TEL AVIV, Israel, March 31 /PRNewswire-FirstCall/ -- Delek Group Ltd. (TASE: DLEKG) (hereinafter: "Delek Group" or "The Group") announced today its results for the fourth quarter and twelve month periods ending December 31, 2007. The full financial statements in English are available on Delek Group's website at: http://www.delek-group.com
Main Highlights
- Full year net income reached NIS 1.3 billion and NIS 129 million in the fourth quarter
- Strong performance in 2007 in the Israeli fuel sector, US fuel sector and automotive sector
- Declared NIS 64 million dividend for fourth quarter 2007, bringing the year's total to NIS 554 million
Net income for 2007 totalled NIS 1.3 billion, compared with NIS 1.5 billion for 2006. Net income excluding capital gains, for 2007 totalled NIS 1.1 billion compared with NIS 940 million for 2006, representing an increase of 22%. This increase is attributed to profit growth in the Israeli fuel sector, US fuel sector, automotive sector and the inclusion, for the first time of profits of the European fuel sector.
Net income for the fourth quarter of 2007 was NIS 129 million, compared with NIS 283 million for the fourth quarter last year. The lower net income is primarily due to the decline in refining margins at Delek US following the sharp increase in crude oil prices; the challenging capital market conditions which resulted in a decline in the results of the Group's Israeli insurance holding, Phoenix; Delek Real Estate's lower net contribution, resulting from revaluation surpluses taken into account in the accounts of the previous year and the differing accounting methods used at Delek Group from its subsidiary Delek Real Estate; and the absence of capital gains in the quarter compared to that of the same period last year. These were offset by strong growth in the Israeli fuel sector and automotive sector, and the financial performance of the Group's private assets including Delek Europe, Republic Insurance in the US as well as the water desalination company, IDE.
Mr. Asaf Bartfeld, CEO of Delek Group commented on the results, "This quarter culminates another good year for Delek Group. We continued to show solid business performance across all our main areas of activity, while taking advantage of the capital markets throughout the year to successfully raise resources for us as a corporate as well as many of our group companies. We ended the year with a very strong cash position of over NIS 900 million, enabling us on the one hand, to pursue valued-adding transactions taking advantage of lower asset prices in the market, while on the other hand, granting us substantial financial resources in the current and more challenging global economic environment."
"On the business side, Delek US presented a strong year in terms of business and financial performance. Our private assets as well as our local fuel subsidiary, Delek Israel, also showed healthy performance, while our automotive company generated a record year with robust growth, positively capitalizing on market trends by successfully introducing new vehicles to the Israeli market. Looking ahead, we view 2008 as a year of opportunities, which, with our strong resources, create many prospects for us as a group. We have already illustrated this, by the acquisition in February of 2008 of 100% of Elk Resources, the US oil & gas exploration and production company, for $96m. Altogether we are very pleased with our performance throughout 2007, as well as our success in identifying opportunities and delivery on our shareholder value enhancing strategy," concluded Mr. Bartfeld.
Mr. Barak Mashraki, CFO of Delek Group added, "Given our continued solid financial performance, we remain committed to sharing our success with our shareholders. For the quarter, we declared a dividend of NIS 64 million, bringing the total dividend allocated for the year 2007 to NIS 554 million, representing a 2007 dividend payout of over 43% of the Group's net income."
Main Business Highlights for the Full Year and Fourth Quarter
Contribution of Principal Operations to Net Profit* (NIS millions)
Q1 2007 Q2 2007 Q3 2007 Q4 2007 2006 2007
US Fuel Sector Operations 57 212 102 (18) 337 353
Israeli Fuel Sector 1 34 40 62 25 137
Operations
Fuel operations in Europe - - 13 18 - 31
Oil and Gas Exploration 26 8 41 14 108 89
Oil Exploration Expenses (43) (15) - - - (58)
Automotive Operations 56 71 59 60 151 246
Real Estate Operations 20 62 25 (13) 235 94
Insurance and Finance 90 83 (80) 26 109 119
Operations
Capital Gains on Sale of - - 86 - - 86
Amisragas**
Capital Gains & Others 118 (22) 102 (20) 548 178
Net Income 325 433 388 129 1,513 1,275
* Parts of this have been extracted from Delek Group's full year 2007 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.
** 39% of Amisragas, one of Israel's largest LPG gas retailer's was sold by Delek- the Israel Fuel Company, during the third quarter 2007.
Energy & Infrastructure
Delek USA (Delek Group holds 74% end-Q4 2007): Net income for 2007 totalled NIS 456 million, a 9% increase compared with NIS 418 million for 2006. Net loss for the fourth quarter of 2007 totalled NIS (23) million. The loss in the quarter primarily resulted from the weaker refining segment which was impacted, among other things, by the sharp increase in crude oil prices. Delek USA was able to partially offset the higher crude oil prices by continuing to optimize its crude oil slate and by generating higher results in the retail segment.
Delek - the Israel Fuel Company Ltd. (TASE:DLKIS; Delek Group holds 89% end-Q4 2007): net income for the year was NIS 260 million, a substantial increase compared NIS 48 million in the same period last year. Net income for the year includes a non-recurring capital gain of approximately NIS 90 million from the sale of 39% in AmisraGas. Net income for the quarter increased to NIS 68 million, compared with NIS 12 million in the fourth quarter last year. The higher net income in both periods is due to improved gross margin, lower operating expenses, and overall improved operating efficiencies.
Delek Europe. In August 2007, Delek Group acquired the marketing activities of a subsidiary of Chevron Global Energy Inc. in the Benelux countries, including approximately 803 Texaco branded fuel stations. Since the purchase, net income from these activities totalled NIS 31 million. In the fourth quarter, net income was NIS 18 million.
The Oil and Gas Exploration, and Gas Production sector, generated a net income of NIS 31 million in 2007, which includes a NIS 58 million expense recorded following the abandoning of the two drills in Guinea Bissau. Net income for the year, excluding this one-time expense totalled NIS 89 million, compared to a NIS 108 million net income in 2006. Net income for the quarter totalled NIS 14 million, compared to NIS 31 million in the fourth quarter last year.
Real Estate Operations
Delek Real Estate (TASE: DLKR; Delek Group holds 67.9% end-Q4). Delek Real Estate's contribution to net income for the year reached NIS 94 million, compared with NIS 235 million in net income last year. Net loss for the fourth quarter of 2007 totaled NIS (13) million compared to a net income contribution of NIS 88 million in 2006. The lower net income contribution was primarily due to the effect of the different accounting methodologies used by Delek Real Estate and Delek Group.
Currently, Delek Real Estate reports under IFRS accounting standards whilst Delek Group reports under Israeli GAAP. Under the IFRS accounting methodology, Delek Real Estate reported net income for the year 2007 of NIS 308 million.
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 held through wholly-owned Delek Finance US Inc. The insurance and financial services sector contributed NIS 119 million to the Group's net income in 2007, compared to NIS 109 million in 2006. The sector contributed NIS 26 million in net income for the quarter, compared with a NIS 56 million net income in the fourth quarter of 2006.
Automotive Operations
Delek Automotive Systems Ltd. (TASE: DLEA; Delek Group holds 55.4% end-Q4 2007): Delek Automotive Systems' net income for 2007 totalled NIS 427 million, a 56% increase compared with NIS 273 million last year. Net income for quarter increased 54% reaching NIS 60 million, compared to NIS 39 million in the fourth quarter last year. The higher net income in both the quarter and year follows the change in the mix of vehicles sold during the periods, compared to last year, as well as currency fluctuations.
Dividend Distribution
On March 30, 2007, the Board of Directors of Delek Group declared a cash dividend distribution for the fourth quarter of 2007 to the amount of approximately NIS 64 million (NIS 5.5 per share) to the shareholders on record as of 14th April 2008. This dividend is in addition to the NIS 490 million dividends allocated out of 2007 financial year. The ex-date is 15th April 2008 and the dividend will be paid on 29th April 2008.
Conference Call Details
The Company will be hosting a conference call in English later today, Monday, March 31st, 2008. On the call, CEO Assaf Bartfeld and CFO Barak Mashraki 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: 1-888-642-5032, UK: 0-800-051-8913, ISRAEL: 03 918 0685, INTERNATIONAL: +972-3-918-0685 at: 8:30am Eastern Time, 1:30pm UK Time, 3:30pm Israel Time
About The Delek Group
The Delek Group is one of the leading and most prominent and dynamic investment groups in Israel. The Delek Group is diversified into the following three major subsidiaries:
- Delek Petroleum, with its two subsidiaries: Delek Israel, a gasoline and lubricants distributor in Israel, and Delek USA (NYSE), which operates gas stations and convenience stores and an oil refinery in Southern United States.
- Delek Investments and Properties, a holding company with subsidiaries in the energy, infrastructure, automotive, finance and media sectors.
- Delek Real Estate, through its subsidiaries Dankner and Delek Belron Investments, owns and manages prime global real-estate investments.
Contact:
Dalia Black Kenny Green
Head of Investor Relations International Investor Relations
Delek Group GK International
Tel: +972-9-863-8444 Tel: (US) +1-646-201-9246
(UK) +44(0)871-474-1218
Email: black_d@delek.co.il E-mail: info@gkir.com