TEL AVIV, Israel, August 30 /PRNewswire-FirstCall/ -- - Second Quarter Net Income up 375% Year-Over-Year to NIS 223 Million
Delek Group Ltd. (hereinafter: "Delek Group" or "The Group") announced today reported its results for the three and six month periods ended June 30, 2009. The full financial statements are available on Delek Group's website at: http://www.delek-group.com/.
First Six Months 2009 Highlights - Net income up 42% to NIS 380 million; Second quarter net income contributed substantial NIS 223 million - Gas reserves of natural gas to be as high as approximately 7.7 TCF at the Tamar Field (2P estimation) - Declared additional NIS 105 million dividend for the second quarter; NIS 177 million in cash for the six months of 2009 (excluding Delek Real Estate) First Six Months 2009 Results
Group revenues for the first six months of 2009 totaled NIS 20 billion, compared with NIS 26.3 billion in the same period in 2008. Group revenues in the second quarter of 2009 amounted to NIS 10.8 billion, compared with NIS 14.2 billion in the second quarter of 2008. The decrease in revenues was primarily as a result of lower gasoline sales as well as the lower price of oil, lower revenues from the US refinery which only restarted operations towards the end of the second quarter, as well as lower automotive revenues in Israel.
Net income for the first six months increased 42% reaching NIS 380 million, compared with the NIS 241 million in the same period in 2008. Net income in the second quarter increased substantially by 375% to NIS 223 million, compared with NIS 47 million reported in the second quarter of 2008. The substantial increase in the quarter and six month net income was due to the improved performance in a number of the Group's sectors, in particular the infrastructure sector.
Group total assets as of June 30, 2009, amounted to NIS 76.8 billion, compared with NIS 76.7 billion as of December 31, 2008.
Mr. Gabriel Last, Chairman of Delek Group commented, "As we complete the first half of 2009, we have returned to a path of growth and profitability. Our quick recovery is both a culmination of our ability to navigate the highly turbulent environment with a well balanced portfolio, as well as testament to the capabilities of our experienced managers throughout the Group. As a Company, we believe that we have emerged stronger, leaner and more focused, with a much improved balance sheet, poised for continued long-term growth. We believe that our sound and balanced portfolio of assets, focused mainly around the energy and infrastructure sector, paired with our strong financial standing, will enable us to continue to perform in the coming quarters."
Mr. Asaf Bartfeld, CEO of Delek Group, commented, "On the financial front, we successfully raised NIS 300 million in bonds, refinanced part of our debt and increased our credit facilities by additional NIS 150m. The half a billion shekel increase in our financial resources is testimony to the faith the investment community has in the Group's activities and its strength in a tough macro environment. We now have approximately NIS 1 billion available for supporting all our needs and pursuing opportunities. We are now shifting up a gear and moving our focus to the future where we do indeed see opportunities. In particular, we are looking to continue to build on our achievements, where we can add significant value and take advantage of the inherent synergies within our group. We continue to focus our efforts on building our portfolio of leading businesses, with the overarching aim of creating value and sharing the rewards with all our shareholders."
Main Business Highlights Contribution of Principal Operations to Net Income* (NIS millions) FY H1 H1 Q2 Q2 2008 2008 2009 2008 2009 US Fuel Sector Operations 1 46 95 45 97 Israeli Fuel Sector Operations 62 54 61 31 29 Delek Europe 44 53 44 42 41 Restructuring expenses at Delek (81) - - - - Europe Oil and Gas Exploration 65 19 (32) (14) 2 Oil Exploration Expenses (74) (39) - (13) - Automotive Operations 288 190 107 105 53 Insurance and Finance Operations (563) (39) 9 (76) (40) Increase (decrease) in the value of (195) (33) 21 (20) 16 financial assets Capital Gains & Others (89) 2 80 (11) 25 Net Income (loss) excluding the Real (542) 253 385 89 223 Estate Activities Real Estate activities (1,267) (12) (5) (42) - Net income (loss) attributed to the (1,809) 241 380 47 223 Group's shareholders
* Parts of the above table has been extracted from Delek Group's Second 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
Delek USA (NYSE: DK; Delek Group holds 73% end-Q2 2009): Revenue in the first half of 2009 was NIS 4.0 billion, compared with NIS 9.4 in the same period of last year. Net income in the first half of 2009, excluding extraordinary items, amounted to NIS 134 million compared with a net income of NIS 63 million in the same period in 2008. The results in the second quarter benefited from the receipt of $57.6 million in gross insurance proceeds mostly as a result of business interruption whilst the refinery was shut, in addition to a significant decline in commodity prices. In May 2009, Delek US completed the rebuilding of the unit damaged in the fire at the Tyler refinery in November 2008 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 79% end-Q2 2009): Revenue in the first half of 2009 amounted to NIS 1.9 billion, compared with NIS 3 billion in the same period last year. Net income in the first half of 2009 amounted to NIS 75 million, compared with a net income of NIS 65 million in the first half of 2008.
The lower revenues levels in the quarter was 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. However, this effect was somewhat compensated by an increase in same store sales as well as an increase in the number of stores compared with the same period last year. The improvement in net income was primarily due to lower financial expenses in the quarter due to the smaller increase in the consumer price index in the period compared with last year.
Delek Europe. Revenues in the first half of 2009 amounted to EUR942 million, compared with EUR1.4 billion in the same period last year. During the first half of 2009, Delek Europe recorded a profit of EUR8 million, compared with a net profit of EUR10 million in the previous quarter. The lower revenue level was primarily due to the lower average price of gasoline in the period compared with last year. The Oil and Gas Exploration, and Gas Production sector. The partners in the drilling at the Tamar field recently 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. The Delek Group has approximately 15.6% of the rights to the drilling.
Oil and gas exploration activities contributed NIS 186 million in revenue for the first half of 2009, compared with revenue of NIS 210 million in the first half of 2008. The decrease was primarily due to lower sales of natural gas in the period, selling 1.3 BCM compared with 1.6 BCM in the same period last year. This was primarily as a result of lower demand from the Israeli Electricity Corporation, resulting from lower public electricity consumption following temperate weather conditions in Israel. Net loss for the first half of 2009 was NIS 32 million, as compared to net loss of NIS 20 million in the same period last year.
Automotive Operations
Delek Automotive Systems Ltd. (TASE: DLEA.TA; Delek Group holds 55% end-Q2 2009): The company maintained its market share of 22% in the Israeli car market by the exclusive import and marketing of the Mazda and Ford brands. Net income at Delek Automotive in the first half of 2009 reached NIS 192 million compared to a net income of NIS 332 million shekels in the first half of last year. The company's revenues totalled NIS 2 billion, compared with NIS 2.9 billion in the first half of last year. The company's sales of cars reached 8,486 units in the quarter.
Insurance and Financial Services
The activities of this segment are primarily conducted through Delek Capital, as well as two insurance companies; Israeli insurance company, Phoenix Holdings Ltd. , and general US insurer, Republic Companies, Inc. held through wholly-owned Delek Finance US Inc.
The insurance and financial services sector contributed NIS 9 million to the Group's net income in the first half of 2009, compared to a loss contribution of NIS 39 million in the first half of 2008. The improved results were due to the significant improvement in the capital market environment in Israel beginning in 2009.
Dividend Distribution
On August 30, 2009, the Board of Directors of Delek Group declared a cash dividend distribution for the second quarter of 2009 in the amount of approximately NIS 105 million (NIS 9.25 per share) to the shareholders on record as of September 9, 2009. The ex-date is September 10, 2009 and the dividend will be paid on September 24, 2009.
Conference Call Details
The Company will be hosting a conference call in English on Monday, August 31st, 2009 at 8:30am ET, 1:30pm UK time, 3:30pm 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: 1-888-407-2553, UK: 0-800-917-9141, Israel: 03-918-0610.
About The Delek Group
The Delek Group is one of the leading, most prominent and dynamic investment groups in Israel. With investments on four continents, the Group is focused on investing in three main sectors. These are energy & infrastructure; financial services; and automotives.
Contact Dalia Black Head of Investor Relations Delek Group Tel: +972-9-863-8444 Email: black_d@delek.co.il Kenny Green International Investor Relations GK Investor Relations Tel: (US) +1-646-201-9246 E-mail: info@gkir.com
Delek Group Lts
CONTACT: Contact: Dalia Black, Head of Investor Relations, Delek Group,
Tel: +972-9-863-8444, Email: black_d@delek.co.il. Kenny Green, International
Investor Relations, GK Investor Relations, Tel: (US) +1-646-201-9246, E-mail:
info@gkir.com
