Shikun & Binui Reports Second Quarter and First Half Results for 2011
AIRPORT CITY, Israel, August 23, 2011 /PRNewswire/ --
- Operating Income growth of 71.5% compared with Q2 of 2010
to a total of NIS 264 million;
Operating Profitability - 19.7% compared with 13% in Q2 of 2010
- Net Income growth in the quarter by 160% compared with Q2 of 2010 to a total of NIS 171 million
Ofer Kotler, CEO of Shikun & Binui: "The Group continues to increase the volume of activity in its strategic growth engines; in the Group's concession projects, the realization of their value is progressing. The Group is developing capabilities in the renewable energy and water segments concurrent with its intention to make significant investments in these areas."
Shikun & Binui Ltd. (TASE: SKBN.TA) ("Shikun & Binui" or the "Company"), a member of the Arison Group and Israel's leading infrastructure and real estate company, announced today its results for the second quarter 2011, ended June 30th, 2011.
Key events during and subsequent to the second quarter and significant results:
- The Group's orders backlog in the construction and infrastructures segment totaled NIS 8 billion on 30.6.2011, of which NIS 6 billion ($1.8 billion) originates in the Group's operations outside of Israel.
- Shikun & Binui SBI Infrastructures added to and strengthened its position in Africa, and won an extension to the project it had been awarded in 2006 - paving a highway in Nigeria totaling 230 million dollars. Expansion of the project, which is still not included in the orders backlog as of the quarter-end, totals 190 million dollars, bringing the total amount of this project in Nigeria to 420 million dollars. The project will be carried out during 2011 - 2013.
- The subsidiary Shikun & Binui Real Estate sold 209 housing units in the second quarter of the year (Company's share - 162 units for a total of NIS 219 million). In the first half of 2011, Shikun & Binui Real Estate sold 447 housing units (Company's share - 335 units for a total of NIS 472 million).
- In renewable energy: The future solar thermal power plant in Tze'elim received approval from the United Nations to register the emissions reduction mechanism (CDM). This approval constitutes recognition of the necessity of the project and its economic and environmental feasibility, and is expected to increase the projected revenues from the project. Through this project, the Group is also realizing the sustainability vision by integrating and balancing economic considerations with environmental and social considerations.
- In July, Shikun & Binui Renewable Energy received notice from the National Energy Commission in Spain of cancellation of the suspension of the special rate for electricity produced from photo-voltaic energy in the Ulmeda Project in Spain, and that the project is entitled to benefit from the special rate. As a reminder, in the financial statements for the first quarter of 2011, the Group wrote-down the carrying value of the project by NIS 16 million. The effect of cancellation of the suspension is expected to be included in the third-quarter financial statements.
- In August, Derech Eretz Highways (operator of Highway 6) waived its right of first refusal to purchase the State's rights to certificates of participation in Derech Eretz. In view of the high price determined for the certificates of participation, the Company elected not to participate in financing the waiving of the first right of refusal, despite its ability to finance such an acquisition. Consequently, the Company's holdings in Derech Eretz, on a fully-diluted basis, will remain at 25.5%. The joint control agreement between the Company and Israel Infrastructures Fund (which holds the balance of the holdings in Derech Eretz) will remain in effect.
- In August, the Group raised NIS 193 million in an expansion of Series 4 debentures. Midroog gave a rating of "A2" with a stable outlook to this expansion as well (Series 4).
Revenues from work performed and sales totaled NIS 1.3 billion in the Quarter, growth of 13% compared with the second quarter of last year.
Most of the growth was driven by the real estate development in Israel segment: growth of 38.6% in revenues compared with Q2 of last year, to a total of NIS 202 million, resulting from the accelerated rate of homes that were populated (139 units in the reporting period, compared with 78 units in Q2 of 2010)
Revenues from the infrastructures and construction outside of Israel segment had 14.7% growth compared with Q2 of 2010, to a total of NIS 763 million, driven mainly by the expansion of activities overseas.
Revenues from the renewable energy segment had growth of 43.8% compared with the second quarter of last year, to a total of NIS 23 million.
Revenues from the concessions segment, which totaled NIS 82 million, were driven by work on the project to rehabilitate and maintain highways in northern Israel that commenced in the second quarter of last year.
During the quarter, the decrease in the dollar exchange rate had an offsetting effect on revenue growth, due to its impact on the revenues of the infrastructures and construction outside of Israel segment. Had the dollar exchange rate in the quarter not decreased in comparison with Q2 of 2010, an additional NIS 76 million in revenues would have been posted in this segment.
Gross profit totaled NIS 279.4 million (20.9% of revenues), an increase of 17.9% compared with the same quarter last year (20% of revenues). The growth was driven mainly by the real estate development in Israel segment (52% growth in gross profit), due to the growth in turnover and the ongoing increase in housing prices, and by the infrastructures and construction outside of Israel segment (21% growth in gross profit), due to receipt of final invoices and approval of exceptional claims from customer work orders. Had it not been for the decrease in the dollar exchange rate, compared with its rate in Q2 of 2010, gross profit of the infrastructures and construction outside of Israel segment would have been NIS 19 million higher.
The Group posted other operating income this quarter of NIS 85.5 million, of which NIS 82.2 million was driven by revaluation of the investment in the affiliate ADO, deriving from the closing of the Group's transaction with ADO in February 2011, pursuant to which it became the largest shareholder in ADO (48%).
Operating profit totaled NIS 263.9 million (19.7% of revenues), 71.5% higher than in the second quarter of last year (13% of revenues). The growth was driven by the real estate development in Israel segment and the infrastructures and construction outside of Israel segment and by the revaluation of the investment in ADO, as discussed previously.
Net financing expenses totaled NIS 50 million, compared with NIS 47.5 million in the second quarter of last year. The similar rate of increase in the Consumer Price Index in the reporting quarter and in the second quarter last year led to similar financing expenses.
Net profit for the period totaled NIS 170.8 million, compared with NIS 65.5 million in the second quarter of last year, growth of 160%.
The Group does not revalue its investment properties and they are presented in the financial statements at historical cost.
Equity as of June 30, 2011 totaled NIS 886 million, compared with NIS 875 million on December 31, 2010. The increase in equity is due mainly to the profits of the first six months of 2011, offset by the Company's dividend distribution to its shareholders this year.
The Company has cash and cash equivalents balances totaling NIS 768 million and an unutilized credit facility totaling NIS 911 million. During the quarter, the Group consumed cash totaling NIS 247 million, due mainly to the purchase of properties by the subsidiary Shikun & Binui Real Estate and to the project for maintaining roads in the northern Israel. In the second quarter last year, Shikun & Binui Real Estate executed mainly combination transactions and the Group recognized substantial advance payments from the activities of SBI overseas.
Total assets in the balance sheet amounted to NIS 8.6 billion.
Doron Blachar, Group CFO: Our deep involvement in concession tenders in Israel constitutes a significant growth engine. The process of creating value in concession projects and realization of their value will continue to guide us in the coming years."
Conference call today at 16:00 IL time Telephone: +972-3-9180610
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.
Condensed Consolidated Interim Statement of Financial Position as at
June 30 June 30 December 31
2011 2010 2010
(Unaudited) (Audited)
NIS
NIS thousands NIS thousands thousands Assets
Cash and cash equivalents 768,262 1,147,289 1,357,613
Bank deposits 169,899 193,884 420,937
Short-term loans and investments 42,011 68,925 82,681
Short-term loans to investee
companies 247,290 169,527 252,704
Trade receivables - accrued income 1,011,226 786,369 776,145
Inventory of buildings held for
sale 1,461,966 1,210,017 1,390,397
Receivables and debit balances 332,155 218,810 291,803
Other investments, including
derivatives 1,635 35,764 784
Current tax assets 74,025 84,955 61,431
Inventory 228,231 195,995 238,015
Assets classified as held for sale 4,875 26,678 13,478
Total current assets 4,341,575 4,138,213 4,885,988
Receivables in respect of
concession
arrangements 393,283 (*) 89,420 (*) 225,817
Non-current inventory of land
(freehold) 413,061 444,887 443,956
Non-current inventory of land
(leasehold) 329,343 173,573 164,672
Investment property, net 318,316 299,827 286,936
Land rights 17,193 17,023 17,163
Long-term prepaid expenses 5,281 3,287 4,798
Receivables, loans and deposits 184,874 377,270 140,721
Investments in equity-accounted
investees 576,722 155,631 399,311
Loans to investee companies 775,258 744,157 862,079
Deferred tax assets 91,037 109,336 103,201
Property, plant and equipment, net 1,052,581 937,626 923,617
Intangible assets, net 96,351 (*) 93,299 (*) 95,728
Total non-current assets 4,253,300 3,445,336 3,667,999
Total assets 8,594,875 7,583,549 8,553,987
(*) Reclassified
Shikun & Binui Ltd.
Condensed Consolidated Interim Statement of Financial Position as at (cont'd)
June 30 June 30 December 31
2011 2010 2010
(Unaudited) (Audited)
NIS
NIS thousands NIS thousands thousands
Liabilities
Short-term credit from banks and others 929,721 722,719 648,790
Subcontractors and trade payables 975,203 683,804 844,063
Short-term employee benefits 43,607 32,715 38,367
Payables and credit balances including
derivatives 488,156 (*) 307,678 490,570
Current tax liabilities 103,616 (*) 87,930 80,193
Provisions 228,786 380,697 238,862
Payables - customer work orders 499,881 609,845 718,588
Advances received from customers 915,839 743,129 872,999
Liabilities classified as held for sale - 6,195 -
Dividend payable to non-controlling
interests 41,428 - -
Total current liabilities 4,226,237 3,574,712 3,932,432
Liabilities to banks and others 1,187,386 1,223,306 1,277,079
Debentures 2,046,922 1,933,157 2,196,502
Employee benefits 146,203 144,505 148,370
Deferred tax liabilities 27,700 (*) 33,032 33,682
Provisions 40,108 23,841 36,372
Excess of accumulated losses over cost of
investment
and deferred credit balance in investee
companies 34,056 42,242 54,267
Total non-current liabilities 3,482,375 3,400,083 3,746,272
Total liabilities 7,708,612 6,974,795 7,678,704
Equity
Total equity attributable to owners
of the Company 782,428 447,088 736,255
Non-controlling interests 103,835 161,666 139,028
Total equity 886,263 608,754 875,283
Total liabilities and equity 8,594,875 7,583,549 8,553,987
(*) Reclassified
Shikun & Binui Ltd.
Condensed Consolidated Interim Statement of Income
For the
For the six-month For the three-month year
period ended period ended ended
December
June 30 June 30 June 30 June 30 31
2011 2010 2011 2010 2010
(Unaudited) (Unaudited) (Audited)
NIS NIS NIS NIS
thousands thousands NIS thousands thousands thousands
Revenues from work
performed and sales 2,665,611 2,270,358 1,336,255 1,182,191 4,871,077
Cost of work
performed
and sales 2,063,036 1,816,554 1,056,853 945,219 3,864,630
Gross profit 602,575 453,804 279,402 236,972 1,006,447
Gain on sale of
investment property 9,534 7,309 305 7,309 14,816
Selling and
marketing expenses (16,896) (11,924) (8,689) (6,614) (27,733)
Administrative and
general
expenses (165,074) (144,959) (85,076) (72,733) (316,305)
Other operating
income 85,554 916 85,554 200 261,558
Other operating
expenses (9,593) (15,531) (7,613) (11,234) (38,192)
Operating profit 506,100 289,615 263,883 153,900 900,591
Financing income 121,523 154,505 50,149 73,383 216,140
Financing expenses (211,014) (214,987) (100,167) (120,905) (384,657)
Net financing
expenses (89,491) (60,482) (50,018) (47,522) (168,517)
Share of profit
(losses) of equity
accounted investees
(net of tax) (35,376) 8,633 (4,172) (4,787) (42,635)
Profit before taxes
on income 381,233 237,766 209,693 101,591 689,439
Taxes on income (88,434) (65,680) (38,890) (36,059) (144,336)
Profit for the
period 292,799 172,086 170,803 65,532 545,103
Attributable to:
Owners of the
Company 274,755 163,867 163,792 60,790 523,468
Non-controlling
interests 18,044 8,219 7,011 4,742 21,635
292,799 172,086 170,803 65,532 545,103
Basic earnings per
share
(in NIS) 0.69 0.42 0.41 0.15 1.33
Diluted earnings per
share
(in NIS) 0.69 0.42 0.41 0.15 1.32
Number of shares
used in the
computation of basic
earnings
per share (in
thousands) 395,730 394,545 396,882 394,545 394,545
Number of shares
used in the
Computation of
diluted earnings
per share (in
thousands) 399,702 394,545 400,033 394,545 396,256
Shikun & Binui Ltd.
Operating Segments
For the six month period ended June 30, 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 1,439,123 519,790 499,099 2,132 145,221
Inter-segment
revenues - 189,901 3,790 - -
Total
revenues 1,439,123 709,691 502,889 2,132 145,221
Segment
profit (loss)
before
income tax 274,817 23,018 177,169 49,226 38,675
(Table continued)
Renewable
energy Water Other Adjustments Consolidated
(Unaudited)
NIS thousands
Total
external
revenues 42,141 18,105 - - 2,665,611
Inter-segment
revenues - - - (193,691) -
Total
revenues 42,141 18,105 - (193,691) 2,665,611
Segment
profit (loss)
before
income tax (29,786) (7,632) (5,769) (138,485) 381,233
For the six month period ended June 30, 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 1,282,307 615,348 305,346 3,402 -
Inter-segment
revenues - 56,157 4,244 - -
Total
revenues 1,282,307 671,505 309,590 3,402 -
Segment
profit (loss)
before
income tax 234,388 9,457 94,343 (24,267) (*)39,406
(Table continued)
Renewable
energy Water Other Adjustments Consolidated
(Unaudited)
NIS thousands
Total
external
revenues 37,061 26,894 - - 2,270,358
Inter-segment
revenues - - - (60,401) -
Total
revenues 37,061 26,894 - (60,401) 2,270,358
Segment
profit (loss)
before
income tax (18,355) (8,622) (*)(2,523)(*)(86,061) 237,766
(*) Reclassified
Operating Segments (cont'd)
For the three month period ended June 30, 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 762,811 257,666 200,365 708 82,353
Inter-segment
revenues - 104,546 1,738 - -
Total
revenues 762,811 362,212 202,103 708 82,353
Segment
profit (loss)
before
income tax 139,209 9,811 70,904 52,206 29,018
(Table Continued)
Renewable
energy Water Other Adjustments Consolidated
(Unaudited)
NIS thousands
Total
external
revenues 23,144 9,208 - - 1,336,255
Inter-segment
revenues - - - (106,284) -
Total
revenues 23,144 9,208 - (106,284) 1,336,255
Segment
profit (loss)
before
income tax (5,581) (5,983) (4,171) (75,720) 209,693
For the three month period ended June 30, 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 665,611 339,724 144,082 2,043 -
Inter-segment
revenues - 25,510 2,003 - -
Total
revenues 665,611 365,234 146,085 2,043 -
Segment
profit (loss)
before
income tax 120,220 8,612 52,555 (15,921) (*)18,745
(Table Continued)
Renewable
energy Water Other Adjustments Consolidated
(Unaudited)
NIS thousands
Total
external
revenues 15,884 14,847 - - 1,182,191
Inter-segment
revenues - - - (27,513) -
Total
revenues 15,884 14,847 - (27,513) 1,182,191
Segment
profit (loss)
before
income tax (6,214) (6,537) (*)(2,426) (*)(67,443) 101,591
(*) Reclassified
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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