Shikun & Binui Reports Results for Fourth Quarter and Full Year 2011
AIRPORT CITY, Israel, March 28, 2012 /PRNewswire/ --
- Fourth Quarter revenue growth of 13% to NIS 1.4 billion
- Projects backlog in the Construction and Infrastructures Segment totaled NIS 9.6 billion at end of Fourth Quarter
- Net Profit in 2011 totaled NIS 375 million (after neutralizing the gain from ADO acquisition), compared with NIS 289 million in Year 2010 (after neutralizing the gain from the "Derech Eretz" transaction) - growth of 30%.
- Company's Board of Directors announce a dividend of NIS 65 million - NIS 0.7 per share
Ofer Kotler, CEO of Shikun & Binui: "Year 2011 was characterized by continued realization of our strategy and intensive activity in all growth engines. The Group has the know-how, capabilities and financial resources that will enable continued growth and additional expansion of operations while boosting financial strength and creating value for shareholders"
Noteworthy events during and subsequent to the fourth quarter and key results:
- The Group expanded its concession activities: it was awarded the tender for construction, operation, maintenance and training for the Israel Police's National Training Center. In February, the concession agreement was signed; financing agreements are expected to be signed at the beginning of the Second Quarter.
- Shikun & Binui SBI Infrastructures augmented and solidified its position and involvement in the infrastructures outside of Israel segment, after being awarded a $210 million contracting project in Nigeria in December 2011. The project includes construction of a bridge, foundation construction and paving of 22 kilometers of access roads. The project is expected to continue for three years.
- The Group strengthened its hold in the alternative energy sector: In November 2011, Shikun & Binui Renewable Energy acquired the shares of "Paz-Solar", which is engaged in the development, construction and operation of photo-voltaic solar energy projects. The consideration is NIS 12million, to which additional amounts will be added, depending on the development of projects and other factors.
- In October 2011, the Company acquired 38% of a pumped storage project in Ma'aleh Gilboa, in consideration for NIS 42 million. The project is estimated at NIS 1.5 billion, and the plant will produce 200MW of electricity. Additionally, the Company acquired 50% of a pumped storage project in Manara, for production of 300 MW of electricity.
- The Group achieved significant milestones in construction of the "Tzelim" Project: during February, the Group introduced the "Chalutz" ["Pioneer"] facility - an operational, testing and demonstration facility for production of renewable (thermo-solar) energy using Israeli developed and owned technology. The "Chalutz" facility constitutes the first stage in the construction of a thermo-solar power plant in Tzelim. The planned power plant, which was awarded "National Project" status, will produce clean electricity totaling up to 120 megawatts, and operate as part of the Government's goal to promote the production of electricity from renewable energy.
- Shikun & Binui Real Estate expanded its operations in non-residential development activities. In December 2011, it signed an agreement to sale 50% of its interest in the Kiryat Ata site and develop a third branch of Ikea in Kiryat Ata encompassing 23,000 square meters. The northern Ikea store will be part of a commercial center that will also contain a shopping center (28,000 square meters), parking spaces and a gas station. The total investment in the site is estimated at NIS 600 million, and Shikun & Binui Real Estate recognized a pre-tax gain on the sale of its interest of NIS 37 million.
- In January, the "Broshim Dormitories" Projects began: the Migdal Group and Shikun & Binui Real Estate signed an agreement, whereby Migdal will provide up to NIS 255 million of credit to finance the Broshim Site in the Tel Aviv University students' dormitory project. Construction at the Broshim Site is expected to begin shortly, and occupancy is expected in the 2013 academic year. The project development costs are estimated to be NIS 300 - 350 million.
- Shikun & Binui Real Estate sold 442 housing units in the fourth quarter of the year, for a total of NIS 516 million. In November, Shikun & Binui Real Estate sold 235 units in the Hadera Project in the "Chever" campaign. In 2011, Shikun & Binui Real Estate sold 830 housing units for a total of NIS 1.1 billion.
- During 2011, the Group distributed a dividend of NIS 379 million - NIS 0.96 per share
- Backlog of the Group's projects in the Construction and Infrastructures Segment on 31.12.11 totaled NIS 9.6 billion ($2.52 billion), growth of 9% compared with the end of 2010. $2.05 billion originates in overseas operations.
Revenuesfrom work performed andsales totaled NIS 1.4 billion in the quarter, an increase of 13% compared with Q4 of last year.
Revenues from the infrastructures and construction outside of Israel segment rose by 18%, compared with the fourth quarter of last year, totaling NIS 685 million. The growth was driven by start of operations in Tanzania and expansion of activity in Nigeria, Kenya and Uganda.
Revenues from the infrastructures and construction in Israel segment rose by 13.2%, compared with the fourth quarter of last year, totaling NIS 464 million. The growth was driven by accelerated performance and the bringing forward of timetables in the projects.
Revenues from the real estate development in Israel segment increased by 2.6% compared with Q4 last year to NIS 238 million.
Revenues from the renewable energy segment grew by 66% compared with the fourth quarter of last year, to a total of NS 40 million.
Gross profit totaled NIS 209 million (14.8% of revenues), compared with NIS 283 million in Q4 of 2010 (22.7% of revenues). The decrease is due mainly (NIS 54 million) to the infrastructure and construction outside of Israel segment and is a result of the start of projects in Uganda, in which gross profitability was not yet recognized, in accordance with accounting principles. Also impacting gross profit and gross margin are the deferral to the first quarter of 2012 of the occupancy of residential products of Shikun & Binui Real Estate, which are characterized by high gross margins.
Operating profit totaled NIS 157 million (11.1% of revenues), compared with NIS 416 million in Q4 of 2010, which included the recognition of a NIS 256 million gain from the Derech Eretz transaction, which is attributed to all the operating segments. After neutralizing the effect of these revenues, operating profit in the fourth quarter was NIS 157 million, similar to Q4 of last year -NIS 160 million (12.9% of revenues).
Net financing expenses in the quarter totaled NIS 50 million, compared with NIS 44 million in the fourth quarter of last year, and were impacted by the taking of short-term loans, while, contrarily, long-term financing expenses decreased, due to the effect of the CPI.
The Group's equity in earnings of affiliates totaled NIS 13 million in the quarter, compared with a loss of NIS 37 million in Q4 of 2010. In the reporting quarter, the Group recognized a gain on its share in the results of Derech Eretz, whereas a loss was recognized in the fourth quarter last year. This quarter's results included a loss of NIS 26 million from an impairment provision posted by the public company ADO, in which the Company holds 48%.
Net Profit totaled NIS 69 million in the quarter, compared with NIS 295 million in Q4 of last year, in which the gain from the "Derech Eretz" transaction was recorded (NIS 256 million). After neutralizing the effect of this gain, net profit in the fourth quarter of last year was NIS 39 million.
The Group does not revalue its investment properties and they are presented in the financial statements at historical cost.
Equity as of December 31, 2011 totaled NIS 969 million, compared with NIS 875 million on December 31, 2010. The increase in equity is driven mainly by the profits of Year 2011, offset by the Company's dividend distribution to its shareholders this year.
The Company has cash and cash equivalentsbalances totaling approximately NIS 1.25 billion. During the quarter, the Group generated cash totaling NIS 242 million.
Total assets in the balance sheet amounted to NIS 9.6 billion.
Doron Blachar, Group CFO: "During 2011, the Group raised NIS 190 million from institutional investors in a new series of debentures that was added to the series issued in the last three years. These financial resources, in addition to the cash generated by the Group, facilitate our increasing the volume of activity".
Condensed Results for Year 2011 (in NIS millions):
January-December January-December
2011 2010
Revenues 5,335 4,871
1,050 1,006
Gross profit 19.7% 20.6%
Gross margin
Administrative and general expenses 343 316
Other operating income (expenses) 81 223
800 901
Operating profit 15% 18.5%
Operating profit margin
800 645
Operating profit after neutralizing
effect of "Derech Eretz" revaluation 14.9% 13.2%
Neutralized operating profit margin
Financing expenses (net) (167) (168)
Net profit 444 545
Net profit after neutralizing the effect
of "Derech Eretz" revaluation 444 289
Conference call today at 16:00 Telephone: +972-3-9180664
About Shikun & Binui
Shikun & Binui, a member of the Arison Group, is the leading infrastructure and real estate company in Israel. The Group's subsidiaries have been operating since 1924. The Group's companies have gained extensive experience in complex construction and infrastructure projects in Israel and abroad. Shikun & Binui Group has proven achievements in building, residential neighborhoods, commercial and industrial buildings, as well as large-scale transportation, infrastructure and ecological projects, water purification and desalination and development of international projects. In addition, Shikun & Binui also operates in the initiating, planning, construction and operation of projects in renewable energy. Shikun & Binui is a leading, multi-faceted and socially responsible international group that produces balance between the business, social and environmental accomplishment. The group places emphasis on honesty, transparency, innovation, and excellence. The group has accepted upon itself a leadership role in creation of a sustainable and progressive life environment.
The above noted in this release includes forward-looking statements based on Company data, as well as Company plans and estimations based on this data. The activity, results and other data may be substantially different in reality given uncertainty and various risks, including those discussed under risk factors in the Company's financial statements and Director's reports.
Shikun & Binui Ltd.
Consolidated Statements of Financial Position as at
December 31 December 31
2011 2010
NIS thousands NIS thousands
Assets
Cash and cash equivalents 1,255,476 1,357,613
Bank deposits 148,320 420,937
Short-term loans and investments 107,061 82,681
Short-term loans to investee companies 139,266 252,704
Trade receivables - accrued income 1,210,838 776,145
Inventory of buildings held for sale 1,529,088 1,390,397
Receivables and debit balances 261,329 291,803
Other investments, including derivatives 1,375 784
Current tax assets 78,360 61,431
Inventory 292,549 238,015
Assets classified as held for sale 2,326 13,478
Total current assets 5,025,988 4,885,988
Receivables in respect of concession
arrangements 516,598 (*)225,817
Non-current inventory of land (freehold) 406,788 443,956
Non-current inventory of land (leasehold) 334,090 164,672
Investment property, net 310,291 286,936
Land rights 16,096 17,163
Long-term prepaid expenses 5,884 4,798
Receivables, loans and deposits 284,353 140,721
Investments in equity-accounted investees 562,240 399,311
Loans to investee companies 806,207 862,079
Deferred tax assets 93,518 103,201
Property, plant and equipment, net 1,138,974 923,617
Intangible assets, net 106,419 (*)95,728
Total non-current assets 4,581,458 3,667,999
Total assets 9,607,446 8,553,987
(*) Reclassified
Shikun & Binui Ltd.
Consolidated Statements of Financial Position as at (cont'd)
December 31 December 31
2011 2010
NIS thousands NIS thousands
Liabilities
Short-term credit from banks and others 895,863 648,790
Subcontractors and trade payables 1,009,226 844,063
Short-term employee benefits 63,952 38,367
Payables and credit balances including
derivatives 499,030 490,570
Current tax liabilities 107,204 80,193
Provisions 271,701 238,862
Payables - customer work orders 794,325 718,588
Advances received from customers 901,049 872,999
Dividend payable to non-controlling
interests 12,947 -
Total current liabilities 4,555,297 3,932,432
Liabilities to banks and others 1,600,494 1,277,079
Debentures 2,247,226 2,196,502
Employee benefits 112,005 148,370
Deferred tax liabilities 43,896 33,682
Provisions 43,756 36,372
Excess of accumulated losses over cost of
investment
and deferred credit balance in investee
companies 35,388 54,267
Total non-current liabilities 4,082,765 3,746,272
Total liabilities 8,638,062 7,678,704
Equity
Total equity attributable to owners of
the Company 864,593 736,255
Non-controlling interests 104,791 139,028
Total equity 969,384 875,283
Total liabilities and equity 9,607,446 8,553,987
(*) Reclassified
Shikun & Binui Ltd.
Consolidated Statements of Income for the Year Ended
December 31 December 31 December 31
2011 2010 2009
NIS NIS NIS
thousands thousands thousands
Revenues from work performed and
sales 5,335,126 4,871,077 4,453,729
Cost of work performed and sales 4,285,373 3,864,630 3,570,666
Gross profit 1,049,753 1,006,447 883,063
Gain on sale of investment property 50,819 14,816 10,978
Selling and marketing expenses (39,555) (27,733) (25,147)
Administrative and general expenses (342,880) (316,305) (268,704)
Other operating income 89,760 261,558 135,565
Other operating expenses (8,351) (38,192) (28,690)
Operating profit 799,546 900,591 707,065
Financing income 179,588 216,140 132,726
Financing expenses (346,407) (384,657) (393,437)
Net financing expenses (166,819) (168,517) (260,711)
Share of losses of equity
accounted investees (net of tax) (44,593) (42,635) (66,981)
Profit before taxes on income 588,134 689,439 379,373
Taxes on income (143,913) (144,336) (147,232)
Profit for the period 444,221 545,103 232,141
Attributable to:
Owners of the Company 412,668 523,468 237,337
Non-controlling interests 31,553 21,635 (5,196)
444,221 545,103 232,141
Basic earnings per share (in NIS) 1.04 1.33 0.60
Diluted earnings per share (in NIS) 1.03 1.32 -
For the year ended December 31, 2011
Infrastructures
and Infrastructures Real estate
construction and Real estate development
outside of construction development outside of
Israel in Israel in Israel Israel Concessions
(Unaudited)
NIS thousands
Total
external
revenues 2,726,917 1,238,429 935,907 4,858 277,361
Inter-segment
revenues - 376,161 3,834 - -
Total
revenues 2,726,917 1,614,590 939,741 4,858 277,361
Segment
profit (loss)
before
income tax 443,923 47,640 302,641 314 78,017
For the year ended December 31, 2010
Infrastructures
and Infrastructures Real estate
construction and Real estate development
outside of construction development outside of
Israel in Israel in Israel Israel Concessions
(Unaudited)
NIS thousands
Total
external
revenues 2,499,738 1,290,923 818,904 6,841 126,926
Inter-segment
revenues - 208,491 8,063 - -
Total
revenues 2,499,738 1,499,414 826,967 6,841 126,926
Segment
profit (loss)
before
income tax 456,919 17,136 239,426 (40,590) 33,273
For the year ended December 31, 2009
Infrastructures
and Infrastructures Real estate
construction and Real estate development
outside of construction development outside of
Israel in Israel in Israel Israel Concessions
(Unaudited)
NIS thousands
Total
external
revenues 2,199,643 1,317,154 804,830 6,546 -
Inter-segment
revenues - 119,444 8,295 - -
Total
revenues 2,199,643 1,436,598 813,125 6,546 -
Segment
profit (loss)
before
income tax 365,997 8,967 181,112 (58,482) (12,778)
(table continues)
For the year ended December 31, 2011
Renewable Unallocated
energy Water Other Adjustments amounts Consolidated
(Unaudited)
NIS thousands
Total
external
revenues 112,947 38,707 - - - 5,335,126
Inter-segment
revenues - - - (379,995) - -
Total
revenues 112,947 38,707 - (379,995) - 5,335,126
Segment
profit (loss)
before
income tax (29,719) (12,233) (10,308) 34,333 (266,474) 588,134
For the year ended December 31, 2010
Renewable Unallocated
energy Water Other Adjustments amounts Consolidated
(Unaudited)
NIS thousands
Total
external
revenues 74,312 53,433 - - - 4,871,077
Inter-segment
revenues - - - (216,554) - -
Total
revenues 74,312 53,433 - (216,554) - 4,871,077
Segment
profit (loss)
before
income tax (44,823) (16,038) (4,706) 63,520 (14,678) 689,439
For the year ended December 31, 2009
Renewable Unallocated
energy Water Other Adjustments amounts Consolidated
(Unaudited)
NIS thousands
Total
external
revenues 75,523 50,263 (230) - - 4,453,729
Inter-segment
revenues - - - (127,739) - -
Total
revenues 75,523 50,263 (230) (127,739) - 4,453,729
Segment
profit (loss)
before
income tax (12,635) (6,368) (4,828) 42,980 (124,592) 379,373
Company Contact:
Doron Blachar, CFO
Shikun & Binui
Tel: +972-3-630-1518
email: doron@shikunbinui.com
Investor Relations Contacts:
Nava Ladin
GK Investor Relations
Tel: +972-3-6074717
email: nava@gk-biz.com
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