<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                               ------------------

                                   FORM 10-Q

(MARK ONE)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 1997

                                       OR

[    ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from ___________ to _______________

                        Commission file number: 811-854

                              IIC Industries, Inc.
--------------------------------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                 Delaware                               13-567594          
------------------------------------------      ---------------------------
     (STATE OF OTHER JURISDICTION OF               (IRS IDENTIFICATION
      INCORPORATION OR ORGANIZATION)                     NUMBER)

   420 Lexington Avenue; New York, N.Y.                   10170
------------------------------------------      ---------------------------
 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)               (ZIP CODE)


REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 297-6132
--------------------------------------------------------------------------------
              FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
                         IF CHANGED SINCE LAST REPORT.

Indicate by check whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days Yes x No

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 1,423,368 shares of common
stock outstanding at July 31, 1997.


<PAGE>




                             FINANCIAL INFORMATION



  FINANCIAL STATEMENTS


                                                                 Page
                                                                 ----

              Consolidated Balance Sheets
              at June 30, 1997
              and December 31, 1996                                3

              Consolidated Statements of Income
              for the Six Months Ended
              June 30, 1997 and June 30, 1996                      5

              Consolidated Statements of Income
              for the Three Months Ended
              June 30, 1997 and June 30, 1996                      6

              Consolidated Statement of Cash Flows
              for the Six Months Ended
              June 30,1997 and June 30, 1996                       7

              Notes to Consolidated Financial
              Statements                                           8




                                      -2-
<PAGE>

                     IIC Industries, Inc. and Subsidiaries

                          CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)
                (dollar amounts in thousands, except share data)






                                                    JUNE 30,      December 31,
                          ASSETS                      1997            1996
                                                  -----------     ------------

CURRENT ASSETS
    Cash and cash equivalents                        $18,519       $  17,211
    Accounts receivable, net                          44,281          43,400
    Advances to subcontractors                           265             282
    Inventories (Note C)                              42,495          61,178
    Other current assets                               5,512          10,561
                                                  ----------        --------

         Total current assets                        111,072         132,632


RESTRICTED CASH                                        4,018           8,356

PROPERTY AND EQUIPMENT, NET                           32,214          33,630

INVESTMENTS IN AND ADVANCES TO AFFILIATES             26,340          26,525

OTHER INVESTMENTS                                        366             555

OTHER ASSETS                                           2,373           1,858
                                                 -----------       ---------

                                                    $176,383        $203,556
                                                    ========        ========











The accompanying notes are an integral part of these statements.

                                     -3-
<PAGE>


                     IIC Industries, Inc. and Subsidiaries

                    CONSOLIDATED BALANCE SHEETS (CONTINUED)
                                  (UNAUDITED)
                (dollar amounts in thousands, except share data)




                                                      JUNE 30,   December 31,
          LIABILITIES AND STOCKHOLDERS' EQUITY         1997          1996
                                                    -----------  ------------


CURRENT LIABILITIES
    Accounts payable                                  $26,470      $  20,554
    Bank loans                                         15,681         35,750
    Current maturities of long-term debt                   30             88
    Accrued expenses and other payables                11,279         18,083
    Advances from customers                             8,614         10,693
                                                   -----------    ----------

         Total current liabilities                     62,074         85,168


LONG-TERM DEBT, less current portion                    3,168          2,160


DUE TO AFFILIATES                                       1,870          1,850

OTHER LIABILITIES AND DEFERRED
    CREDITS                                             5,265          5,854

MINORITY INTEREST IN SUBSIDIARIES                      17,078         20,494
                                                      --------      --------

                                                       89,455        115,526

CONTINGENCIES (Note D)

STOCKHOLDERS' EQUITY
    Common stock, $1.00 par value per share;
       authorized 1,800,000 shares; issued
       1,585,806 shares                                 1,586          1,586
    Additional paid-in capital                         22,941         22,941
    Retained earnings                                  94,687         92,053
    Foreign translation adjustment                    (29,561)       (25,825)
    Less treasury stock - at cost (162,438 shares)     (2,725)        (2,725)
                                                    ----------      --------

                                                       86,928         88,030
                                                       ------       --------

                                                     $176,383       $203,556
                                                    =========       ========


The accompanying notes are an integral part of these statements.

                                      -4-

<PAGE>


                     IIC Industries, Inc. and Subsidiaries

                       CONSOLIDATED STATEMENTS OF INCOME
                                  (UNAUDITED)
                (dollar amounts in thousands, except share data)




                                                       SIX MONTHS ENDED JUNE 30,
                                                       -------------------------
                                                          1997        1996
                                                          ----        ----

Net sales                                               $120,421    $127,210
Cost of sales                                             95,813      97,080
                                                          ------      ------

         Gross profit                                     24,608      30,130

Selling, general and administrative expenses              22,266      22,846
                                                          ------      ------

         Operating income                                  2,342       7,284
                                                           -----       -----

Other income (expenses)
    Interest income                                        1,041       1,530
    Equity in earnings  of affiliates                      1,881       2,528
    Foreign currency loss (Note B)                        (1,396)       (129)
    Gain on sale of noncurrent assets, net                 1,827         237
    Interest expense                                      (2,473)     (1,565)
    Other, net                                               434         429
                                                            ----        ----

         Income before income taxes and
             minority interest                             3,656      10,314

Income taxes                                              (1,192)     (1,625)
                                                         --------    --------

         Income before minority interest                   2,464       8,689

Minority Interest                                            170      (2,557)
                                                             ---      -------

         NET INCOME                                      $ 2,634     $ 6,132
                                                          ======      ======

Net income per common share                               $ 1.85      $ 4.31
                                                           =====       =====

Weighted average number of common shares outstanding   1,423,368   1,423,368
                                                       =========   =========



The accompanying notes are an integral part of these statements.


                                      -5-
<PAGE>


                     IIC Industries, Inc. and Subsidiaries

                       CONSOLIDATED STATEMENTS OF INCOME
                                  (UNAUDITED)
                (dollar amounts in thousands, except share data)




                                                     THREE MONTHS ENDED JUNE 30,
                                                     ---------------------------
                                                          1997        1996
                                                          ----        ----

Net sales                                                $59,980    $67,712
Cost of sales                                             47,459     51,540
                                                          ------     ------

         Gross profit                                     12,521     16,172

Selling, general and administrative expenses              10,945     11,264
                                                          ------     ------

         Operating income                                  1,576      4,908
                                                           -----      -----

Other income (expenses)
    Interest income                                          501        587
    Equity in earnings  of affiliates                      2,397      2,100
    Foreign currency (loss) gain  (Note B)                (1,309)       279
    Gain on sale of noncurrent assets, net                   326        165
    Interest expense                                        (764)      (593)
    Other, net                                               143        275
                                                            ----       ----

         Income before income taxes and
             minority interest                             2,870      7,721

Income taxes                                                (441)    (1,114)
                                                           ------   --------

         Income before minority interest                   2,429      6,607

Minority Interest                                            (92)    (2,229)
                                                             ----    -------

         NET INCOME                                      $ 2,337    $ 4,378
                                                          ======     ======

Net income per common share                               $ 1.64     $ 3.08
                                                           =====      =====

Weighted average number of common shares outstanding   1,423,368  1,423,368
                                                       =========  =========



The accompanying notes are an integral part of these statements.

                                      -6-

<PAGE>



                     IIC Industries, Inc. and Subsidiaries


                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

                         (dollar amounts in thousands)



<TABLE>
<CAPTION>


                                                                  SIX MONTHS  ENDED  JUNE 30,
                                                                  ---------------------------
                                                                      1997          1996
                                                                      ----          ----
<S>                                                                  <C>           <C>    

Net cash provided by operating activities                            $18,691       $18,467
                                                                     -------       -------
Cash flows from investing activities
    Purchase of subsidiary shares, net of cash acquired                 (336)
    Purchase of property and equipment                                (2,303)       (3,775)
    Purchase of investments                                           (2,159)       (3,197)
    Purchase of other assets                                              (5)         (284)
    Proceeds on disposal of property and equipment                     1,909           397
    Proceeds on disposal of investments                                  191            37
    Restricted cash                                                    4,339         1,177
                                                                       -----         -----

      Net cash provided by (used in)  investing activities             1,636        (5,645)
                                                                       -----        -------

Cash flows from financing activities
    Issuance of long-term debt                                         1,339           403
    Payments on long-term debt                                                         128
    Net payments of short-term bank loans                            (19,724)       (8,691)
                                                                     --------       -------

         Net cash used in financing activities                       (18,385)      (8,160)
Effect of exchange rate on cash                                         (634)         (414)
                                                                        -----         -----
         Net increase  in cash and cash equivalents
           during the period                                           1,308         4,248
Cash and cash equivalents at beginning of period                      17,211        19,414
                                                                      ------        ------
Cash and cash equivalents at end of period                           $18,519       $23,662
                                                                     =======       =======
Supplemental disclosure of cash flow information:
    Cash paid during the period for
       Interest                                                      $ 2,590       $ 1,361
       Income taxes                                                    1,555         1,632
</TABLE>




The accompanying notes are an integral part of these statements.

                                      -7-
<PAGE>



                     IIC Industries, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)



NOTE A - BASIS OF PRESENTATION

     The consolidated financial statements included herein which have been
     prepared by the Company, without audit, pursuant to the rules and
     regulations of the Securities and Exchange Commission, include the
     accounts of IIC Industries Inc. and all material majority-owned
     subsidiaries (collectively the "Company"). All material intercompany
     transactions and balances have been eliminated. Certain information and
     footnote disclosures normally included in financial statements prepared in
     accordance with generally accepted accounting principles have been
     condensed or omitted pursuant to such rules and regulations.

     In the opinion of management, the consolidated financial statements
     contain all adjustments which are those of a recurring nature and
     disclosures necessary to present fairly the financial position of the
     Company as of June 30, 1997 and December 31, 1996 and the results of
     operations and cash flows for the six months ended June 30, 1997 and June
     30, 1996.


NOTE B - FOREIGN CURRENCY EXCHANGE

     Investor Rt ("Investor"), a majority-owned subsidiary, uses the local
     currency, the Hungarian forint, as its functional currency and translates
     all assets and liabilities at balance sheet exchange rates, all income and
     expense accounts at average rates and records adjustments resulting from
     the translation in a separate component of shareholders' equity.

     The Israel Tractors and Equipment Company Limited ("Israel Tractor"), a
     wholly-owned subsidiary, uses the US dollar as the functional currency,
     since the dollar is the currency in which most of the significant business
     of Israel Tractor is conducted, or to which it is linked. Balton C.P.
     Limited ("Balton"), a majority-owned subsidiary, uses the US dollar as the
     functional currency, since the African subsidiaries operate in
     hyperinflationary economies. These subsidiaries translate monetary assets
     and liabilities at historical rates. Income and expense accounts are
     translated at the rate of exchange prevailing at the date of transaction,
     except that depreciation is translated at historical rates. Adjustments
     resulting from the translation of these entities are included in results
     of operations.

     Transactions arising in a foreign currency are translated into the
     functional currency at the rate of exchange effective at the date of the
     transaction and gains or losses are included in results of operations.

                                      -8-

<PAGE>


                     IIC Industries, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)



NOTE C - INVENTORIES

     Inventories are as follows:

                                                   JUNE 30,       December 31,
                                                    1997             1996
                                                    ----             ----
          Raw materials                            $5,126          $  23,127
          Work-in-progress                            855                452
          Finished goods                           36,514             37,599
                                                   ------             ------

                                                  $42,495            $61,178
                                                  =======            =======


NOTE D - CONTINGENCIES

     The Company has given a guarantee to the bankers of Balton amounting to
     $1.6 million. The guarantee is in respect of various outstanding letters
     of credit given by the bankers of certain of Balton's creditors. The
     Company has also agreed to indemnify a co-guarantor for any losses
     accumulating to $510,000.

     Balton has given guarantees to third parties in the amount of
     approximately $1,250,000.

     Investor and certain subsidiaries are potentially liable with respect to
     certain guarantees of debt and other financial instruments of other
     related and nonrelated companies to the extent of approximately $10.6
     million.


NOTE E - INVESTMENT IN AFFILIATE

     At June 30, 1997, the Company's effective ownership percentage of
     Danubius, Rt. ("Danubius"), a publicly traded company, was approximately
     30% at a cumulative cost of approximately $25 million. Danubius owns a
     number of hotels in Hungary and specializes in spa facilities.


                                      -9-
<PAGE>




                     IIC Industries, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)





NOTE E (CONTINUED)

Accordingly, the Company accounted for this investment under the equity method
at June 30, 1997. Under this method, the investment is carried at cost plus the
Company's share of earnings or losses less distributions. Since the Company's
share of the underlying net assets of Danubius exceeded the cost at the various
purchase dates, the excess of the fair value of the net assets acquired over
the cost is amortized over a period of forty years

The following is summarized financial information of Danubius (in thousands),
which was prepared in accordance with international accounting standards. There
were no significant differences between international accounting standards and
generally accepted accounting standards in the United States:


                                           JUNE 30, 1997          June 30, 1996
                                           -------------          -------------


         Current assets                        $  42,058             $  22,047
         Noncurrent assets                       164,627               126,478
         Current liabilities                      24,906                12,941
         Noncurrent liabilities                   50,895                11,048
         Stockholders' equity                    130,884               124,536




                                        SIX MONTHS ENDED      Six Months ended
                                           JUNE 30, 1997         June 30, 1996
                                           -------------         -------------


         Sales                                   $50,183                $32,045
         Operating income                          5,875                  7,517
         Net income                                6,360                  7,227




                                     -10-
<PAGE>



                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

     The Company is presently operated as a holding company with subsidiaries
in three principal operating geographic areas: (1) Investor RT, a Hungarian
holding company ("Investor" or "Investor Group"), which through its
subsidiaries, engages in a variety of commercial activities in Hungary; (2) The
Israel Tractors and Equipment Company Limited ("Israel Tractor"), an Israeli
corporation, which distributes tractors and related heavy machinery in Israel
and (3) Balton C.P. Limited, an English holding company with African
subsidiaries ("Balton CP") engaged in trading activities in several African
countries.

     Substantially all of the Company's revenues are derived from foreign
operations. As such, its income is significantly affected by fluctuations in
currency exchange rates and by currency controls. Most of the countries where
the Company operates such as Hungary and several African countries do not have
freely convertible currencies and their currencies have been subject to
devaluations in recent years. In particular, during 1996, the income from the
Company's Hungarian and African subsidiaries was significantly reduced by
losses arising from foreign exchange transactions due to significant currency
devaluations against the U.S. dollar. The Hungarian currency which is not
freely convertible and which floats against a basket of two currencies (the
U.S. Dollar and the European Currency Unit) underwent devaluations against the
U.S. Dollar at the rate of 21% during 1996. Since the beginning of 1997, the
Hungarian currency has been further devalued by approximately 14% against the
U.S. Dollar. Since the functional currency for Investor is the Hungarian
Forint, these devaluations have resulted in certain currency translation
adjustments directly impacting stockholders' equity. See Notes A(8) and P of
Notes to Registrant's Consolidated Financial Statements on Form 10-K for the
year ended December 31, 1996.

     The Company may be subject to tax in some or all of the foreign countries
in which it has operations. However, foreign taxes imposed on the Company's
income may qualify as a foreign income tax and therefore be eligible for credit
against the Company's United States income tax liability subject to certain
limitations set out in the Internal Revenue Code of 1986, as amended (or
alternatively, for deduction against income in determining such liability). The
limitations set out in the Code include, among others, computation rules under
which foreign tax credits allowable with respect to specific classes of income
cannot exceed the United States federal income taxes otherwise payable with
respect to each class of income. Foreign income taxes exceeding the credit
limitation for the year of payment or accrual can be carried back for two
taxable years and forward for five taxable years, in order to reduce United
States federal income taxes, subject to the credit limitations applicable in
each of such years. Other restrictions on the foreign tax credit include a
prohibition on the use of the credit to reduce liability for the United States
corporate alternative minimum taxes by more than 90%.

                                      11

<PAGE>


     The Company has three primary areas of operation with respect to its
subsidiaries:
     (a)      Investor and its subsidiaries in Hungary
     (b)      Israel Tractor in Israel
     (c)      Balton CP and its subsidiaries in Nigeria, Ghana, Zambia,
              Tanzania, Kenya and Uganda.

     The Company has five principal business segments:
     (a)      vehicle sales and service
     (b)      export/import and processing/storage of agricultural products
     (c)      the distribution of tractors and other heavy equipment
     (d)      the sale of agricultural, communications and electrical equipment
     (e)      other industries including retail and wholesale consumer products
              and Hungarian corporate.

RESULTS OF OPERATIONS
              The table below sets forth for the six months ended June 30, 1997
and 1996 certain information with respect to the results of operations of the
Company and its principal subsidiaries.

<TABLE>
<CAPTION>
Six Months Ended        Net Sales              Gross Profit         Income (Loss) before      Net Income (Loss)
June 30, 1997           ---------              ------------           Income Taxes and        -----------------
-------------                                                         Minority Interests
                                                                      ------------------
                     Amount         %         Amount         %        Amount          %         Amount        %
                     ------         -         ------         -        ------          -         ------        -
                  (In thousands)          (In thousands)           (In thousands)            (In thousands)
<S>                      <C>        <C>             <C>      <C>           <C>       <C>           <C>        <C> 

IIC Industries               --       --               --      --              1       0.1            (29)    (1.1)
Inc.
(parent company)

Israel Tractors          35,015     29.1            9,464    38.5            753      20.6            100      3.8
&
Equipment Co.
(Israel)

Balton CP Group          24,842     20.6            7,991    32.4          1,742      47.6            549     20.8
(Africa)

Investor RT              60,564     50.3            7,153    29.1          1,160      31.7         $2,014     76.5
                         ------     ----            -----    ----          -----     -----         ------     ----
Group (Hungary)

                       $120,421    100.0          $24,608   100.0         $3,656     100.0         $2,634    100.0
                       ========    =====          =======   =====         ======     =====         ======    =====


Six Months Ended         Net Sales              Gross Profit          Income (Loss) before     Net Income (Loss)
June 30, 1996            ---------              ------------        Minority Interests and     -----------------
-------------                                                             Income Taxes    
                                                                          ------------

                      Amount         %         Amount         %          Amount         %        Amount      %
                      ------         -         ------         -          ------         -        ------      -

                  (In thousands)           (In thousands)            (In thousands)           (In thousands)

IIC Industries                --       --               --      --         406        3.9            400      6.5
Inc.
(parent company)

Israel Tractors &         42,853     33.7           11,645    38.6       2,818       27.3          2,319     37.8
Equipment Co.
(Israel)

Balton CP Group           23,045     18.1            6,375    21.2       2,437       23.6            868     14.2
(Africa)

Investor RT               61,312     48.2           12,110    40.2       4,653       45.2          2,545     41.5
Group (Hungary)         --------    -----          -------   -----     -------      -----         ------    -----

                        $127,210    100.0          $30,130   100.0     $10,314      100.0         $6,132    100.0
                        ========    =====          =======   =====     =======      =====         ======    =====

</TABLE>


                                      12
<PAGE>

CONSOLIDATED RESULTS OF OPERATIONS

     Net Sales. Net Sales on a consolidated basis for the half year ended June
30, 1997 decreased by approximately $7 million as compared to the comparable
period in 1996. This decrease was mainly attributable to a reduction in demand
for Israel Tractor's products.

     Gross Profit. Gross Profit on a consolidated basis for the half year ended
June 30, 1997 decreased by approximately $5.5 million or approximately 18%, to
approximately $24.6 million, or approximately 20.4% of Net Sales, from
approximately $30.1 million, or approximately 23.7% of Net Sales, in the
corresponding period in 1996. This decrease was mainly attributable to
depressed market conditions, and reductions of margins in the Investor group,
primarily in the agricultural sector. Furthermore, the legacy of the irregular
activities of the previous management of Agrimill, who were removed from their
posts in February 1997 contributed to the decrease. Agrimill operates in the
agricultural sector of the Investor group. (See Note O to the Notes of the 1996
Consolidated Financial Statements.)

     Operating income. Operating income on a consolidated basis for the half
year ended June 30, 1996 decreased by approximately $4.9 million, or
approximately 67%, to approximately $2.3 million, or approximately 1.9% of net
sales, from approximately $7.3 million, or approximately 5.7% of Net Sales for
the corresponding period in 1996. This decrease was principally due to the
reasons stated in the Gross Profits section.

     Interest income. Interest income decreased for the half year by
approximately $489,000, or approximately 32%, to approximately $1,041,000 due
to the investment of its cash by Interag in shares in Danubius Hotel & Spa Rt.
(the "Hotel Company" or the "Danubius").

     Interest expense. Interest expense for the half year increased by
approximately $908,000, or approximately 58%, to approximately $2.5 million due
to an increase in bank loans.

     Income before Income Taxes and Minority Interest. Income before Income
Taxes and Minority Interest in the first six months decreased by approximately
$6.7 million, or approximately 65% to approximately $3.7 million in the first
six months (representing approximately 3% of Net Sales for that period) from
approximately $10.3 million for the corresponding period in 1996 (representing
8.1% of Net Sales for that period).

     Minority Interests. Minority Interests in the half year decreased by
approximately $2.7 million as a result of losses in the Investor group.

     Net Income. Net Income for the half year decreased by approximately $3.5
million (or approximately 57%) to approximately $2.6 million (representing
approximately 2.2 % of Net Sales for that period) from approximately $6.1
million for the corresponding period in 1996 (representing approximately 4.8%
of Net Sales for that period).


                                      13
<PAGE>



     The table below sets forth for the six months ended June 30, 1997 and 1996
certain information with respect to the results of operations of the Company
and its five principal business segments.
<TABLE>
<CAPTION>

                            Six Months Ended June 30, 1997                     Six Months Ended June 30, 1996
                                                    Income before                                   Income before
                                                   Income Taxes and                               Income Taxes and
                                Net Sales           Minority Interest        Net Sales            Minority Interest
                             Amount        %        Amount       %       Amount         %         Amount         %
                           (In thousands)          (In thousands)      (In thousands)           (In thousands)
-----------------------------------------------------------------------------------------------------------------------
<S>                             <C>        <C>                 <C>          <C>       <C>          <C>            <C> 
Vehicle sales and              $ 5,289      4.4     $(11)       (0.3)       $4,919     3.9         $ 150           1.5
distribution (Investor)                        

Export and import of            54,649     45.4    (2,233)     (61.1)       54,724    43.0         3,034          29.4
agricultural products                               
(Investor)

Other Industries                   626      0.5     3,405       93.1         1,669     1.3         1,875          18.2
(Investor)                                          

Tractors and heavy              35,015     29.1       753       20.6        42,853    33.7         2,818          27.3
equipment                                               
(Israel Tractor)                                          

Agricultural,                   24,842     20.6     1,742       47.7        23,045    18.1         2,437          23.6
communications and                                        
electrical equipment                                           
(Balton CP)
                              --------    -----    ------      -----      --------   -----       -------         -----
                              $120,421    100.0    $3,656      100.0      $127,210   100.0       $10,314         100.0
                              ========    =====    ======      =====      ========   =====       =======         =====
</TABLE>


         Investor

     The operations of three of the Company's segments are conducted in Hungary
through Investor. Investor's business is significantly affected by general
conditions in Hungary. General economic difficulties have contributed to a
recession in Hungary, which has had a negative effect on Investor's business.
Despite such conditions, following management's actions in reducing overhead
costs and closing unprofitable operations, Investor has shown a profit for the
first six months of 1997.

Vehicle Sales and Service Segment

o    Net Sales for the six months ended June 30, 1997 increased by
     approximately $370,000, or approximately 7.5%, as compared to the
     corresponding period in 1996.

o    There was a Loss before Minority Interests and Income Taxes for the six
     months ended June 30, 1997 of $11,000 as compared to a profit of $150,000
     in the corresponding period in 1996.

     The increase in Net Sales and the decrease in Income before Income Taxes
and Minority Interests was primarily due to increased demand and competition
throughout the motor trade business, resulting from lower margins.


                                      14
<PAGE>


Export/Import and Processing/Storage of Agricultural Products Segment

o    Net Sales for the six months ended June 30, 1997 decreased by
     approximately $75,000, or 0.1% as compared to the corresponding period in
     1996.


o    Income before Income Taxes and Minority Interest for the six months ended
     June 30, 1997 decreased by approximately $5.3 million, or approximately
     174% as compared to the corresponding period in 1996. This decrease was
     mainly attributable to depressed market conditions in the domestic and
     export markets, a reduction of margins due to fierce competition, and the
     legacy of the irregular activities of the previous management of Agrimill,
     who were removed from their posts in February 1997. (See Note O to the
     Notes of the 1996 Consolidated Financial Statements.)



Other Industries

o    Net Sales for the six months ended June 30, 1997 decreased by
     approximately $1.04 million, or approximately 62%, as compared to the
     corresponding period in 1996 due to the disposal of businesses in late
     1996.

o    There was a Profit before Income Taxes and Minority Interest of
     approximately $3.4 million for the six months ended June 30, 1997,
     compared to a profit of approximately $1.9 million for the six months
     ended June 30, 1996 as a result of the increased equity in earnings in
     Danubius.


     ISRAEL TRACTOR: TRACTORS AND HEAVY EQUIPMENT SEGMENT

o    Net Sales for the six months ended June 30, 1997 decreased by
     approximately $7.8 million or approximately 18.2% as compared to the
     corresponding period in 1996, due to a reduction in demand for the
     Company's products.

o    Income before Income Taxes and Minority Interest for the six months ended
     June 30, 1997 decreased by approximately $2.1 million, or approximately
     73% as compared to the corresponding period in 1996 as a result of lower
     trading activity.

     BALTON CP: AGRICULTURAL, COMMUNICATIONS AND ELECTRICAL EQUIPMENT SEGMENT

o    Net Sales for the six months ended June 30, 1997 increased by
     approximately $1.8 million, or approximately 7.8%, as compared to the
     corresponding period in 1996. This was due to the increased demand for the
     Company's products and the consolidation of Dizengoff W.A.Nigeria Limited
     ("Dizengoff"), which was previously accounted for under the equity method.

                                      15
<PAGE>

o    Income before Income Taxes and Minority Interests for the six months ended
     June 30, 1997 decreased by approximately $695,000 , or approximately 28.5
     % as compared to the corresponding period in 1996. This decrease was
     mainly due to a reduced level of activity in Nigeria.


LIQUIDITY AND CAPITAL RESOURCES

     The Company has financed its operations through funds generated internally
and through cash and cash equivalents available at the beginning of 1997. At
June 30, 1997, IIC Industries Inc., the parent company (the "Parent Company"),
and its wholly-owned Israel Tractor subsidiary, had working capital of $39.1
million, including cash and cash equivalents of $14.3 million. Cash of
subsidiaries that are not wholly-owned (including the Investor Group and the
Balton CP Group) is generally not available for use by the Parent Company or
other subsidiaries (except to the extent paid to the Parent Company as
reimbursement for general overhead paid by the Parent Company or as management
fees) other than in the form of dividends, if and when declared. Dividends to
the Parent Company from its Israel Tractor subsidiary are subject to a
withholding tax of 15% to 25%. The Parent Company does not expect to receive
cash dividends or other distributions in the foreseeable future from any of its
subsidiaries.

     At June 30, 1997, Investor, Israel Tractor, and Balton had outstanding
short-term indebtedness of approximately $9.9 million, $1.1 million and $4.6
million, respectively.

     At June 30, 1997, Investor, Israel Tractor and Balton had unused lines of
short-term credit of approximately 10.3 million, $4 million and $3.6 million,
respectively.

     During the first half of 1997, Investor, Israel Tractor and Balton made
capital expenditures of $579,000; $391,000; and $1,3 million, respectively, for
the purchase of equipment and vehicles and improvements to property. Such
expenditures were made from internally generated funds.

     At June 30, 1997, the Company had no significant capital commitments.

INFLATION

     Inflation has been a persistent aspect of the Hungarian economy in recent
years, although the annual rate of inflation has been predictable and has
therefore been taken into account by the government and private businesses.
Inflation has contributed to the devaluation of the Hungarian currency and has
therefore had an effect on Investor's financial condition.

     Inflation in Israel was moderate in 1996 and during the first half of
1997, and therefore did not significantly affect operations in that country.
Furthermore, the devaluation of the Israeli shekel against the U.S. Dollar for
the six months of 1997 was at an annual rate of 9%.

     Significant rates of inflation persisted in the African countries where
Balton CP operates, triggering significant devaluations of local currencies.



                                      16
<PAGE>




                               OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         No reports on Form 8-K were filed during the period covered by this
report.


EXHIBIT NO.       DESCRIPTION
-----------       -----------
   27             Financial Data Schedule



                                      17
<PAGE>




                                   SIGNATURES


     In accordance with the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.



Date:  August 13, 1997
                              IIC INDUSTRIES, INC.



                              By: /s/ Fortunee F. Cohen
                                  ----------------------------------
                                  Fortunee F. Cohen, Secretary