The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from PR Newswire

Delek Group Announces Consolidated Results for the First Nine Months of 2013

Thursday, November 28, 2013

Delek Group Announces Consolidated Results for the First Nine Months of 2013

04:38 EST Thursday, November 28, 2013

TEL AVIV, Israel, Nov. 28, 2013 /PRNewswire/ -- Delek Group Ltd. (TASE: DLEKG, OTCQX: DGRLY) (hereinafter: "Delek Group" or "The Group") announced today its results for the three and nine month period ended September 30, 2013. The full financial statements will be available in English on Delek Group's website at: www.delek-group.com.                                

FIRST NINE MONTHS 2013 HIGHLIGHTS

  • Group operating profit of NIS 1.5 billion, an increase of 69% compared with NIS 0.9 billion in the same period last year;
  • Net income reached NIS 625 million for the nine month period and NIS 70 million for the third quarter;
  • Delek Group announced a dividend of NIS 70 million for the third quarter of 2013.

Group revenues for the first nine months of 2013 amounted to NIS 28.4 billion, a slight increase compared with NIS 28.2 billion in the first nine months of 2012.

Net income in the first nine months of 2013 totaled NIS 625 million a significant improvement compared with a net income of NIS 243 million in the first nine months of 2012. The increase is due to the sale of 3.6% of Delek US shares in the second quarter of 2013, and from the net revaluation of the investment balance following effective loss of control. Subsequently, a capital gain in the amount of NIS 467 million, net, was recorded. In addition, the insurance and financial services sector contributed a significant portion to the Group's net income, amounting to NIS 316 million in the first nine months of 2013. Net income in the third quarter of 2013 totaled NIS 70 million, after a deduction of a one off tax expense this quarter of NIS 100milion as a result of the expected increase in Corporate Tax, compared with NIS 93 million in the third quarter of 2012.

Group total assets as of September 30, 2013, amounted to NIS 125 billion, compared with NIS 123 billion as of December 31, 2012.

Commented Mr. Bartfeld, CEO of Delek Group, "Delek Group continues its strategy of increasing our focus on the upstream part of our business while at the same time successfully reducing the Group's leverage. We are very pleased with the production performance of Tamar, our natural gas discovery (together with our partners) off the coast of Israel that started producing earlier this year. Our focus is now on advancing the Leviathan project, as quickly as possible."

Continued Mr. Bartfeld, "The Supreme Court decision to reject the appeal filed against the decision of the Government of Israel with regard to the natural gas export policy, paved the way for promoting the export potential of natural gas from the reservoirs which are held by Delek Group and its gas partnerships. Consequently, the gas partnerships, together with their partners, are exploring export options to various countries in the region through pipeline, LNG facilities and/or FLNG. In addition, the partners of the Leviathan project continue their negotiations with Woodside Petroleum Ltd. over potential participation in the Leviathan project. Looking forward, we intend to continue to focus on energy and develop our activities in this area which will be a major and important accelerator of growth over the coming years."

MAIN BUSINESS HIGHLIGHTS

CONTRIBUTION OF PRINCIPAL OPERATIONS TO NET INCOME* (NIS MILLIONS)

9M2013

9M2012

Q3 2013

Q3 2012

FY 2012

US Fuel Sector Operations

194

546

(7)

232

669

Oil and Gas Exploration

46

(6)

41

(31)

22

Delek Europe

46

66

27

26

57

Israeli Fuel Sector Operations

30

13

16

15

9

UK Service Station Sector

3

1

24

8

(16)

Insurance and Finance Operations in Israel

278

62

55

22

150

Insurance and Finance Operations in US

38

(1)

17

24

33

Automotive operations

108

27

24

(1)

77

Contribution to Net Income before 

Capital Gains & Others 

743

709

197

295

1,001

Others and Capital Gains

(118)

(466)

(127)

(202)

(555)

Net Income attributed Group's shareholders

625

243

70

93

446

* Parts of the above table have been extracted from Delek Group's First Nine Months 2013 Directors Report.

Please review the full report available on the Group's website www.delek-group.com to view the notes for each of the items above.

ENERGY & INFRASTRUCTURE

Oil and Gas Exploration Sector Highlights

Tamar, a 10 TCF natural gas discovery off the coast of Israel; Tamar and Yam Tethys together produced 4.5 BCM in the first nine months of 2013, and 2.1 BCM in the third quarter of 2013. In addition, Tamar sold condensate at a quantity of 84 thousand of barrels in the third quarter of 2013.

In the past couple of days the Group gas subsidiaries announced that South West Tamar exploration rig has reached target ? final depth of 5,340 meters below sea level, and the partners concluded that strong signs of natural gas were discovered based on logging tests while drilling that were carried out by the Operator, Noble Energy Mediterranean Ltd.

Leviathan, a 19 TCF natural gas discovery off the Northern coast of Israel; The Supreme Court in Israel made the decision on October 21, 2103, to reject the petitions concerning the decision taken by the Israeli government to adopt the Zemach Committee recommendations regarding export options for natural gas. Various production options for Leviathan are still being considered.

Aphrodite, a 5.2 TCF (Contingent & Prospective) natural gas discovery located in the Block 12 license, off the coast of Cyprus; in late September production tests at "Aphrodite A-2" in the Cyprus Block 12 License were conducted and completed successfully. This was followed by an announcement at the beginning of October that the "Aphrodite A-2" appraisal well was completed. An updated reserves report will be published on completion.

Gas Production Summary; Net income from the sector for the first nine months of 2013 was NIS 46 million, as compared to a net loss of NIS 6 million in the same period during of 2012. The increase in net income is mainly due to the recognition of revenues from the Tamar project and recognition of the profit from leasing oil and gas assets following the entry into force of the agreement granting rights to use the facilities in the Yam Tethys project.

Delek US (NYSE: DK; Delek Group holds 31% end-Q3 2013): Net income in the first nine months of 2013 was NIS 411 million compared with a net income of NIS 842 million in the first nine months of 2012. The declined profitability was due to the decrease in Gold Coast crack spreads 5-3-2 from $29.96 in the third quarter last year to $12.30 in the third quarter of 2013. Also the activity was adversely affected by changes in market conditions, whereby the oil originating in Midland Texas (WTI) was traded at a discount of approximately $0.28 per barrel in the third quarter compared with a discount of $1.74 in the third quarter of last year.

Delek ? the Israel Fuel Company Ltd. (fully held by Delek Group): Net income in the first nine months of 2013 was NIS 36 million, compared with a net income of NIS 24 million in the first nine months of 2012. The increase was primarily due to inventory gains.

Delek Europe (Delek Group holds 100% indirectly) Net income in the first nine months of 2013 was NIS 46 million, compared with a net income of NIS 68 million in the first nine months of 2012. The decline was due to a decrease in the number of litres sold, which was partially offset by an increase in sales of convenience stores.

Roadchef (fully held by Delek Group). Net income for Roadchef was NIS 3 million in the first nine months of 2013 versus a net income NIS 1 million in the first nine months of last year. The increase was due to increase in operating efficiencies due to the various steps management have taken over the past year.

INSURANCE AND FINANCIAL SERVICES

The insurance and financial services sector contributed NIS 316 million to the Group's net income in the first nine months 2013, compared to a contribution of NIS 61 million in the same period last year.

DIVIDEND DISTRIBUTION

On November 27, 2013, the Board of Directors of Delek Group declared a cash dividend distribution for the third quarter of 2013 in the amount of approximately NIS 70 million (approximately NIS 5.9622 per share) to the shareholders on record as of December 22, 2013 and the dividend will be paid on January 5, 2014.

CONFERENCE CALL DETAILS

The Group will be hosting a conference call in English on November 28, 2013 at 3:30pm Israel time, 1:30pm UK time and 8:30am Eastern Time. Management will also be available to answer investor questions.

To participate, please call one of the following teleconferencing numbers.  Please begin placing your calls at least 5 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.

US Dial-in Number: 1 888 407 2553 UK Dial-in Number: 0 800 917 5108 ISRAEL Dial-in Number: 03 918 0644 INTERNATIONAL Dial-in Number:  +972 3 918 0644At:8:30am Eastern Time, 1:30pm UK Time, 3:30pm Israel Time

On the call, CEO Asaf Bartfeld and CFO Barak Mashraki will review and discuss the results, and will be available to answer your questions.

About The Delek Group

The Delek Group, Israel's dominant integrated energy company, is the pioneering leader of the natural gas exploration and production activities that are transforming the Eastern Mediterranean's Levant Basin into one of the energy industry's most promising emerging regions. Having discovered Tamar and Leviathan, two of the world's largest natural gas finds since 2000, Delek and its partners are now developing a balanced, world-class portfolio of exploration, development and production assets with total gross natural gas resources discovered since 2009 of approximately 38 TCF.

In addition, Delek Group has a number of assets in downstairs energy, in water desalination, and in the finance sector.

For more information on Delek Group please visit www.delek-group.com

 

Delek Group Income Statement (NIS Millions)

9M 2013

9M 2012*

Q3 2013

Q3 2012*

FY 2012

Revenues

28,381

28,225

9,644

9,935

37,920

Cost of revenues

23,102

23,459

7,757

8,201

31,594

Gross profit

5,279

4,766

1,887

1,734

6,326

Sales, marketing and gas station operating      expenses

2,691

2,671

922

917

3,592

General and administrative expenses

1,171

1,196

390

406

1,619

Other income (expenses), net

81

(11)

(20)

17

(65)

Operating profit

1,498

888

555

428

1,050

Finance income

178

231

92

54

315

Finance expenses

(1,314)

(1,337)

(563)

(478)

(1,548)

Profit after financing

362

(218)

84

4

(183)

Gain from disposal of investments in      investees and others, net

2

30

(1)

(4)

60

The Group's share in the profits of associate      companies and partnerships, net

26

109

190

(2)

214

Profit before income tax

390

(79)

273

(2)

91

Tax on Income (tax benefit)

374

34

189

23

91

Loss from continuing operations

16

(113)

84

(25)

-

Profit from discontinued operations, net

1,076

720

-

262

955

Net profit

1,092

607

84

237

955

Attributable to -

Equity holders of the parent

625

243

70

93

446

Non-controlling interest

467

364

14

144

509

1,092

607

84

237

955

*Reclassified, please refer to note 3B to the consolidated financial report.

The notes are an integral part of the financial statement and can be found at www.delek-group.com

Contact:Dalia Black / Dina VinceDelek GroupTel: +972 9 863 8444Email: investor@delek-group.com

SOURCE Delek Group Ltd.

Products
  • Globe Unlimited

    Digital all access pass across devices. subscribe

  • The Globe and Mail Newspaper

    Newspaper delivered to your doorstep. subscribe

  • Globe2Go

    The digital replica of our newspaper. subscribe

  • Globe eBooks

    A collection of articles by the Globe. subscribe

See all Globe Products

Advertise with us

GlobeLink.ca

Your number one partner for reaching Canada's Influential Achievers. learn more

The Globe at your Workplace
Our Company
Customer Service
Advertising Privacy
Globe Recognition
Mobile Apps
NEWS APP
INVESTING APP
Other Sections