ELBIT REPORTS FIRST QTR 2004 REVENUES INCREASED 36%.

Elbit Medical Imaging Ltd. (NASDAQ:EMITF) ("EMI" or the "company"), Tel Aviv, Isrel, has announced its consolidated results for the quarter ended March 31, 2004.

Net profit for the first quarter of 2004 totaled NIS 30.3 million ($6.7 million), compared to a net loss of NIS 36.7 million in the corresponding period last year.

Revenues for the first quarter increased 36% to NIS 156.5 million ($35 million), compared to NIS 115.3 million in the corresponding perod last year.

Gross profit for the first quarter increased 43% to NIS 51.6 million ($11.4 million), compared to NIS 35.9 million in the corresponding period last year.

The growth in revenues and gross profit in the reported period is due mainly to improvements in operations of entertainment and commercial centers in Hungary and Poland, and hotel operations and management.

Administrative and general costs for the Group for the three months ending March 31, 2004, were NIS 19.6 million ($4.3 million), compared to approximately NIS 18.9 million in the corresponding period last year. This represents 12.5% of turnover in the reported period compared to 16.4% in the corresponding period last year and 15.8% for the 2003.

The net financing income for the Group in the first quarter was NIS 47.3 million ($10.5 million), compared to a net financing loss of about NIS 57.6 million in the corresponding period last year.

The significant change to net financing income in the current period from net financing expenses in the prior year's period is due to a combination of the following two factors:

1. A significant re-valuation of the functional currencies in the company's Plaza Centers subsidiary (particularly the Hungarian Forint (in Hungary 5%), in relation to the exchange rates of the financing currencies (mainly the EURO), in the current year's period, compared to a significant devaluation of the functional currencies in the company's P.C. subsidiary in the corresponding period last year.

2. An increase in income from derivative financial instruments transactions carried out by the company's investment department compared to the income derived from this activity in the corresponding period last year.

Part of this net financing income was offset by financing expenses in the current period, which derived from changes in the exchange rates of the currencies financing the activities of the parent company (mainly the Dollar - from the revaluation of the Dollar by about 3.4% with respect to the NIS).

The current ratio at March 31, 2004 stands at 0.5 compared to 0.48 on December 31, 2003.

The basic net income per share for the three months ending on March 31, 2004, was NIS 1.36 per share ($0.30).

About Elbit Medical Imaging

EMI is a subsidiary of Europe Israel (M.M.S.) Ltd. and focuses on four main fields of operations: Commercial and Entertainment Malls through its subsidiary Plaza Centers; the Hotel segment through its subsidiary Elscint Ltd.; image guided treatment through InSightec; and venture capital investments in the biotechnology and communication business.

For more information, call 212/983-1702.