TEL AVIV, Israel, November 30, 2010 /PRNewswire/ -- Delek Group
Ltd. (TASE: DLEKG.TA , OTCQX: DGRLY) (hereinafter: "Delek Group" or
"The Group") reported its results for the three and nine-month
period ended September 30, 2010. The
full financial statements are available on Delek Group's website
at: http://www.delek-group.com.
Financial Highlights of the Nine Month Period
- Revenues grew year-over-year 12% to NIS 31.7 billion;
- Group operating profit reaches NIS 1.1 billion growing 9%
year-over-year;
- Net income of NIS 302 million;
- Third quarter dividend issued amounted to NIS 500 million
- Strong improvement in profitability in Groups' core
businesses including natural gas sales, European gas station business,
insurance sector and automotive sector;
First Nine Months 2010 Results
Group revenues for the first nine months of 2010 totaled
NIS 31.7 billion, a growth of
approximately 12% compared with NIS 28.4
billion in the same period in 2009. Group revenues in the
third quarter of 2010 amounted to NIS 12.2
billion, an increase of 16% compared with NIS 10.5 billion in the second quarter of 2009.
The increase in nine-month revenues was primarily as a result of
increased sales at the refinery in Tyler,
Texas compared with last year at which time it was closed
following a fire, strong growth in revenues received from the
insurance holdings, and an increased in sales of natural gas
compared with that of last year.
Operating profit for the first nine months of 2010 totaled
NIS 1.1 billion, a 9% increase over
NIS 1.0 billion in the same period in
2009. Operating profit in the third quarter of 2010 amounted to
NIS 295 million, a 26% increase
compared with NIS 238 million in the
third quarter of 2009. The improvement in the operating profit was
due to increases in operating profit at the European gas station
business, Oil and Gas exploration and production, and the Insurance
and Finance operations.
Net income for the first nine months of 2010 was NIS 302 million, compared with the NIS 440 million in the same period in 2009. Net
income in the third quarter was NIS 33
million, compared with NIS 60
million reported in the third quarter of 2009. The reduction
is primarily due to increased financial expenses and in addition to
a net loss at Delek US. Mr. Asaf
Bartfeld, CEO of Delek Group commented, "Following the
recent sale of a portion of Delek Automotive as well as the income
gained from our recent issue of bonds, we are now in a very strong
financial situation with a solid balance sheet. We have excellent
liquidity with NIS 3.5 billion in
liquid assets on the balance sheet. In addition, as a result of
successful restructuring, the majority of assets pledged against
bank debt have been released, demonstrating the Company's improved
financial flexibility."
Continued Mr. Bartfeld, "We have seen a solid improvement in the
results of our Oil and Gas Exploration and Production sector. We
are also excited with the initial results of the drilling at
Leviathan which showed natural gas bearing sands and we await
further results of the logging in the coming weeks. Our European
retail business is much improved compared with last year, operating
at a higher revenue level and lower cost, and we hope to enjoy the
synergies with our recently purchased retail fuel and convenience
store business from BP in France.
Finally, we also recorded strong performance in our Financial and
Insurance activities. We look forward to sharing the fruits of this
success with our shareholders and will be distributing half a
billion shekels as a dividend for the third quarter."
Main Business Highlights
Contribution of Principal Operations to Net Income* (NIS
millions)
Q3 Q3 Q1-Q3 Q1-Q3 FY
2010 2009 2010 2009 2009
US Fuel Sector Operations (30) (14) (32) 81 27
Israeli Fuel Sector Operations 16 9 50 70 82
Delek Europe 13 (2) 82 42 59
Oil and Gas Exploration 43 52 95 20 23
Insurance and Finance Operations 59 23 181 111 181
Automotive Operations 60 65 190 172 250
Capital Gains & Others (128) (73) (264) (56) 242
Net Income 33 60 302 440 864
* Parts of the above table have been extracted from Delek
Group's Third Quarter 2010 Directors Report.
Please review the full report available on the Group's website
http://www.delek-group.com to view the notes for each of the items
above.
Energy & Infrastructure
The Oil and Gas Exploration, and Gas Production sector. Oil and
gas exploration activities contributed NIS
418 million in revenue for the first nine months of 2010,
compared with revenue of NIS 325
million in the same period in 2009. The 29% increase was
primarily as a result of the changed conditions and an increase in
sale price, based on agreements signed with the Israel Electric
Company and Israel Chemicals at the end of December 2009. The amount of gas supplied in the
9 month period, at 2.4 BCM, was higher than that supplied in the
same period last year, at 2.2 BCM. Net income for the first nine
months of 2010 was NIS 95 million
compared to a net income of 14 million in the same period of
2009.
Summarising the recent oil exploration activities off the coast
of Israel, in August 2010, the budget of $150 million for the drilling of the Leviathan
prospect was approved. In October
2010, the Sedco Express drilling rig arrived at the site at
about 135 kilometers west of Haifa
and began drilling. Drilling is planned at three targets and to a
final depth of 7,200 meters (including water depth) and is expected
to take approximately five months. At the end of November it was
reported that from the initial analysis of the information gathered
while drilling, it seemed that the primary target has natural gas
bearing sands. Drilling operations are planned to continue with
additional tests to be performed, including electrical logs.
Delek US (NYSE: DK; Delek Group holds 72.6% end-Q3 2010):
Revenues in the first nine months of 2010 were NIS 10.4 billion compared with NIS 7.2 billion in the first nine months of 2009,
an increase of 44%. Net loss in the first nine months of 2010 was
NIS 45 million compared with a net
income of NIS 113 million in the same
period in 2009.
During the third quarter 2010, the Company conducted unplanned
maintenance on several process units at the Tyler refinery. The crude unit at Tyler was offline for approximately 14 days
during late July and early August, resulting in lower throughputs
and, subsequently, lower sales volumes at the refinery in the
period, when compared to the third quarter 2009.
Gulf Coast refining economics improved during the third quarter
2010, as evidenced by a nearly 17 percent increase in the benchmark
Gulf Coast 5-3-2 crack spread, when compared to the year-ago
period. The Gulf Coast 5-3-2 crack spread was $7.45 per barrel in the third quarter 2010,
versus $6.38 in the third quarter
2009
In the retail segment in the quarter, same-store merchandise
sales increased 6.3 percent in the third quarter 2010, versus an
increase of 1.8 percent in the third quarter 2009. The improvement
in same-store merchandise sales is attributable to several key
factors, including successful promotional efforts within the dairy,
grocery and beer categories, consumer acceptance of recently
introduced private label products, as well as continued growth in
fresh food sales.
Delek - the Israel Fuel Company Ltd. (TASE: DLKIS.TA; Delek
Group holds 77% end-Q3 2010): Revenues in the first nine months of
2010 were NIS 3.8 billion compared
with 3.1 billion in the first nine months of last year. This
increase was due primarily to the increase in fuel prices, an
increase in real terms of the quantities of gasoline sold to
commercial enterprises, an increase in sales at the Menta
convenience stores.
Net income in the first nine months of 2010 amounted to
NIS 72 million compared with a net
income of NIS 80 million in the same
period in 2009.
Delek Europe. Delek is an operator of 850 gas stations across
the Benelux region. Revenues in the first nine months of 2010 were
EUR1.8 billion compared with
EUR1.4 billion in the same period
last year. Net income in the first nine months of 2010 was
EUR19 million, compared with a net
income of EUR8 million in the same
period in 2009. The improvements were driven by an improvement in
the gross profitability in the gasoline sector, a reduction in
expenses and growth in the convenience store sector.
On October 1, 2010, Delek Europe
completed the acquisition of BP's retail fuels and convenience
business in France, including 416
petrol stations and its interests in 3 terminals was approved by
the European Commission. The cost amounted to about Euro 175 million (including the expenses related
to the deal, but subject to working capital adjustments)
Insurance and Financial Services
The activities of this segment are primarily conducted through
two insurance companies; Israeli insurance company, Phoenix
Holdings Ltd. (TASE: PHOE), and general US insurer, Republic
Companies, Inc. that is an indirectly wholly owned subsidiary.
The insurance and financial services sector contributed
NIS 181 million to the Group's net
income in the first nine months of the year, a growth of 63%,
compared to a net income of NIS 111
million in the same period last year.
Phoenix reported a sharp rise
in net profit amounting to NIS 239
million in the first nine months months of the year,
compared to NIS 136 million last
year. The results were improved over those of last year due to the
significant improvement in the capital market environment globally
and in Israel in the past
year.
Republic Companies reported a strong improvement in net profit
amounting US$12 million in the first
nine months of the year, compared with US$1
million, in the same period last year.
Automotive Operations
Delek Automotive Systems Ltd. (TASE: DLEA.TA; Delek Group holds
55% end-Q3 2010): Delek Automotive is the exclusive distributor of
Mazda and Ford in Israel. Revenues
in the first nine months of 2010 reached NIS
3.4 billion at around the same level in the same period of
2009. Delek Automotive sold 30,627 cars in the first nine months of
2010 compared with 31,461 in the same period last year, and
currently holds a market share of approximately 19%. Net income at
Delek Automotive in the first nine months of 2010 reached
NIS 313 million compared to a net
income of NIS 305 million in the same
period in 2009.
In October, a Delek Investments, a wholly-owned subsidiary of
the Delek Group, sold 22% of the issued share capital of Delek
Automotive to Gil Agmon, CEO of
Delek Automotives for approximately NIS 1
billion, based on the price of NIS
50 per share. With the completion of this transaction,
Gil Agmon holds 38% of Delek
Automotive while Delek Investments directly holds 33% of Delek
Automotive, and Delek Investments has thus ceased its exclusive
control of Delek Automotive. Following this sale, Delek Group will
record a capital gain of approximately NIS 2
billion in the fourth quarter of 2010.
Dividend Distribution
On November 30, 2010, the Board of
Directors of Delek Group declared a cash dividend distribution for
third quarter of 2010 in the amount of approximately NIS 500 million (approximately NIS 43.95 per share) to the shareholders on
record as of December 8, 2010. The
dividend will be paid on December 20,
2010.
Conference Call Details
The Company will be hosting a conference call in English on
Wednesday, December 1, 2010 at
9am ET, 2pm UK time, 4pm
Israel time. On the call, CEO
Asaf Bartfeld, CFO Barak Mashraki and VP, Investor Relations,
Dalia Black, will review and discuss
the results, and will be available to answer your questions.
To participate, please call one of the following
teleconferencing numbers: US: 1-888-407-2553, UK: 0-800-917-9141,
Israel: 03-918-0610.
About The Delek Group
Delek Group is the leading energy & infrastructure group
based out of Israel with
investments in upstream & downstream energy, water desalination
and power plants globally. In addition, Delek is the number one
importer & distributor of vehicles in Israel and owns insurance assets in
Israel and the US. Earlier this
year, Delek Group, through its subsidiaries, discovered significant
quantities of high quality natural gas off the coast of
Israel. Delek Group sales reached
over 43 billion Israeli shekel in 2009.
For more information on Delek Group please visit
http://www.delek-group.com.
Contact
Dalia Black
Vice President, Investor Relations
Delek Group
Tel: +972-9-863-8444
Email: black_d@delek.co.il
Kenny Green International Investor
Relations CCG Investor Relations Tel: (US)
+1-646-201-9246 E-mail:
delek-group-ir@ccgisrael.com