TEL AVIV, Israel, August 31, 2010 /PRNewswire/ -- Delek Group Ltd.
(TASE: DLEKG.TA ; OTC: DGRLY) (hereinafter: "Delek Group" or "The
Group") announced today reported its results for the three and six
month periods ended June 30, 2010.
The full financial statements are available on Delek Group's
website at: http://www.delek-group.com.
First Six Months 2010 Highlights
- Revenues grew year-over-year 10% to NIS 21.8 billion;
- Group operating profit reaches NIS 1.1 billion growing 18%
year-over-year;
- Net income of NIS 269 million;
- Strong improvement in profitability in the European gas
station business, Oil & Gas E&P sector and insurance sector;
- Initial drilling of the Leviathan prospect on track for Q4 2010.
First Six Months 2010 Results
Group revenues for the first six months of 2010 totaled
NIS 21.8 billion, a growth of
approximately 10% compared with NIS 19.9
billion in the same period in 2009. Group revenues in the
second quarter of 2010 amounted to NIS 10.4
billion, compared with NIS 10.8
billion in the second quarter of 2009. The increase in
six-month revenues was primarily as a result of increased sales at
the refinery in Tyler, Texas.
Operating profit for the first six months of 2010 totaled
NIS 1.1 billion, a 18% increase over
NIS 940 million in the same period in
2009. Operating profit in the second quarter of 2010 amounted to
NIS 676 million, a 32% increase
compared with NIS 513 million in the
second quarter of 2009.
Net income for the first six months was NIS 269 million, compared with the NIS 380 million in the same period in 2009. Net
income in the second quarter was NIS 64
million, compared with NIS 233
million reported in the second quarter of 2009. The
reduction is due to an increase in financial expenses at some of
the subsidiary companies. Group total assets as of June 30, 2010, amounted to NIS 86.2 billion, compared with NIS 84.3 billion as of December 31, 2009.
Group total liabilities: In the second quarter, the Company
successfully raised NIS 255 million
in bonds convertible to company's shares and added to existing
series of bonds a further NIS 844
million.
Mr. Asaf Bartfeld, CEO of Delek
Group commented, "We are happy with our performance so far in 2010.
All our businesses are performing well and we are seeing a solid
improvement in the results of Delek Europe, which contributed
significantly to our profitability in the first half of this year.
In the fourth quarter we will complete the purchase of BP's retail
fuel and convenience store business in France, a strategic deal for us which will
significantly expand our activities in Europe. Furthermore, in our upstream sector,
we are excited about the initial exploration drilling that we will
commence in the coming months at the Leviathan prospect off the
coast of Israel. We remain highly
focused on investing in our oil and gas exploration activities,
which has been highly successful to date and has tremendous
potential for the Group."
Main Business Highlights
Contribution of Principal Operations to Net Income* (NIS millions)
FY H1 H2 Q2 Q2
2009 2009 2010 2009 2010
US Fuel Sector Operations 27 95 (2) 97 40
Israeli Fuel Sector Operations 82 61 34 29 10
Delek Europe 59 44 69 41 55
Oil and Gas Exploration 23 (32) 52 2 22
Automotive Operations 250 107 130 53 36
Insurance and Finance
Operations 181 88 122 6 27
Capital Gains & Others 247 22 (136) (5) (126)
Net Income excl. Real Estate
Activities in 2009 869 385 269 223 64
Real Estate activities (5) (5) - - -
Net income attributed Group's
shareholders 864 380 269 223 64
* Parts of the above table have been extracted from Delek Group's Second
Quarter 2010 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
The Oil and Gas Exploration, and Gas Production sector. Oil and
gas exploration activities contributed NIS
241 million in revenue for the first half of 2010, compared
with revenue of NIS 186 million in
the first half of 2009. The increase was primarily due to increased
sales of natural gas in the period, as a result of an increase in
sale price, based on agreements signed with the Israel Electric
Company and Israel Chemicals at the end of December 2009. The amount of gas supplied in the
6 month period, at 1.3 BCM was at the same levels as that supplied
in the same period last year. Net income for the first half of 2010
was NIS 52 million compared to a net
loss of 32 million in the first half of 2009.
Summarising the oil exploration activities off the coast of
Israel;
In June 2010, the partners in the
Tamar natural gas discovery announced a proved and probable reserve
of natural gas at the site of approximately 8.7 TCF (about 247
BCM). Commercialization of the natural gas at Tamar is on track for
2012. Noble Energy Mediterranean Ltd. (hereinafter: "Noble"), the
operator and partner in the Tamar project, announced results of a
3D seismic study, revealing amongst other prospects, the Leviathan
showing a gross mean resource of 16 TCF (about 453 BCM) with a 50%
probability of success.
In August 2010, the budget of
$150 million for the drilling of the
Leviathan prospect (135 km west of Haifa,
Israel) was approved. Drilling is scheduled to begin in
October 2010 using the Sedco Express
drilling rig, drilling to a depth of 5,095 meters (including water
depth), the deepest well to have ever been drilled off the coast of
Israel.
Delek US (NYSE: DK; Delek Group holds 72.6% end-Q2 2010):
Revenues in the first half of 2010 were NIS
7.1 billion compared with NIS 4.0
billion in the first half of 2009, an increase of 77%. It is
important to note that the refinery at Tyler, Texas was closed for large portion of
the first half of 2009 for repairs and upgrades. Net loss in the
first half of 2010 was NIS 2 million
compared with a net income of NIS 134
million in the first half of 2009. However, results in the
second quarter were strong with net income standing at NIS 55 million compared with a loss of
NIS 136 million in the second quarter
of 2009.
In the second quarter the company saw strong demand for refined
products in each of its operating segments and operated the
Tyler refinery at or near peak
capacity for the duration of the quarter. The second quarter also
demonstrated improved Gulf Coast refining economics and elevated
retail fuel margins. The WTI 5-3-2 refining margin reached a second
quarter average $9.5 per barrel, an
increase of 45% compared with the first quarter of 2010.
In the retail segment in the second quarter, strong same-store
sales of fuel and merchandise led to one of the best quarters in
retail in nearly two years.
Delek - the Israel Fuel Company Ltd. (TASE: DLKIS.TA; Delek
Group holds 77% end-Q2 2010): Revenues in the first half of 2010
were NIS 2.5 billion compared with
1.9 billion in the first half of last year. This increase was due
primarily to the increased quantities of gasoline sold to
commercial enterprises, as well as an increase in sales at
convenience stores, when compared with that of last year.
Net income in the first half of 2010 amounted to NIS 53 million compared with a net income of
NIS 75 million in the same period in
2009. The decrease in net income was primarily due to increased
competition which led to erosion of margins.
Delek Europe. Delek is an operator of 850 gas stations across
the Benelux region. Revenues in the first half of 2010 were
EUR976 million compared with
EUR942 million in the same period
last year. Net income in the first half of 2010 was EUR15 million, compared with a net income of
EUR8 million in the same period in
2009. The improvements were driven by an increase in the quantity
of gasoline sold, improvement in the gross profitability in the
gasoline sector and growth in the convenience store sector.
Following the end of the reporting period in August, the
acquisition by Delek Europe of BP's retail fuels and convenience
business in France, including 416
petrol stations and its interests in 3 terminals was approved by
the European Commission, and there remains no additional precedent
conditions on which the closure of the deal is dependent on. The
transaction is expected to close in the fourth quarter of 2010.
Infrastructure Sector (including IDE, 50% indirectly held by
Delek Group and IPP, 100% held by Delek Group) contributed
NIS 34 million to Delek Group's net
income, the majority of which was due to IDE.
Insurance and Financial Services
The activities of this segment are primarily conducted through
two insurance companies; Israeli insurance company, Phoenix
Holdings Ltd. (TASE: PHOE), and general US insurer, Republic
Companies, Inc. that is an indirectly wholly owned subsidiary.
The insurance and financial services sector contributed
NIS 122 million to the Group's net
income in the first half of the year, a growth of 39%, compared to
a net income of NIS 88 million in the
same period last year.
Phoenix reported a sharp rise
in net profit amounting to NIS 172
million in the first six months of the year, compared to
NIS 110 million last year. In
particular, in the second quarter, the company reported
NIS 45 million compared with
NIS 10 million in the second quarter
last year. The results were improved over those of last year due to
the significant improvement in the capital market environment
globally and in Israel in the past
year.
Automotive Operations
Delek Automotive Systems Ltd. (TASE: DLEA.TA; Delek Group holds
55% end-Q2 2010): Delek Automotive is the exclusive distributor of
Mazda and Ford in Israel. Revenues
in the first half of 2010 grew to NIS 2.3
billion compared to NIS 2.0
billion in the same period of 2009. Net income at Delek
Automotive in the first half of 2010 reached NIS 221 million compared to a net income of
NIS 192 million in the same period in
2009. In the second quarter, Delek Automotive saw a reduction in
net income to NIS 60 million from
NIS 103 million in the second quarter
of last year due to an increase in financial expenses because of
exchange rate changes.
Delek Automotive sold 20,928 cars in the first half of 2010
compared with 17,980 in the same period last year, and currently
holds a market share of approximately 20%.
Conference Call Details
The Company will be hosting a conference call in English on
Tuesday, August 31st, 2010 at
9:30am ET, 2:30pm UK time, 4:30pm Israel
time. On the call, CEO Asaf
Bartfeld, CFO Barak Mashraki
and VP & 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: +1-866-345-5855, UK:
+44(0)800-404-8418, Israel:
+972(0)3-918-0691.
About The Delek Group
Delek Group is the leading energy & infrastructure group
based out of Israel with
investments in upstream & downstream energy, water desalination
and power plants globally. In addition, Delek is the number one
importer & distributor of vehicles in Israel and owns insurance assets in
Israel and the US. Earlier this
year, Delek Group, through its subsidiaries, discovered significant
quantities of high quality natural gas off the coast of
Israel. Delek Group sales reached
over 43 billion Israeli shekel in 2009.
For more information on Delek Group please visit
http://www.delek-group.com.
Contact:
Dalia Black Kenny Green
Vice President, Investor Relations International Investor Relations
Delek Group CCG Investor Relations
Tel: +972-9-863-8444 Tel: +1-646-201-9246
Email: black_d@delek.co.il E-mail: delek-group-ir@ccgisrael.com