RAMAT GAN, Israel, Aug. 22 /PRNewswire-FirstCall/ -- Shikun & Binui Ltd. ("Shikun & Binui" or the "Company"), a member of the Arison Group and Israel's leading infrastructure and real estate company, announced yesterday its results for the second quarter 2010, ended June 30th, 2010.
"The Group is continuing to expand the activities of its key businesses, particularly in infrastructure and construction, both in Israel and abroad. In addition, the Group is also looking to make significant investments in the area of renewable energy and water," commented Mr. Ofer Kotler, Chief Executive Officer of Shikun & Binui.
Main Events of the Second Quarter and Subsequent to it: -- The company increased its stake in Derech Eretz, the concessioner of road 6, for an investment of NIS 150 million, following this investment the company will hold 50% of Derech Eretz. The acquisition will be financed from internal resources. -- The Group's orders backlog in the construction and infrastructure segment totaled NIS 9.4 billion as of June 30, 2010, an increase of 11% compared with March 31, 2010 and an increase of 21% compared with December 31, 2009. -- In the second quarter of the year, Shikun & Binui Real Estate sold 379 units totaling NIS 523 million, and since the beginning of the year it sold 619 units for total of NIS 811 million. In August, Shikun & Binui Real Estate sold 50% of its rights in property in the city of Ashkelon at a pre-tax gain of NIS 35 million (which will not be recognized as part of the Q2 financial statements). -- The subsidiary, Solel Boneh Israel, began work on the P.F.I project for the Israeli National Roads Company for the rehabilitation, operation and maintenance of roads located in the North of Israel for the amount of NIS 1.7 billion. The closing of the financing of the project occurred at the end of June 2010. -- Shikun & Binui SBI Infrastructures was awarded a tender to pave a highway in Nigeria in the amount of $290 million. The rehabilitation and paving of this project is expected to last 4 years. Second Quarter 2010 Results
Revenues from Projects and Sales totaled NIS 1.18 billion this quarter, an increase of 5.2% compared with the second quarter of 2009. International revenues from the Construction & Infrastructure segment totaled NIS 666 million, increasing by 10.4% compared with corresponding quarter last year. Fluctuations in the exchange rate between the shekel and the dollar impacted SBI revenues. In the second quarter of 2009, the average exchange rate was NIS 4.07 per U.S. dollar while this quarter the average was NIS 3.78. The effect of this difference resulted in a decrease in the Israeli shekel reported revenues of about NIS 56 million, compared to the same quarter last year. Israeli revenues from the Construction & Infrastructure segment totaled NIS 365 million, increasing 4.9% compared with the corresponding quarter last year. Revenues from the Real Estate Development segment totaled NIS 146 million compared with NIS 169 million in the corresponding quarter last year, with the decrease stemming mainly from the timing of recognition of income from the sale of apartments.
Gross profit totaled NIS 237 million (20% of revenues), increasing 8% when compared with Q2 of 2009 (19.5% of revenues).
General and administrative expenses totaled NIS 73 million (representing 6.2% of revenues), increasing 25.1% when compared with Q2 of 2009 (5.2% of revenues). The increase is attributed to organizational changes supporting the geographical expansion of SBI Infrastructures entry into a new international market, as part of its strategic plan. Also contributing to the rise is the increased expenditure growth in initiating renewable energy projects as well as an advertising campaign.
Operating income totaled NIS 154 million (13% of revenues), compared with NIS 163 million (14.5% of revenues) in Q2 2009.
Financing costs net totaled NIS 47.5 million, decreasing 46% when compared with the second quarter of 2009. The decrease in financing expenses is attributed to a lower increase in the CPI index compared to Q2/2009, which affected the long-term credit costs, and due to a decrease of the group's financing costs in foreign currencies.
Company's share in the results of investee companies accounted for by the equity method totaled a loss of NIS 5 million, compared with an income of NIS 1.4 million in Q2 2009.
Net income amounted to NIS 65.5 million, increasing 59% when compared with Q2 2009.
Cash flow from operating activities totaled NIS 219 million.
Shareholders' equity totaled NIS 609 million, compared with NIS 508 million on December 31st, 2009. The increase is mainly attributed to first half profit in the amount of NIS 172 million as well as translation adjustments which amounted to NIS 34 million, which were partially offset by a dividend distribution of NIS 108 million.
Total assets amounted to NIS 7.6 billion. Key Highlights in the First Half 2010
Revenues from Projects and Sales for the first half of 2010 totaled NIS 2.27 billion, compared with NIS 2.34 billion in the same period of 2009. The decrease is mainly attributed to the Real Estate Development segment in Israel, which saw a higher recognition of revenue in the first half of last year. Likewise, the completion of Section 18 of the Highway 6 also led to decrease in revenue in the same period of 2009. International revenues from the Construction & Infrastructure segment increased in the first half of 2010 by about 6.1%.
Gross profit totaled NIS 454 million (20% of revenues), compared with NIS 483 million (20% of revenues) in the same period last year. The decrease is mainly attributed to projects that were finished as well as the approval of an exceptional claim in the Construction & Infrastructure segment abroad in the corresponding period last year.
General and administrative expenses totaled NIS 145 million (representing 6.4% of revenues), increasing 17% when compared with the corresponding period last year (5.3% of revenues). The increase is attributed to adjusting organizational processes with expanding activities, in particular, SBI Infrastructures entry to a new international market, as part of the strategic plan. Also contributing to the rise, was the increased expenditure growth in initiating renewable energy projects as well as an advertising campaign.
Operating income totaled NIS 290 million (12.8% of revenues), compared with NIS 355 million (15.2% of revenues) in the same period last year.
Financing costs net decreased by 52% when compared with the corresponding period last year and are attributed to a lower increase in the CPI index, which affected the long-term credit costs, and due to a decrease of the group's operational costs in foreign currencies.
Company's share in the results of investee companies accounted for by the equity method totaled NIS 9 million, compared with a loss of NIS 23 million in the corresponding period last year, which is attributed to the value of the state options for "Derech Eretz" Results (Highway 6).
Net income amounted to NIS 172 million, increasing 34.2% when compared with the corresponding period last year.
Cash flow from operating activities totaled NIS 271 million, increasing 81% when compared with the corresponding period last year and is attributed predominantly to the ongoing profit net depreciation costs and change in working capital.
Working capital totaled NIS 541 million, compared with NIS 485 million in the corresponding quarter last year.
The Company ended the quarter with cash balances and equivalents, totaling NIS 1.147 billion and an unutilized credit facility amounting to NIS 725 million.
Doron Blachar, the Group's CFO said: "The Group's shareholder's equity has steadily grown, resulting in an improvement in the financial resilience of the Company, which serves as a testament to the company's current operations.
The financial strength of the company enabled it to finance from its own resources the acquisition of 12/5% of Derech Eretz and will continue to support the company growth strategy."
About Shikun & Binui
Shikun & Binui, a member of the Arison Group, is the leading infrastructure and real estate company in Israel. The Group's subsidiaries have been operating since 1924. The Group's companies have gained extensive experience in complex construction and infrastructure projects in Israel and abroad. Shikun & Binui Group has proven achievements in building, residential neighborhoods, commercial and industrial buildings, as well as large-scale transportation, infrastructure and ecological projects, water purification and desalination and development of international projects. In addition, Shikun & Binui also operates in the initiating, planning, construction and operation of projects in renewable energy. Shikun & Binui is a leading, multi-faceted and socially responsible international group that produces balance between the business, social and environmental accomplishment. The group places emphasis on honesty, transparency, innovation, and excellence. The group has accepted upon itself a leadership role in creation of a sustainable and progressive life environment.
The above noted in this release includes forward-looking statements based on Company data, as well as Company plans and estimations based on this data. The activity, results and other data may be substantially different in reality given uncertainty and various risks, including those discussed under risk factors in the Company's financial statements and Director's reports.
Company Contact: Investor Relations Contacts: Doron Blachar, CFO Ehud Helft / Porat Saar Shikun & Binui CCG Investor Relations Tel: +972 3 630 1518 Tel: +1 646 233 2161/ +972 52 776 3687 email: info@ccgisrael.com Shikun & Binui Ltd. Condensed Consolidated Interim Statement of Financial Position as at June 30 June 30 December 31 2010 2009 2009 ---- ---- ---- (Unaudited) (Audited) ----------- --------- NIS NIS NIS thousands thousands thousands ---------- --------- ---------- Assets Cash and cash equivalents 1,147,289 1,100,421 1,180,517 Bank deposits 193,884 93,821 170,226 Short-term loans and investments 68,925 56,938 63,915 Short-term loans to investee companies 169,527 343,194 331,304 Trade receivables - accrued income 786,369 961,476 872,670 Inventory of buildings held for sale 1,210,017 872,598 1,021,668 Receivables and debit balances 218,810 (1) 188,111 (1) 166,744 Other investments, including derivatives 35,764 2,807 2,619 Current tax assets 84,955 75,494 72,107 Inventory 195,995 176,834 199,234 Assets classified as held for sale 26,678 3,962 8,065 ------ ----- ----- Total current assets 4,138,213 3,875,656 4,089,069 --------- --------- --------- Receivables in respect of concession agreements 76,804 26,968 68,109 Non-current inventory of land (freehold) 444,887 487,445 478,425 Non-current inventory of land (leasehold) 173,573 245,743 198,620 Investment property, net 299,827 (1) 323,871 317,152(1) Land rights 17,023 16,508 16,975 Long-term prepaid expenses 3,287 (1) 6,988 2,868(1) Receivables, loans and deposits 377,270 477,404 406,653 Investments in equity-accounted investees 155,631 139,293 138,572 Loans to investee companies 744,157 618,376 618,270 Deferred tax assets 109,336 132,856 116,498 Property, plant and equipment, net 937,626 (1) 876,700 (1) 820,789 Intangible assets, net 109,673 95,416 101,459 ------- ------ ------- Total non-current assets 3,449,094 3,447,568 3,284,390 --------- --------- --------- Total assets 7,587,307 7,323,224 7,373,459 ========= ========= ========= (1) Retrospective implementation Shikun & Binui Ltd. Condensed Consolidated Interim Statement of Financial Position as at (cont'd) June 30 June 30 December 31 2010 2009 2009 ---- ---- ---- (Unaudited) (Audited) ----------- --------- NIS NIS NIS thousands thousands thousands ---------- --------- ---------- Liabilities Short-term credit from banks and others 722,719 1,245,299 879,586 Subcontractors and trade payables 683,804 625,028 683,040 Short-term employee benefits 32,715 28,447 35,982 Payables and credit balances including derivatives 311,436 256,482 289,917 Current tax liabilities 106,887 101,807 95,445 Provisions 380,697 332,014 303,631 Payables - customer work orders 609,845 692,630 750,958 Advances received from customers 743,129 414,190 565,072 Liabilities classified as held for sale 6,195 ----- Total current liabilities 3,597,427 3,695,897 3,603,631 --------- --------- --------- Liabilities to banks and others 1,223,306 1,190,760 1,129,821 Debentures 1,933,157 1,844,157 1,912,160 Employee benefits 144,505 132,909 140,703 Deferred tax liabilities 14,075 19,054 15,299 Provisions 23,841 26,514 24,654 Excess of accumulated losses over cost of investment and deferred credit balance in investee companies 42,242 37,870 39,056 ------ ------ ------ Total non-current liabilities 3,381,126 3,251,264 3,261,693 --------- --------- --------- Total liabilities 6,978,553 6,947,161 6,865,324 --------- --------- --------- Equity Total equity attributable to equity holders of the Company 447,088 370,268 351,003 Non-controlling interests 161,666 5,795 157,132 ------- ----- ------- Total equity 608,754 376,063 508,135 ------- ------- ------- Total liabilities and equity 7,587,307 7,323,224 7,373,459 ========= ========= ========= Shikun & Binui Ltd. Condensed Consolidated Interim Statement of Income For the six-month period For the three-month For the ended period ended year ended ------------------------- -------------------- ---------- June 30 June 30 June 30 June 30 December 31 2010 2009 2010 2009 2009 ---- ---- ---- ---- ---- (Unaudited) (Unaudited) (Audited) ----------- ----------- --------- NIS NIS NIS NIS NIS thousands thousands thousands thousands thousands ---------- ---------- ---------- ---------- ---------- Revenues from work performed and sales 2,270,358 2,338,506 1,182,191 1,124,435 4,453,729 Cost of work performed and sales 1,816,554 1,855,618 945,219 905,179 3,570,666 --------- --------- ------- ------- --------- Gross profit 453,804 482,888 236,972 219,256 883,063 Gain on sale of investment property 7,309 8,107 7,309 8,107 10,978 Selling and marketing expenses (11,924) (11,569) (6,614) (5,987) (25,147) Administrative and general expenses (144,959) (123,932) (72,733) (58,123) (268,704) Other operating income 916 2,623 200 1,201 135,565 Other operating expenses (15,531) (3,580) (11,234) (1,876) (28,690) ------- ------ ------- ------ ------- Operating profit 289,615 354,537 153,900 162,578 707,065 ------- ------- ------- ------- ------- Financing income 154,505 62,588 73,383 33,415 132,726 Financing expenses (214,987) (189,405) (120,905) (121,465) (393,437) -------- -------- -------- -------- -------- Net financing expenses (60,482) (126,817) (47,522) (88,050) (260,711) ------- -------- ------- ------- -------- Share of profit (losses) of equity accounted investees (net of tax) 8,633 (23,014) (4,787) 1,429 (66,981) ----- ------- ------ ----- ------- Profit before taxes on income 237,766 204,706 101,591 75,957 379,373 Taxes on income (65,680) (76,550) (36,059) (34,773) (147,232) ------- ------- ------- ------- -------- Net profit for the period 172,086 128,156 65,532 41,184 232,141 ------- ------- ------ ------ ------- Attributable to: Equity holders of the Company 163,867 129,881 60,790 41,527 237,337 Non- controlling interests 8,219 (1,725) 4,742 (343) (5,196) ----- ------ ----- ---- ------ 172,086 128,156 65,532 41,184 232,141 ======= ======= ====== ====== ======= Basic and diluted earnings per share (in NIS) 0.42 0.33 0.15 0.11 0.60 ==== ==== ==== ==== ==== Number of shares used in the computation of earnings per share (in thousands) 395,545 394,545 394,545 394,545 394,545 ======= ======= ======= ======= ======= Operating Segments For the six month period ended June 30, 2010 Real Infrastructures estate and Infrastructures Real development construction and estate outside outside of construction development of Israel in Israel in Israel Israel Consessions ------ --------- --------- ------ ----------- NIS thousands ------------- Total external revenues 1,282,307 615,348 305,346 3,402 - Inter- segment revenues - 56,157 4,244 - - --------- --------- ------- -------- ------- Total revenues 1,282,307 671,505 309,590 3,402 - --------- --------- ------- -------- ------- Segment profit (loss) before income tax 234,388 9,457 94,343 (24,267) 21,716 ========= ========= ========= ========= ========= For the six month period ended June 30, 2010 Renewable energy Water Other Adjustments Consolidated ------ ----- ------ ----------- ------------ NIS thousands ------------- Total external revenues 37,061 26,894 - - 2,270,358 Inter- segment revenues - - - (60,401) - --------- --------- ------- -------- ------- Total revenues 37,061 26,894 - (60,401) 2,270,358 ========= ========= ========= ========= ========= Segment profit (loss) before income tax (18,355) (8,622) (6,735) (64,159) 237,766 ========= ========= ========= ========= ========= For the six month period ended June 30, 2009 Real Infrastructures estate and Infrastructures Real development construction and estate outside outside of construction development of Israel in Israel in Israel Israel Consessions ------ --------- --------- ------ ----------- NIS thousands Total external revenues 1,208,385 651,911 421,600 3,926 - Inter- Segment revenues - 45,849 4,154 - - Total revenues 1,208,385 697,760 425,754 3,926 - Segment profit (loss) before income tax 219,552 10,144 89,570 (27,871) (16,183) (*)Restated as a result of splitting the environment segment into two operating segments For the six month period ended June 30, 2009 Renewable energy (*) Water(*) Other Adjustments Consolidated ------ ----- ------ ----------- ------------ NIS thousands Total External revenues 26,213 25,457 1,014 - 2,338,506 Inter-segment revenues - - - (50,003) - Total revenues 26,213 25,457 1,014 (50,003) 2,338,506 Segment profit (loss) before income tax (1,372) (1,221) (3,009) (64,904) 204,706 (*) Restated as a result of splitting the environment segment into two operating segments Operating Segments (cont'd) For the three month period ended June 30, 2010 Real Infrastructures estate and Infrastructures Real development construction and estate outside outside of construction development of Israel in Israel in Israel Israel Consessions ------ --------- --------- ------ ----------- NIS thousands Total External revenues 665,611 339,724 144,082 2,043 - Inter-segment revenues - 25,510 2,003 - - Total revenues 665,611 365,234 146,085 2,043 - Segment profit (loss) before income tax 120,220 8,612 52,555 (15,921) (1,851) For the three month period ended June 30, 2010 Renewable energy Water Other Adjustments Consolidated ------ ----- ------ ----------- ------------ NIS thousands Total External revenues 15,884 14,847 - - 1,182,191 Inter-segment revenues - - - (27,513) - Total revenues 15,884 14,847 - (27,513) 1,182,191 Segment profit (loss) before income tax (6,214) (6,537) (29) (49,244) 101,591 For the three month period ended June 30, 2009 Real Infrastructures estate and Infrastructures Real development construction and estate outside outside of construction development of Israel in Israel in Israel Israel Consessions ------ --------- --------- ------ ----------- NIS thousands NIS thousands Total External revenues 602,787 325,821 166,734 2,490 - Inter-segment revenues - 22,367 2,269 - - Total revenues 602,787 348,188 169,003 2,490 - Segment profit (loss) before income tax 86,085 5,206 45,470 4,185 (4,963) For the three month period ended June 30, 2009 Renewable energy (*) Water (*) Other Adjustments Consolidated --------- ----- ----- ----------- ------------ NIS thousands Total External revenues 12,472 13,891 240 1,124,435 Inter-segment revenues - - - (24,636) - Total revenues 12,472 13,891 240 (24,636) 1,124,435 Segment profit (loss) before income tax (2,505) 352 (2,603) (55,270) 75,957 (*) Restated as a result of splitting the environment segment into two operating segments (*) Restated as a result of splitting the environment segment into two operating segments
Shikun & Binui Ltd.
CONTACT: Company Contact: Doron Blachar, CFO, Shikun & Binui, Tel: +972
3 630 1518; Investor Relations Contacts: Ehud Helft / Porat Saar, CCG Investor
Relations, Tel: +1 646 233 2161/ +972 52 776 3687, info@ccgisrael.com
