TEL AVIV, Israel, March 30, 2015 /PRNewswire/ -- Delek
Group Ltd. (TASE: DLEKG, US ADR: DGRLY) (hereinafter: "Delek
Group" or "The Group") announced today its results for the fourth
quarter and full year period ended December
31, 2014. The full financial statements are available in
English on Delek Group's website at: www.delek-group.com
FINANCIAL HIGHLIGHTS OF THE FULL YEAR 2014
- The year 2014 was marked by value
realization - Delek Group completed a series of successful
divestitures and sold non-core assets for total proceeds of
NIS 4.9 billion generating cash of
NIS 4 billion;
- The Group strengthened its balance sheet
and lowered its net financial debt by 44% to NIS 3.3 billion at year-end 2014, compared with
NIS 5.9 billion as at the end of
2013;
- Due to the sale of non-core assets,
various assets were re-valued, resulting in a write-down charge of
NIS 1,021 million which led to a net
loss of NIS 765 million in
2014;
- The Company signed a non-binding MOU for
the sale of a portion of Phoenix Holdings Ltd.;
- The Tamar field continued successful
production of natural gas and sold approximately 7.5 BCM in 2014
and the development plan for the Aphrodite
field in Cyprus is expected to
advance in the coming months;
- The strengthening of the dollar versus the
shekel significantly improved the equity of the Company,
contributing to total comprehensive profit of NIS 401 million;
- Delek Group declared a dividend of
NIS 150 million for the fourth
quarter of 2014, contributing to a total of NIS 450 million for 2014;
Group revenues in 2014 totaled NIS
19.1 billion, compared with NIS 20.8
billion in 2013.
Group operating profit in 2013 totaled NIS 1.1 billion compared with NIS 1.4 billion in 2013. The decrease was
primarily due to the impairment of goodwill of NIS 508 million of Phoenix.
Net loss in 2014 totaled NIS 765
million compared with net income of NIS 740 million in 2013. The loss was due to the
write-down of various holdings of which the Company divested in
2014 and/or intends to divest in the near future. In line with IFRS
accounting rules, following the sale of Delek Europe, Roadchef,
Barak Capital, the control and a stake of Republic Insurance
Companies, Delek US and Delek Automotive shares as well as the
non-binding MOU signed to sell and cede control of Phoenix Holdings
Ltd., a total of NIS 1,021 million
was written-down which significantly impacted the net profit.
On February 22, 2015, Delek Group
completed a successful offering of NIS 800
million in Series 31 Debentures to investors, which were
oversubscribed by an excess of NIS 124
million.
On December 9, 2014, Delek Group's
Board of Directors approved a share buyback plan of up to
NIS 200 million until March 8, 2015. Until that date, Delek Group
purchased a total of 132,392 shares for a total consideration of
NIS 132.3 million, representing an
average price of NIS 999.6 per
share.
With regard to the previously discussed dual listing of Delek
Group's shares in London, due to
the volatility in international energy markets, as well as the
regulatory issues pending resolution in Israel, management have decided to delay the
process.
Mr. Bartfeld, President and CEO of Delek Group,
commented, "Over the past year
we maintain and advanced the strong focus on the Group on the
energy sector. We successfully completed a series of successful
divestitures which contributed NIS 4
billion to our cash flow, that proves, once again, our
strength, our financial flexibility and our ability to execute on
complex strategic plans and realize the goals we set ourselves.
Additionally, we appreciate the confidence the Israeli investor
community has in us, which was reflected, in part, due to the
excess demand for our recent bond offering."
Continued Mr. Bartfeld, "The year 2015 will be
characterized by the continued advancement of our focus on energy,
while utilizing our outstanding financial capabilities. We are
actively seeking and examining a new strategic investment in the
international energy market, which will be both synergistic and
complementary to the activities of the Group today, which will
provide continued growth, and allow us to setup a stable and strong
operations arm in the international energy field, along with our
ongoing activities in Israel."
MAIN BUSINESS
HIGHLIGHTS
|
CONTRIBUTION OF
PRINCIPAL OPERATIONS TO NET INCOME* (NIS MILLIONS)
|
|
|
|
|
|
|
|
|
|
|
FY
2014
|
FY
2013
|
Q4
2014
|
Q4
2013
|
|
Oil and Gas
Exploration, and Gas Production Operations
|
|
93
|
70
|
30
|
25
|
|
Fuel Operations in
Israel
|
|
4
|
34
|
(35)
|
4
|
|
Insurance and Finance
Operations in Israel
|
|
255
|
368
|
68
|
101
|
|
Automotive
Operations
|
|
107
|
125
|
12
|
17
|
|
Fuel Operations in
Delek Europe
|
|
(4)
|
14
|
-
|
(32)
|
|
Motorway Service Area
Operations in the UK
|
|
(2)
|
(2)
|
-
|
(5)
|
|
Fuel Operations in the
US
|
|
10
|
194
|
-
|
-
|
|
Oversees Insurance
Operations
|
|
17
|
65
|
-
|
26
|
|
Contribution to Net
Income before Capital Gains & Others
|
|
480
|
868
|
75
|
136
|
|
Capital Losses &
Others(1)
|
|
(1,245)
|
(128)
|
(195)
|
(11)
|
|
Net Income (Loss)
Attributed Group's Shareholders
|
|
(765)
|
740
|
(120)
|
125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) In
2014, and in light of actions to dispose of various assets, the
Company included a number of accounting write-downs due to changes
in the fair value of such assets and one-time gains (losses)
following their sale. For more information concerning these write
downs, see Section 2 in the Company's Annual 2014 Directors Report.
This item also includes the results of other operations,
unattributed finance expenses, other expenses, and tax
expenses.
|
*Portions of the
above tables have been extracted from Delek Group's Annual 2014
Directors Report.
|
The full report,
including the full notes for the above items, is available on the
Group's website at www.delek-group.com
|
ENERGY & INFRASTRUCTURE
OIL AND GAS EXPLORATION SECTOR HIGHLIGHTS
Tamar Project, 11 TCF natural gas discoveries
(Tamar and Tamar SW). Tamar and Yam Tethys together produced
7.5 BCM of natural gas in 2014, compared with 6.4 BCM in 2013. In
addition, Tamar sold 348 million barrels of condensate in 2014,
compared with 246 in 2013. An updated resource assessment of the
Tamar Project was published in February
2015.
The Tamar partners are working on a project to install
compressors which will increase Tamar's maximum capacity to 12
BCM/Y from 10 BCM/Y. This is expected to be completed by
June 2015.
On March 17, 2015, the letter of
intent for the export of natural gas to Egypt which was signed with Dolphinus Holdings
Limited was executed into a signed contract. The agreement is for
the supply of 250,000 MMBtu per day over 7 years on an
interruptible basis. The Buyer is responsible for transporting the
gas from Ashkelon to Egypt via the existing gas pipeline operated
by the East Mediterranean Gas Company. The price includes a floor
rate and is linked to the price of Brent.
The Tamar partners together with Union Fenosa Gas SA of
Spain are in advanced stages
towards the signing of a Binding Agreement for the supply of
natural gas to its existing liquefaction facilities in Egypt.
In addition, NBL Eastern Mediterranean Marketing Limited is in
discussion with the Arab Potash Company and Jordan Bromine Company
to increase the supply of natural gas which is expected to commence
in 2016, and expected to last for about 15 years.
Leviathan, a 22 TCF natural gas
discovery. On December 22,
2014, the Anti-Trust Commissioner in Israel informed the Company and its partners
of its decision not to submit the agreed signed order for
confirmation and that it is reconsidering issuing a ruling
declaring the partners in Leviathan as a restrictive arrangement.
The Authority agreed to conduct an oral hearing prior to issuing
this ruling.
Leviathan partners are in discussions with the various
regulators including the Antitrust Commissioner in order to reach
an agreement for a structural change, which, in the Authority's
opinion, will encourage competition in the natural gas market in
Israel, as well as agreements
covering all the other remaining regulatory issues which fall under
the Ministry of Energy's and the Ministry of Finance's
responsibility. This is in order to create the necessary certainty
for the partners to make the needed investment decisions for the
development of the Leviathan project and Tamar's expansion
project.
In February 2015, the Antitrust
Authority postponed the publication of their statement by two
months, in light of the willingness of all sides to seek a solution
to ensure a competitive natural gas market. The partners continue
to work together with the various authorities with a goal to reach
an agreement.
On March 10, 2015, the Palestine
Power Generation Company gave a 30-day conditioned cancellation
notice to the Leviathan partners on the supply agreement signed on
January 5, 2014, due to various
issues including non-receipt of Antitrust Authority and other
regulatory approvals, and the delay in approving the development
plan of Leviathan.
Aphrodite, a 4.5 TCF (Contingent &
Prospective) natural gas discovery located in the Block 12 license,
off the coast of Cyprus. The
partners in Block 12 together with the government of Cyprus are examining options for the
development of Block 12 which will enable the supply of natural gas
to the local market in Cyprus as
well as the export of natural gas via pipelines to other markets,
including Egypt. In the second
half of 2015, the Aphrodite partners will submit to the Government
of Cyprus a notice declaring
Aphrodite commercial under the SPC with a drafted development plan
of Aphrodite. This will include a preliminary plan for the
establishment of a FPSO with an estimated initial production
capacity of approximately of 800 mmcf/d.
Gas Production Summary. Net income from the sector for
2014 was NIS 93 million, an increase
compared to a net income of NIS 70
million in 2013. The growth was mainly due to the increase
in revenues from the Tamar project in 2014, while in 2013, Tamar
gas production only commenced in the second quarter.
Downstream Energy Sector Highlights
Delek – the Israel Fuel Company Ltd. (fully held by Delek
Group); net income in 2014 amounted to NIS
18 million compared with a net income of NIS 36 million in 2013. The decrease was
primarily due to increased financial expenses due to the early
redemption of bonds as well as inventory losses.
Delek Europe. Delek Group sold Delek Europe BV on
August 28, 2014, for €355 million
(NIS 1.7 billion). Hence, Delek
Europe's results ceased to be consolidated within Delek Group's
results from that date onwards.
Roadchef. On September 30,
2014, the Company sold its entire holdings in Roadchef to
Antin Infrastructure Partners, a European infrastructure fund, for
approximately GBP 153 million
(approximately NIS 910 million).
Hence, Roadchef's results ceased to be consolidated within Delek
Group's results from that date onwards.
Delek US (NYSE: DK). Following the balance sheet date,
Delek Group completed the sale of an additional 5% of its holdings
for a total of US$ 110 million. This
follows the sale of approximately 23% of Delek US shares in 2014
which resulted in total proceeds of NIS 1.4
billion. Following the sale, the Company currently holds
approximately 2.1% of the outstanding share capital of Delek
US.
The sale of Delek Europe, Roadchef and the lowering of Delek
Group's direct holdings of Delek US is part of the Group's strategy
to increase its focus on its core business of Exploration and
Production, as well as strengthening the Group's balance sheet.
INSURANCE AND FINANCIAL SERVICES
In light of the sale process of Phoenix (of which Delek Group holds 52%),
the Company recognized a NIS 508
million impairment on its investment in Phoenix. In 2014, Phoenix contributed a profit of
NIS 255 million to the Group's net
income compared with NIS 368 million
in the same period last year. The results of Phoenix's operations in the reporting period
were materially affected by lower management fees in 2014.
On January 27, 2015, a non-binding
memorandum of understanding was signed between the Company and a
foreign Company with activities in the insurance sector,
encompassing details of an agreement to sell the control in
Phoenix at a range of between 42%
to 52.3% of the equity
On October 23, 2014, a transaction
to sell 34% of its holdings in Republic (of which Delek
Group currently holds 66%) was completed and control was
transferred to a group of investors from the United States. Proceeds totaling
approximately US$ 75 million
(approximately NIS 263 million) have
been received.
The Group's holdings in Barak Capital, of which the Group
held approximately 47%, were sold for NIS
237 million in July 2014.
DIVIDEND DISTRIBUTION
On March 30, 2015, the Board of
Directors of Delek Group declared a cash dividend distribution for
the fourth quarter of 2014 in the amount of approximately
NIS 150 million (or NIS 12.7761 per share) to shareholders. The
ex-date is on April 13, 2015 and the
dividend will be paid on April 30,
2015.
CONFERENCE CALL DETAILS
The Company will be hosting a conference call in English
on March 31, 2015 at 3.30pm Israel
time, 8.30am Eastern Time. Management
will also be available to answer investor questions.
To participate, please call one of the following
teleconferencing numbers:
Israel on: 03-9180685
USA on: 1-888-281-1167
UK on: 0-800-917-5108
International: +972-3-918-0685
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 40
TCF.
In addition, Delek Group has a number of assets in downstream
energy, water desalination, and in the finance sector.
For more information on Delek Group please visit
www.delek-group.com or Email: investor@delek-group.com
Investor Relations Contact
Dalia Black / Dina
Vince
Delek Group
Tel:
+972 9 863 8444
Email:
investor@delek-group.com
Delek Group Income
Statement (NIS Millions)
|
|
|
|
|
|
|
|
2014
|
2013 (*)
|
|
10-12/2014
|
10-12/2013
(*)
|
|
|
|
|
|
|
Revenues
|
19,123
|
20,850
|
|
4,226
|
5,506
|
Cost of
revenues
|
14,193
|
16,227
|
|
2,847
|
4,248
|
Gross
profit
|
4,930
|
4,623
|
|
1,379
|
1,258
|
|
|
|
|
|
|
Sales, marketing and
gas station operating expenses
|
1,883
|
1,755
|
|
506
|
461
|
General and
administrative expenses
|
1,253
|
1,261
|
|
304
|
349
|
Other expenses,
net
|
699
|
162
|
|
229
|
244
|
Operating
profit
|
1,095
|
1,445
|
|
340
|
204
|
|
|
|
|
|
|
Finance
income
|
244
|
109
|
|
41
|
5
|
Finance
expenses
|
(1,249)
|
(1,316)
|
|
(279)
|
(231)
|
Profit (loss)
after financing
|
90
|
238
|
|
102
|
(22)
|
|
|
|
|
|
|
Gains (loss) from
disposal of investments in investees and others, net
|
-
|
(8)
|
|
-
|
(8)
|
The Group's share in
the profits of associate companies and partnerships, net
|
205
|
430
|
|
55
|
64
|
Profit before
income tax
|
295
|
660
|
|
157
|
34
|
|
|
|
|
|
|
Income
tax
|
197
|
492
|
|
75
|
107
|
Profit (loss) from
continuing operations
|
98
|
168
|
|
82
|
(73)
|
Profit (loss) from
discontinued operations, net
|
(447)
|
1,167
|
|
(62)
|
255
|
Net profit
(loss)
|
(349)
|
1,335
|
|
20
|
182
|
|
|
|
|
|
|
Attributable to
-
|
|
|
|
|
|
Company
shareholders
|
(765)
|
740
|
|
(120)
|
125
|
Non-controlling
interest
|
416
|
595
|
|
140
|
57
|
|
(349)
|
1,335
|
|
20
|
182
|
|
|
|
|
|
|
(*) Re-classified,
see Note 2AI to the financial statements.
|
Summary of key
one-time write-downs in the reporting period: (NIS
millions)
|
|
|
|
2014
|
The
Phoenix
|
508
|
Recognition of
currency differences on the investment in Delek USA
|
263
|
One-time expenses in
natural gas operations
|
103
|
Republic
|
60
|
Barak
Capital
|
34
|
Gadot
|
30
|
Delek
Israel
|
23
|
Total principal
one-time write-downs
|
1,021
|
|
|
For more information
concerning the accounting write-downs, see Note 14 to the financial
statements.
|
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SOURCE Delek Group Ltd.