Delek Group Announces Consolidated Results for the Fourth Quarter and Full Year of 2009
Ltd. (TASE: DLEKG , OTC: DGRLY) (hereinafter: “Delek Group” or “The Group”)
announced today its results for the three and twelve month period ending
on Delek Group’s website
Full Year 2009 Highlights
- Significant natural gas reserves discovered in the Tamar
field in the process of being commercialised;
- Return to profitability in all sectors with particularly
strong improvement in the financial sector;
- Full year net income reached NIS 869 million; fourth quarter
net income of NIS 424 million;
- Successfully raised NIS1.5bn in new capital in 2009
significantly strengthening the balance sheet;
- Delek Group distributed a total of NIS 460 million in
dividends for the year;
Group revenues for the full year 2009 were
decrease compared with
quarter of 2009 increased 58% reaching
billion
as a result of lower gasoline sales in
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. This
was partially offset by an improvement in income from investments in the
insurance and finance sectors.
Net income for the full year 2009 totaled
improvement compared with a net loss of
for the fourth quarter of 2009 totaled
improvement compared with a net loss of
quarter of 2008 (these results do not include the real estate sector that was
distributed in dividend in kind in
an improvement across all sectors, in particular the financial and insurance
sector, as well as a number of significant capital gains.
Capital gains at the Group level amounted to
year 2009, generated mainly from the sale of the majority of the Company’s
holdings in HOT Communications and the sale of shares in Delek Energy,
amongst other equity sales.
Group total assets as of
compared with
Group successfully raised and restructured a total of
debt, all of which is long-term.
Mr.
midst of a global crisis, and ended as one of the most successful years in
our history. The strong results that we reported today, are as a direct
consequence of the correct strategic actions that were taken by the
management of Delek Group and its subsidiaries throughout the past year to
navigate the downturn. The Group and its subsidiaries have strongly improved
profitability across the board and all sectors emerged 2009 in profit. We
have continued to strengthen our net asset value, and can demonstrate
significant solidity of our balance sheet strength across the Group and all
its subsidiaries. We have emerged from the challenges of the last year in a
very strong position, with the strength to take advantage of new
opportunities in the market. Today, after the recent capital gains as well as
the new capital raised in the past few months, the Company at the holding
level has approximately
demonstrates the financial strength of Delek Group and its ability to exploit
new business opportunities, if and when they emerge.”
Mr.
intend to maintain our focus on the Group’s core businesses of energy and
infrastructure, automotive and finance – all of which remain the engines of
future growth of the Group. In addition, we look forward to the
commercialisation of the Tamar and Dalit natural gas sites, which I believe
can change the face of the Israeli economy. Together with our partners Noble
Energy we are in the process of exploring additional acreage surrounding
Tamar and we should receive results of the seismic studies around the middle
of 2010.”
“In the Infrastructure sector, the subsidiary IDE that is focused on
water desalination continues to win significant tenders including at the
Soreq facility in
facility in
strengthening our market position in the retail fuel market in both the U.S.
and
financial sector has returned to profit, and in the Automotive sector, we
will make every effort to continue to lead the market for coming years, just
as we have done for the past 14 consecutive years.”
Main Business Highlights
Contribution of Principal Operations to Net Income* (NIS millions)
Q1 2009 Q2 Q3 Q4 2009 2008
2009 2009
2009
US Fuel Sector Operations (2) 97 (14) (54) 27 1
Israeli Fuel Sector Operations 32 29 9 12 82 62
Delek Europe 7 41 (2) 13 59 44
Restructuring expenses at Delek (4) - - (12) (16) (81)
Europe
Oil and Gas Exploration (34) 2 52 2 23 65
Oil Exploration Expenses - - - - - (74)
Automotive Operations 54 53 65 78 250 288
Insurance and Finance Operations 82 6 23 70 181 (467)
Capital Gains & Others 27 (5) (73) 314 263 (380)
Net Income (loss) excl. Real Estate 162 223 60 424 869 (542)
Activities
Real Estate activities (5) - - - (5) (1,267)
Net income (loss) attributed Group's 157 223 60 424 864 (1,809)
shareholders
* Parts of the above table have been extracted from Delek Group’s Full
Year and Fourth 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. In
partners in the drilling at the Tamar field received a third party reserve
report, showing the amount of 2P (proved and probable) reserves of natural
gas to be as high as 7.7 TCF (218 BCM) at the Tamar Field. Tamar’s partners
have already signed agreements totalling over
gas following commercialisation, which is expected in 2012 and remains on
track. The Company is also continuing further exploration activity in the
area and expects results of the seismic studies in the middle of 2010.
Net income from the sector for 2009 was
net loss of
was
period last year.
A reduced volume of gas was sold in
compared with 2008. This was due to reduced public demand for electricity due
to more temperate weather conditions in the first half of the year, a general
decrease in economic activity, as well as increased sales by the alternative
gas supplier EMG, to the IEC. Despite the decline in gas volumes sold, there
was no significant change in net income due to the increased price of gas and
currency exchange rate impacts.
Delek US (NYSE: DK; Delek Group holds 74% end-2009): Net income in 2009
was
contribution from the refining and marketing sectors was
2009 compared with
contribution from convenience stores amounted to a loss of
compared with
In the Company’s refining segment, Delek US’ results were affected by
weak Gulf Coast refining economics, which is evidenced by a significant
decline in the benchmark Gulf Coast 5-3-2 crack spread. The average 5-3-2
crack spread was
2008. In addition, the direct operating expenses per barrel increased in 2009
by approximately
228 days compared to 324 days in 2008. During 2009, the Company’s Tyler
refinery was offline between
facility. However, the Company benefited from the receipt of gross insurance
proceeds mostly as a result of business interruption insurance whilst the
Tyler refinery was shut down. The Company anticipates receiving additional
insurance proceeds during 2010. In
rebuilding of the unit damaged in the fire, and the refinery resumed
operation. Delek US also initiated discretionary and maintenance-related
capital projects to enhance the safety, reliability and efficiency of the
Tyler refinery throughout the year.
In the retail segment, there was weak demand for fuel and merchandise
during the first half of 2009 due to the general economic weakness. However,
business improved considerably during the second half of the year, signalling
a broad-based stabilization in the Company’s core Southeastern U.S. markets.
Delek – the Israel Fuel Company Ltd. (TASE: DLKIS.TA; Delek Group holds
77% end-2009): Net income in 2009 amounted to
net income of
fourth quarter of 2009 amounted to
Results were affected by the lower average gasoline prices throughout
most of 2009. However, this was somewhat compensated by increased margins due
to the transfer of ownership of a number of gas stations to the direct
control and operation of Delek Israel. In addition, there was an increase in
sales of gasoline for commercial enterprises, an increase in sales at
convenience stores due to the opening of new stores as well as an increase in
same store sales.
Delek Europe. Net income in 2009 was
loss of
reorganisation expense of
Europe made an offer to BP for the acquisition of its retail fuels and
convenience business in
interests in 3 terminals. Delek Europe has offered to pay
subject to working capital and other adjustments at completion.
IDE (water desalination, 50% indirectly held by Delek Group). IDE
achieved record net income in 2009 at
in 2008. IDE issued a dividend for the first time, amounting to
million
for an Asian customer and signed a contract to establish a desalination plant
in July for an industrial client in
to extend its desalination project in Hadera, (
additional plants in
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
loss of
last year.
The results were substantially improved over those of last year due to
the significant improvement in the capital market environment globally and in
Automotive Operations
Delek Automotive Systems Ltd. (TASE: DLEA.TA; Delek Group holds 55%
end-Q4 2009): Delek Automotive is the exclusive distributor of Mazda and Ford
in
compared to a net income of
Automotive in the fourth quarter of 2009 reached
a net loss of
decrease was primarily due to fluctuations in currency exchange rates.
The company increased its market share to 25% of the Israeli car market
in 2009, compared with 22% last year, and sold a record 44,174 cars during
the year, compared with 43,171 in 2008. The company began successfully
selling the new popular Mazda-3 model car in
Dividend Distribution
On
dividend distribution for the fourth quarter of 2009 the amount of
approximately
shareholders on record as of
the dividend will be paid on
The total amount of dividend declared for the year 2009 amounted to
460 million
shares of Delek Real Estate (TASE: DLKR) held by the Company until
2009
approximately 8.8 Delek Real Estate shares for one Delek Group share.
Conference Call Details
The Company will be hosting a conference call in English on
26, 2010
CEO
Black
your questions.
To participate, please call one of the following teleconferencing numbers:
US: 1-888-407-2553, UK: 0-808-051-8913 and
About The Delek Group
Delek Group is the leading energy & infrastructure group based out of
and power plants globally. In addition, Delek is the number one importer &
distributor of vehicles in
US. Earlier this year, Delek Group, through its subsidiaries, discovered
significant quantities of high quality natural gas off the coast of
Delek Group sales reached 43 billion Israeli shekels in 2009.
For more information on Delek Group please visit
http://www.delek-group.com.
Delek Group Income Statement (NIS Millions)
1-3/09 4-6/09 7-9/09 10-12/09 2009 2008 2007
Revenue 9,118 10,765 11,919 11,645 43,447 46,240 39,118
Cost of revenue 7,482 9,158 10,245 10,147 37,032 40,549 32,929
Gross profit 1,636 1,607 1,674 1,498 6,415 5,691 6,189
Sales, marketing and
operating expenses -
gas stations 855 899 881 791 3,426 3,259 2,451
General and
administrative
expenses 422 394 403 549 1,768 1,476 1,067
Other income
(expenses), net 68 199 (28) 72 311 40 (35)
Profit from operating
activities 427 513 362 230 1,532 996 2,636
Financing income, net 174 124 159 152 609 340 198
Financial expenses,
net 308 340 531 270 1,449 1,798 1,068
Profit (loss) after
financing 293 297 (10) 112 692 (462) 1,766
Profit from
realization of
investments in
associates and others,
net - 31 4 483 518 69 367
Group's equity in
profits (losses) of
associates and
partnerships, net 65 66 47 13 191 (12) 174
Profit (loss) before 358 394 41 612 1,405 (405) 2,307
income tax
Income tax (tax 100 99 (86) 102 215 (37) 607
benefit)
Profit (loss) from
continuing operations 258 295 127 506 1,186 (368) 1,700
Profit (loss) from
discontinued
operations 17 - - - 17 (1,945) 536
Profit (loss) 275 295 127 506 1,203 (2,313) 2,236
Attributable to:
Company shareholders 157 223 60 424 864 (1,809) 1,297
Non-controlling 118 72 67 82 339 (504) 939
interest
275 295 127 506 1,203 (2,313) 2,236
The notes are an integral part of the financial statement and can be
found at 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