TEL AVIV, Israel, Dec. 2, 2019 /PRNewswire/ -- Delek Group
Ltd. (TASE: DLEKG), (TASE: US) and (ADR:
DGRLY) (hereinafter: "Delek Group" or "The Group")
announced on November 28, 2019 its
results for the third quarter period ended September 30, 2018. The full financial statements
are available in English on Delek Group's website at:
www.delek-group.com
Third Quarter 2019 Highlights
- Net income amounted to NIS 65
million, compared with NIS 323
million in Q3 2018; the E&P sector contributed
NIS 101 million to net
income
- The Leviathan project is fully complete, with domestic gas
sales and exports to Egypt and
Jordan scheduled to begin in the
coming weeks
- With the acquisition of Chevron's North Sea assets and the
full divestiture of the Phoenix Insurance Company, Delek Group has
achieved its strategy of transforming itself into a pure-play
international energy firm
Group revenues for 9M19 totaled NIS 6.1 billion, flat with NIS 6.1 billion in 9M18. In the third quarter of
2019, revenues totaled NIS 2.0
billion compared with NIS 2.2
billion in 3Q18, a decrease of 9%. This was mainly driven by
lower contribution from Ithaca Energy. These results do not include
revenue from the recently acquired Chevron North Sea assets, which
will begin to appear on Ithaca's P&L as of
4Q19.
Group operating profit for 9M19 totaled NIS 1.0 billion, lower than NIS 1.2 billion in 9M18. In the third quarter of
2019 operating profit totaled NIS 306
million compared with NIS 397
million in 3Q18, a decrease of 23%.
Net income for 9M19 totaled NIS 545 million, lower than NIS 736 million in 9M18. In the third quarter of
2019 net income was NIS 65 million
compared with NIS 323 million in
3Q18. The difference is due mainly to a large upward revaluation of
the Pheonix Insurance Company that occurred in the same period last
year. The current cash balance as of November 28, 2019 was approximately
NIS 1.0 billion,
including unutilized credit lines and marketable securities.
Management Comment
Mr. Asaf Bartfeld, President
and CEO of Delek Group, commented, "The sale of the
Pheonix Insurance Company, purchase of Chevron's North Sea Assets,
and the commencement of gas sales from Leviathan represent the full
implementation of Delek Group's strategy, and position it as a
leading international energy firm for the next decade."
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Main Business
Highlights
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Contribution of
Principal Operations to Net Income* (NIS millions)
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Q3
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Q3
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FY
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2019
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2018
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2018
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Oil and Gas E&P
Operations in Israel and its Surroundings
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99
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123
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437
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Oil and Gas E&P
Operations in the North Sea
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2
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88
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283
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Fuel Operations in
Israel
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30
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34
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70
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Contribution to
continuing operations before discontinued operations and capital
and other gains
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131
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245
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790
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Finance Expenses
& Others
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(66)
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78
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(273)
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Net Income (Loss)
Attributed to Group's Shareholders
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65
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323
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517
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Oil and Gas Exploration & Production
Delek Group's strategy is to focus on the development of its
core assets in the Eastern Mediterranean and the UK's North Sea.
Having divested the last of its non-core assets, the Company is now
set on becoming a key player in the international energy industry
with operational capabilities.
Tamar & Leviathan
Tamar's sold 2.8BCM of natural during 3Q19. The Leviathan
project is almost complete, with first commercial gas expected in
the next few weeks, and inspections of the undersea EMG pipeline
connecting Israel and Egypt have been completed successfully. The
pipeline to Jordan is functioning,
and the transfer of ownership in EMG shares to the partnership
taking control of the infrastructure has been concluded. This means
that along with supply to domestic Israeli customers, Leviathan
will begin gas exports to Egypt
and Jordan by the end of this
year.
Ithaca Energy
Ithaca contributed NIS 54 million to Delek Group's
operating income in the quarter, compared with a NIS
151 million contribution in 2018. Cashflow from
operations stood at a healthy NIS 119
million for the quarter.
Production volumes were impacted by maintenance on the
production platform at Stella, and reached 15,700
barrels of oil equivalent per day during 3Q19, below the
16,500 boed seen in the third quarter of 2018.
Quartely production costs were USD20.6/boe, up from USD17.1/boe last year. Lower gas prices also had
an impact during the quarter, though Ithaca's hedges at average
levels of approximately USD 65 per
barrel of oil and USD 6.90 per mmbtu
of gas mitigated this to some extent.
On a pro-forma basis, taking into account the acquisition of
Chevron assets, full year 2019 production is expected to average
approximately 75,000 boepd, approximately 60% liquids.
Ithaca's expected average production over the final quarter of the
year will be approximately 80,000 boepd.
Downstream Energy Sector
Delek – the Israel Fuel Company Ltd. (fully held by Delek
Group); operating profit contribution in the third quarter of 2018
amounted to NIS 41 million compared
with NIS 51 million in the third
quarter of 2018.
Other Assets
Non-core assets completely divested Delek Group its
remaining 32.5% of the Phoenix Insurance Company on November 4, 2019, generating NIS 1.33 billion in cash. On November 10, 2019, Ithaca completed the
acquisition of Chevron's North Sea assets, for a total sum of
USD 1.67 billion. With these two
transactions, the Company has achieved its strategy of transforming
itself into a pure-play international E&P firm, with 95% of
assets now linked to energy. The focus of the coming year will be
the integration of the Chevron assets into Ithaca, with the
ultimate goal of launching Ithaca's IPO in London as soon a practically possible.
Net Financial
Debt*
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As at 28 November,
2019
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NIS
Millions
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Liabilities
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Debentures
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6,360
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Bank and other
loans
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2,653
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Other
liabilities
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94
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Total
liabilities
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9,107
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Assets
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Cash and
deposits
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453
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Pledged
deposits
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265
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Financial
investments
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381
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Loans
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490
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Seller's loan for the
sale of The Phoenix
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235
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Loans to
Ithaca
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900
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Other
payables
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38
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Treasury
shares
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207
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Total
Assets
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2,969
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Net Financial
Debt
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6,138
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*This table, including full notes, is contained in financial
reports that will be available on the Group's website at
www.delek-group.com
Conference Call Details
The Company will be hosting a conference call in English
today on Monday, December 2, 2019 at
3:30pm (Israel Time), 8:30am (ET), 1:30pm
(UK). To participate in the conference call, please dial:
Israel:
03-918-0610
The USA:
1-888-668-9141
The UK:
0-800-917-5108
International: +972-3-918-0610
A day following the conference calls, a recording of both the
calls will be hosted on the Company's website at:
http://ir.delek-group.com.
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. Ithaca Energy, Delek Group's North Sea operator,
concluded the acquisition of Chevron's North Sea assets for
USD 1.67 billion in November 2019. The assets include 10 fields
producing 60 kboe per day, with 131 mboe of 2P reserves and 45 mboe
of 2C reserves.
For more information, please visit www.delek-group.com or
email: investor@delek-group.com
Contact Information
Yonah
Weisz
Head of Investor
Relations
Delek Group
Ltd.
Tel: +972 9 863
8443
Email:
investor@delek-group.com
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SOURCE Delek Group Ltd