the United States and we are working to locate additional attractive deals. This business strategy has already borne fruit, which is reflected in the revenues from the commercial centers in the United States as a result of the EDT transaction which was signed in June 2010. We expect that with the growth of our US operations, these operations will become a substantial part of the Company's balance sheet.

We view our Indian operation as a long term growth-engine with a focus on residential real estate development. After many years of work we expect that over the course of the coming year, the sale of apartments will commence in the projects we own. Additionally, our subsidiary, Plaza Centers will open to the public its first shopping center, the Koregaon Park, in Pune, India.

Regarding the commercial centers in Eastern Europe, we have opened two new centers in Poland and secured bank loans to finance approximately 70% of the development costs for an additional 2 commercial centers in Serbia and Poland. Likewise, we see a clear trend of improvement in some of the countries where we operate (mainly Poland and Serbia), which resulted the commenced of the construction of new projects in parallel to securing construction loans.

As part of the Company's strategy and with a goal of expanding our shareholder equity, we took steps in our hotel division of selling the group's three hotels in London to Park Plaza, which generated to us a profit. Likewise, we are identifying improvements in income and operations of the hotels division, which contribute significantly to the increase in value of our hotels

Another strategic move undertaken this year was placing the medical operations division of the Company into a publicly traded shell. to The establishment of this platform enable us to float a significant value to this division alongside with creating independent capital sources for this division, in order to continue strongly with the research and development activities of InSightec Ltd. and Gamida Cell."