Delek Group Announces Consolidated Results for the Third Quarter and First Nine Months of 2009
Posted on: Monday, 30 November 2009, 05:30 CST
TEL AVIV, Israel, November 30 /PRNewswire-FirstCall/ --
- Nine Month Net Income Reaches NIS 440 Million; Third Quarter Net Income
of NIS 60 Million
Delek Group Ltd. (TASE: DLEKG.TA, OTCQX: DGRLY) (hereinafter: "Delek
Group" or "The Group") announced today reported its results for the three and
nine month periods ended September 30, 2009. The full financial statements
are available on Delek Group's website at: http://www.delek-group.com.
Financial Highlights
- Nine-month net income reached NIS 440 million; Third quarter
net income contributed NIS 60 million
- Declared additional NIS 33 million dividend for the quarter;
NIS 210 million issued in dividends for the first 9 months of 2009
(excluding the issuance of Delek Real Estate shares);
- Successfully raised $1.5bn in new capital so far in 2009
significantly strengthening the balance sheet;
Results Summary
Group revenues for the first nine months of 2009 totaled NIS 31.8
billion, compared with NIS 39.3 billion in the same period in 2008. Group
revenues in the third quarter of 2009 amounted to NIS 11.9 billion, compared
with NIS 13.0 billion in the third quarter of 2008. The decrease in revenues
was primarily as a result of lower gasoline sales in Israel, Europe and the
United States, as well as the lower price of oil and lower revenues from the
US refinery which only restarted operations towards the end of the second
quarter.
Net income for the first nine months showed significant improvement
reaching NIS 440 million, compared with a net loss of NIS 371 million in the
same period in 2008. Net income in the third quarter showed similar
improvements reaching NIS 60 million, compared with a net loss of NIS 612
million reported in the third quarter of 2008. Group total assets as of
September 30, 2009, amounted to NIS 80.9 billion, compared with NIS 76.7
billion as of December 31, 2008. Delek has raised and restructured a total of
NIS 1.5 billion, all of which is long-term.
Mr. Asaf Bartfeld, CEO of Delek Group commented, "2009 has so far been a
substantial turnaround year for the Delek Group. Our assets continue to
provide increasing returns and we are unleashing the substantial potential
inherent across the whole Group. Our results are a testimony that we emerged
the global financial crisis a stronger and more focused Company. The recent,
and highly over-subscribed capital raises that we have completed, amounting
to almost NIS 1.5bn this year, have significantly improved and strengthened
the Group's balance sheet. The average maturity of our debt is much
longer-term and a third of our debt is now not CPI linked, diversifying our
risk. I am very gratified by the faith the investment community has in our
activities and potential. It positions us for continued long-term growth with
an increased ability to invest in the areas that we can provide most value
and garner the highest return on investment. Our leading portfolio of assets,
focused mainly on the energy and infrastructure sector, paired with our
strong financial standing, enables us to continue to build on our current
success over the coming quarters."
Mr. Asaf Bartfeld, continued, "As we move into 2010, we have many reasons
for optimism; in our energy sector, the commercialization of natural gas from
Tamar is drawing ever closer, and we are very excited with its potential
especially following the increased Gross Mean Resource estimate received at
the beginning of the quarter. Furthermore our existing producing gas
reservoir, Yam Tethys, had its strongest quarter in terms of net income in
its history. In addition, I am proud of the strong increase in market share
in Israel that our automotive business has achieved in the past year reaching
28% as well as the strong improvement in the performance of our financial
service assets. Finally, the expected closing of the sale of the majority of
our holdings in the HOT cable company at a premium and the resulting
additional cash flow of NIS 400 million proves that by our continued focus on
our core businesses and the continued creation of value, we expect to remain
successful, sharing the rewards with our shareholders."
Main Business Highlights
Contribution of Principal Operations to Net Income* (NIS millions)
FY Q1-Q3 Q1-Q3 Q3 Q3
2008 2008 2009 2008 2009
US Fuel Sector Operations 1 73 81 27 (14)
Israeli Fuel Sector Operations 62 85 70 31 9
Delek Europe 44 63 42 10 (2)
Restructuring expenses at Delek Europe (81) - - - -
Oil and Gas Exploration 65 59 20 40 52
Oil Exploration Expenses (74) (46) - (7) -
Automotive Operations 288 300 172 110 65
Insurance and Finance Operations (482) (144) 96 (167) 13
Capital Gains & Others (365) (321) (36) (228) (63)
Net Income (loss) excluding the Real (542) 69 445 (184) 60
Estate Activities
Real Estate activities (1,267) (440) (5) (428) -
Net income (loss) attributed to the (1,809) (371) 440 (612) 60
Group's shareholders
* Parts of the above table has been extracted from Delek Group's Third
Quarter 2009 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. At the beginning
of the third quarter, the partners in the drilling at the Tamar field
received a third party reserve report, showing the amount of 2P (proved and
probably) reserves of natural gas to be as high as approximately 7.7 TCF (or
approximately 218 BCM) at the Tamar Field. Delek Group has approximately 16%
of indirect rights to the Tamar well.
Oil and gas exploration activities contributed NIS 325 million in revenue
for the first nine months of 2009, compared with revenue of NIS 351 million
in the same period in 2008. Oil and gas exploration activities contributed
NIS 152 million in revenue for the third quarter of 2009, compared with
revenue of NIS 141 million in the same period in 2008.
Net income for the first nine months of 2009 was NIS 14 million, as
compared to net income of NIS 13 million in the same period last year. Net
income for the third quarter of 2009 was NIS 51 million, as compared to net
income of NIS 33 million in the same period last year. The improvement in the
third quarter financial results, was due to increased revenues from sales of
natural gas to the Israeli Electric Corporation (hereinafter: "IEC") due to
the new pricing and conditions, as contracted with the IEC from July 1st,
2009.
Delek USA (NYSE: DK; Delek Group holds 74% end-Q3 2009): Revenue in the
first nine months of 2009 was NIS 7.2 billion, compared with NIS 14.5 in the
same period of last year. Revenue in the third quarter of 2009 was NIS 3.2
billion, compared with NIS 5.1 in the same period of last year. Net income in
the first nine months of 2009 amounted to NIS 113 million compared with a net
income of NIS 103 million in the same period in 2008. Net loss in the third
quarter of 2009 amounted to NIS 21 million compared with a net income of NIS
41 million in the same period in 2008.
In the Company's refining segment, third quarter results were adversely
impacted by a significant decline in the 5-3-2 Gulf Coast crack spread in the
period. Within the retail segment, same-store sales trends signalled
improving business conditions in the Company's core South-Eastern markets
during the third quarter, as both fuel gallons sold and merchandise sales
increased above levels reported in the third quarter 2008. The results
throughout 2009 benefited from the receipt of gross insurance proceeds mostly
as a result of business interruption whilst the refinery was shut due to a
fire which occurred at the end of 2008. In May 2009, Delek US completed the
rebuilding of the unit damaged in the fire and the refinery resumed
operation. The discretionary upgrades and capital improvements made in
connection with the rebuild process, position the company to take advantage
of a more flexible crude slate, as refining economics allow.
Delek - the Israel Fuel Company Ltd. (TASE: DLKIS.TA; Delek Group holds
77.4% end-Q2 2009): Revenue in the first nine months of 2009 was NIS 3.1
billion, compared with NIS 4.9 in the same period of last year. Revenue in
the third quarter of 2009 was NIS 1.2 billion, compared with NIS 1.9 in the
same period of last year. Net income in the first nine months of 2009
amounted to NIS 84 million compared with a net income of NIS 102 million in
the same period in 2008. Net income in the third quarter of 2009 amounted to
NIS 7 million compared with a net income of NIS 33 million in the same period
in 2008.
The lower revenues levels in the quarter were primarily as a result of
the lower average gasoline prices as well as lower sales in the direct
marketing sector due to the economic slowdown compared with the same period
last year. In addition, there was an impact on revenues due to a reduction in
exposure to the direct marketing sector through a more selective and careful
approach. However, it should be noted that this effect was somewhat
compensated by an increase in sales at convenience stores as well as
increased sales in gasoline for commercial enterprises.
Delek Europe. Revenues in the first nine months of 2009 amounted to
EUR1.4 billion, compared with EUR2.1 billion in the same period last year.
Revenues in the third quarter of 2009 amounted to EUR492 million, compared
with EUR729 million in the same period last year. The lower revenue level was
primarily due to the lower average price of gasoline in the period compared
with last year.
During the first nine months of 2009, Delek Europe recorded a profit of
EUR8 million, compared with a net profit of EUR12 million in the same period
last year. During the third quarter of 2009, Delek Europe recorded breakeven
results, compared with a net profit of EUR2 million in the same period last
year.
Automotive Operations
Delek Automotive Systems Ltd. (TASE: DLEA.TA; Delek Group holds 55%
end-Q3 2009): The company increased its market share to 28% of the Israeli
car market in third quarter of 2009, compared with 23% in the third quarter
of last year. The company also began successfully selling the new popular
Mazda-3 model car in July of this quarter.
The company's revenues totalled NIS 3.4 billion in the first 9 months of
2009, compared with NIS 4.2 billion in the same period of last year, the
decreasing stemming from the general economic slowdown.
However, the company's revenues increased to NIS 1.5 billion in the third
quarter of 2009 compared with 1.4 billion in the same period of last year.
The increase was driven by a growth in unit sales, due to the increased
market share which Delek Automotive enjoyed in the third quarter. The company
sold 13,481 units in the quarter (out of a total of 46 thousand cars sold in
Israel) compared with 12,234 (out of a total of 51 thousand cars sold in
Israel) in the same period last year.
Net income at Delek Automotive in the first nine months of 2009 reached
NIS 305 million compared to a net income of NIS 525 million shekels in the
same period last year. The decrease in net income is primarily due to the
lower number of units sold. Net income at Delek Automotive in the third
quarter of 2009 reached NIS 112 million compared to a net income of NIS 193
million shekels in the same period last year. The decrease in third quarter
net income was primarily due to fluctuations in currency exchange rates.
Insurance and Financial Services
The activities of this segment are primarily conducted through two
insurance companies; Israeli insurance company, Phoenix Holdings Ltd. (TASE:
PHOE.TA), and general US insurer, Republic Companies, Inc. that is a
indirectly wholly owned subsidiary.
The insurance and financial services sector contributed NIS 96 million to
the Group's net income in the first nine months of 2009, compared to a loss
contribution of NIS 44 million in the same period last year. In the third
quarter, the contribution was NIS 13 million, compared to a net loss NIS 167
million in the same period of last year. The improved results were due to the
significant improvement in the capital market environment in Israel since the
beginning of 2009.
Dividend Distribution
On November 29, 2009, the Board of Directors of Delek Group declared a
cash dividend distribution for the third quarter of 2009 in the amount of
approximately NIS 33 million (approximately NIS 2.91 per share) to the
shareholders on record as of December 21, 2009. The ex-date is December 22,
2009 and the dividend will be paid on January 5, 2010.
Conference Call Details
The Company will be hosting a conference call in English on Tuesday,
December 1, 2009 at 10:00am ET, 3:00pm UK time, 5:00pm Israel time. On the
call, CEO Asaf Bartfeld, CFO Barak Mashraki and Head of 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: +1-800-994-4498, UK: +44(0)-800-917-4613, Israel:
+972-03-918-0666.
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 48 billion Israeli shekel in 2008.
For more information on Delek Group please visit
http://www.delek-group.com
Contact
Dalia Black
Head of Investor Relations
Delek Group
Tel: +972-9-863-8444
Email: black_d@delek.co.il
Kenny Green / Ehud Helft
International Investor Relations
GK Investor Relations
Tel: (US)+1-646-201-9246
E-mail: delek-group-ir@gkir.com
SOURCE Delek Group Ltd
Source: PR Newswire
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