Shikun & Binui Announces Fourth Quarter and Full Year 2010 Results
RAMAT GAN, Israel, March 29, 2011 /PRNewswire/ --
- 2010 fourth quarter revenues increased by 13.8%, totaling NIS 1.2 billion
- Gross Margin increased to 22.7% in fourth quarter 2010, compared with 19.2% in fourth quarter 2009 and amounted to NIS 283 million
- Backlog in Construction & Infrastructure as of December 31, 2010 totaled NIS 8.7 billion, 12% higher than year-end 2009
Shikun & Binui Ltd. (TASE: SKBN.TA) ("Shikun & Binui" or the "Group" or "Company"), a member of the Arison Group and Israel's leading infrastructure and real estate company, announced today its results for the fourth quarter and full year 2010, ended December 31st, 2010.
"2010 was characterized by extensive activity in all of the Group's growth drivers. The Company has demonstrated a steady increase in its activities and profitability and continues to focus on implementing its strategy, further strengthening the balance sheet and creating shareholder value," commented Mr. Ofer Kotler, Chief Executive Officer of Shikun & Binui.
Main Events of the Fourth Quarter and Subsequent to it:
- The Group, along with a Siemens Group company, in equal shares, has filed a tender offer to build a thermo-solar power plant, totaling 110 megawatts. The tender amount is estimated at billions of Shekels. The project is in line with the Group's strategy, which champions the values of sustainability, which defined the thermo-solar energy field as a key growth engine for the Group in the coming years.
- As part of the Group's strategy to leverage its capabilities to enter new markets, Shikun & Binui, through its wholly owned subsidiary, Solel Boneh Infrastructure (SBI), has signed a contract with the Tanzanian government to rehabilitate a 120 km highway. The project will last approximately two and a half years and is expected to generate revenues of $50 million.
- The Group, through its subsidiary, SBI, won 50% of a BOT project to build the main training center of the Israel Police, which includes offering operational services, maintenance and training for 25 years. The project, including the construction phase, is expected to generate approximately NIS 1.8 billion. The tender results were appealed.
- The Group merged its income-producing real estate activities in Germany with the ADO Group and will become the largest shareholder of that company (48%). Following the deal ADO will own properties in Berlin totaling NIS 900 million. This deal will further help the Company leverage additional real estate market opportunities in Germany.
- The Group completed the acquisition of 12.5% of the shares of Derech Eretz, the concessioner of Highway 6, reaching a 50% stake. The Company also signed a joint control agreement with the Israel Infrastructure Fund, which also holds a 50% stake of Derech Eretz. This is consistent with the Group's strategy of being a leading player in the infrastructure market.
- As of December 31, 2010, the Group's orders backlog in the Construction and Infrastructure segment totaled NIS 8.7 billion, an increase of 12% compared with the end of 2009. NIS 6.6 billion of the backlog came from operations outside of Israel.
- During the course of 2010, Shikun & Binui Real Estate (RE) sold 1,142 apartments and lots totaling NIS 1.5 billion. In the fourth quarter of 2010, the Company sold 200 apartments and lots totaling NIS 288 million. Concurrently, the RE acquired land with potential to develop approximately 2,500 units in Hadera and Tsur Yitzhak, Israel.
Fourth Quarter 2010 Results
- Revenues from Projects and Sales totaled NIS 1.2 billion this quarter, an increase of 13.8% compared with Q4 2009.
- Revenues from the Construction and Infrastructure Outside of Israel Segment totaled NIS 581 million, a 16.2% increase compared with Q4 2009. The increase can be mainly attributed to commencing operations in a new country - Azerbaijan. A decline in the dollar/shekel exchange rate detracted NIS 25 million from the Group's total revenues and particularly from this segment in the fourth quarter.
- Revenues from the Construction and Infrastructure in Israel Segment totaled NIS 410 million, increasing 18.2% compared with the Q4 last year.
- Revenues from the Concession Segment totaled NIS 55 million and resulted from the commencement of the Build-Operate-Transfer (BOT) project to renovate and maintain roads in Northern Israel.
- Revenues from the Real Estate Development in Israel Segment saw a slight decline (NIS 232 million, compared with NIS 241 million in the Q4 2009). In this segment, revenue is recognized when the apartment is handed over and not when it is sold. In the fourth quarter of 2010, less apartments were handed over than in Q4 last year.
Gross Profit totaled NIS 283 million (22.7% of revenues), increasing 34.7% when compared with Q4 2009 (19.2% of revenues).
Most of the increase resulted from expansion of SBI activities in Azerbaijan as well as an increase in the gross profit of the Real Estate Development in Israel segment.
General and administrative expenses totaled NIS 96 million (7.3% of revenues), compared with NIS 81 million in Q4 2009 (7.4% of revenues). The increase can be attributed to higher salary expenses due to recognition of the benefits from stock options to employees and officers and bonuses, the modification of the organizational structure for volumes of activity abroad as well as the entry into new markets and marketing campaigns.
Other Income, net totaled NIS 238 million and mainly included NIS 256 million, attributed to the revaluation of the investment in Derech Eretz, concessioner of Highway 6. In the corresponding quarter last year, the Company's Other Income, net totaled NIS 108 million, resulting mainly from the allotment of 13% of the shares of Shikun & Binui Real Estate to institutional investors, generating a gain of NIS 130 million.
Operating Income totaled NIS 416 million (33.4% of revenues), an increase of 78.5% compared with NIS 233 million in Q4 2009 (21.3% of revenues). After neutralizing "other income" in the fourth quarter in both years, 2009 and 2010, operating income in Q4 2010 totaled NIS 178 million (14.3% of revenues), an increase of 42.4% compared with NIS 125 million (11.4% of revenues) in Q4 2009.
Financing costs net totaled NIS 44 million, an increase of 19% when compared with Q4 2009. This increase is attributed to an increase of 0.65% in the CPI, compared with the fourth quarter in 2009 when it increased by only 0.2%.
Company's share in the results of investee companies totaled a loss of NIS 37 million, compared with a loss of NIS 20 million in Q4 2009. The increase is mainly attributed to an impairment provision for the Gilz project in, Spain, in which the Company holds 50%
Net income for Q4 2010 totaled NIS 295 million, compared with a net loss of NIS 133 million in Q4 2009. In both of these quarters Net Income was impacted by Other Income: In Q4 2010, NIS 238 million was mainly due to the revaluation of the investment in Derech Eretz, concessioners of Highway 6. In the Q4 2009, NIS 108 million resulted mainly from the allotment of 13% of the shares of Shikun & Binui Real Estate to institutional investors. When neutralizing these two events, Net Income totaled NIS 57 million in Q4 2010, compared with NIS 25 million in the fourth quarter last year.
Shareholders' equity as of December 31, 2010 totaled NIS 875 million compared with NIS 508 million on December 31, 2009, after a dividend distribution of NIS 110 million.
Highlights - 2010
Revenues from Projects and Sales totaled NIS 4.87 billion, increasing by 9.4% compared with 2009.
- Revenues of the Infrastructure and Construction Outside of Israel Segment totaled NIS 2.5 billion, growth of 13.6% compared with 2009. The decrease in the dollar/shekel exchange rate reduced the Group's revenues by NIS 138 million, particularly revenues from this operating segment in 2009.
- Revenues from the Infrastructure and Construction in Israel Segment totaled NIS 1.5 billion, growth of 4.4% compared with 2009.
- Revenues of the Real Estate Development in Israel Segment totaled NIS 827 million, compared with NIS 813 million in 2009. This year, the number of Shikun & Binui Real Estate apartments occupied decreased (442 units compared with 475 residential units, for which revenue was recognized in 2009). Contrarily, the amount of lots and properties sold increased. The Group's decision to accelerate the pace of apartment sales is expected to be expressed in the coming years.
- The Concessions Segment posted revenues of NIS 127 million, with the start of the BOT projects for renovation and maintenance of highways in Northern Israel.
Gross profit totaled one billion shekels (21% of revenues), an increase of 14% compared with 2009 (20% of revenues). Gross profit was driven mainly by the Infrastructure and Construction Outside of Israel Segment, resulting from the increase in volume of activity and completion of accountings for projects that were completed.
General and administrative expenses totaled NIS 316 million (6.5% of revenues), an increase of 17.4% compared with 2009 (6% of revenues), deriving mainly from salary increases, recognition of a benefit for stock options, bonuses, expansion of activity in the renewable energy segment and modification of the organizational structure for the expansion of overseas activities and marking activities.
Other operating income totaled NIS 223 million compared with a total of NIS 107 million in 2009. Most of the income is due to the revaluation of the holdings in Derech Eretz, concessioner of Highway 6.
Operating income totaled NIS 901 million (18.5% of revenues), an increase of 27.4% compared with 2009 (15.85% of revenues).
Net financing costs totaled NIS 169 million, compared with NIS 261 million in 2009. 50% of the decrease originates in hedges for part of the Group's foreign currency exposure. Also contributing to the decrease was the reduction in long-term financing expenses, which were positively affected by the smaller increase in the CPI this year than in 2009.
The loss from investee companies, net totaled NIS 43 million, compared with NIS 67 million in 2009. The loss was positively affected by the decrease in the loss due top revaluation of the State's option on the results of Derech Eretz.
Net income amounted to NIS 545 million, compared with NIS 232 million in 2009. After neutralizing the revaluation of Derech Eretz in 2010 and the sale of shares of Shikun & Binui Real Estate shares to institutional investors in 2009, net income in the years 2010 and 2009 amounted to NIS 289 million and NIS 102 million, respectively - an increase of 183%.
Cash flow from operating activities totaled NIS 733 million in 2010, an increase of 18% over last year.
The Group invested in the Renewable Energy Segment - The Group plans to expand and intensify its activities in the renewable energy segment as part of the realization of its strategy.
Working capital totaled NIS 954 million in 2010, compared with NIS 506 million at the end of 2009.
The Company has cash and cash equivalents balances totaling NIS 1.4 billion and unutilized credit facilities totaling NIS 673 million.
Doron Blachar, the Shikun & Binui Group's CFO said: "The Group is constantly improving its financial strength. EBITDA in 2010 exceeded one billion shekels, an increase of 96% compared with 2008. The financial parameters presented by the Group improve from year to year and our ability to generate cash from operations will enable further expansion of the projects in which the Group is involved and realization of the business strategy that will lead to steady profit growth in the Group's businesses."
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
2010 2009
NIS thousands NIS thousands
Assets
Cash and cash equivalents 1,357,613 1,180,517
Bank deposits 420,937 170,226
Short-term loans and investments 82,681 63,915
Short-term loans to investee companies 252,704 331,304
Trade receivables - accrued income 776,145 872,670
Inventory of buildings held for sale 1,390,397 1,021,668
Receivables and debit balances 291,803 (1) 166,744
Other investments, including derivatives 784 2,619
Current tax assets 61,431 72,107
Inventory 238,015 199,234
Assets classified as held for sale 13,478 8,065
Total current assets 4,885,988 4,089,069
Receivables in respect of concession
arrangements 223,581 (*) 72,814
Non-current inventory of land (freehold) 443,956 478,425
Non-current inventory of land (leasehold) 164,672 198,620
Investment property, net 286,936 (1) 317,574
Land rights 17,163 (*) 16,553
Long-term prepaid expenses 4,798 (1) 2,868
Receivables, loans and deposits 140,721 406,653
Investments in equity-accounted investees 399,311 138,572
Loans to investee companies 862,079 618,270
Deferred tax assets 103,201 116,498
Property, plant and equipment, net 923,617 (1) 820,789
Intangible assets, net 97,964 (*) 94,356
Total non-current assets 3,667,999 3,281,992
Total assets 8,553,987 7,371,061
(*) Reclassified
(1) Retrospective implementation
Shikun & Binui Ltd.
Consolidated Statements of Financial Position as at (cont'd)
December 31 December 31
2010 2009
NIS thousands NIS thousands
Liabilities
Short-term credit from banks and others 648,790 879,586
Subcontractors and trade payables 844,063 (*)717,936
Short-term employee benefits 38,367 35,982
Payables and credit balances including derivatives 490,570 (*)305,936
Current tax liabilities 80,193 (*)76,978
Provisions 238,862 (*)247,147
Payables - customer work orders 718,588 750,958
Advances received from customers 872,999 (*)568,243
Liabilities classified as held for sale
Total current liabilities 3,932,432 3,582,766
Liabilities to banks and others 1,277,079 1,129,821
Debentures 2,196,502 1,912,160
Employee benefits 148,370 140,703
Deferred tax liabilities 33,682 (*)33,766
Provisions 36,372 24,654
Excess of accumulated losses over cost of investment
and deferred credit balance in investee companies 54,267 39,056
Total non-current liabilities 3,746,272 3,280,160
Total liabilities 7,678,704 6,862,926
Equity
Total equity attributable to equity holders
of the parent company 736,255 351,003
Non-controlling interests 139,028 157,132
Total equity 875,283 508,135
Total liabilities and equity 8,553,987 7,371,061
(*) Reclassified
Shikun & Binui Ltd.
Consolidated Statements of Income for the Year Ended
December 31 December 31 December 31
2010 2009 2008
NIS thousands NIS thousands NIS thousands
Revenues from work performed and 4,871,077 4,453,729 4,446,828
sales
Cost of work performed and sales 3,864,630 3,570,666 3,778,464
Gross profit 1,006,447 883,063 668,364
Gain on sale of investment property 14,816 10,978 20,895
Selling and marketing expenses (27,733) (25,147) (23,598)
Administrative and general expenses (316,305) (268,704) (253,765)
Other operating income 261,558 135,565 72,114
Other operating expenses (38,192) (28,690) (85,211)
Operating profit 900,591 707,065 398,799
Financing income 216,140 132,726 156,074
Financing expenses (384,657) (393,437) (405,306)
Net financing expenses (168,517) (260,711) (249,232)
Share of profits (losses) of equity
accounted investees (net of tax) (42,635) (66,981) 20,677
Profit before taxes on income 689,439 379,373 170,244
Taxes on income (144,336) (147,232) (80,554)
Net profit for the period 545,103 232,141 89,690
Attributable to:
Equity holders of the Company 523,468 237,337 91,762
Non-controlling interests 21,635 (5,196) (2,072)
545,103 232,141 89,690
Basic and diluted earnings per
share
(in NIS) 1.33 0.60 0.23
Diluted earnings per share (in NIS)
1.32 - -
Shikun & Binui Ltd.
Consolidated Statements of Changes in Equity
Adjustments
from
Reserve for Reserve translation
distribution for of
Share Share of bonus hedging financial
capital premium shares transactions statements
(1)
NIS thousands
Balance as at
January 1, 2008 507,947 75,003 63,393 (5,945) (58,438)
Net profit for - - - - -
the period
Other - - - (5,203) (8,065)
comprehensive
loss for the
period
Decline in rate - - - - -
of holding in
subsidiary
Benefit in
respect of
issuance of
options
to officers - - - - -
(see Note 34G)
Balance as at
December 31,
2008 507,947 75,003 63,393 (11,148) (66,503)
Net profit for - - - - -
the period
Other - - - 9,977 11,708
comprehensive
income for the
period
Elimination of
non-controlling
interests
following - - - - -
withdrawal from
consolidation
Non-controlling
interests in
respect of
issuance of - - - - -
shares of a
subsidiary
Benefit in
respect of
issuance of
options
to officers - - - - -
(see Note 28.C.
and 34.G.) - 2,035 - - -
Expiry of
options to
former officer
Dividend paid - - - - -
(see Note 37H)
Balance as at 507,947 77,038 63,393 (1,171) (54,795)
December 31,
2009
Net profit for
the period - - - - -
Other
comprehensive
loss for the
period - - - (5,968) (44,835)
Dividend from
subsidiary to
non-controlling
interests - - - - -
Benefit in
respect of
issuance of
options to
employees and
officers (see
Note 28.C.and
34.G.) - - - - -
Acquisition of
non-controlling
interests - - - - -
Change in
non-controlling
interests due
to loss
of control in
subsidiary - - - - -
Dividend paid
(see Note
37.H.) - - - - -
Balance as at
December 31,
2010 507,947 77,038 63,393 (7,139) (99,630)
(continued)
Capital
reserve Total
from attrib-
options utable
Company's to equity
to shares holders of Non- Total
employees Accum- acquired the Company controll- equity
and ulated by a ing
officers loss subsidiary interests
NIS thousands
Balance as at
January 1, 2008 4,502 (472,428) (18,081) 95,953 9,260 105,213
Net profit for
the period - 91,762 - 91,762 (2,072) 89,690
Other comprehensive
loss for the
period - - - (13,268) (25) (13,293)
Decline in rate
of holding in
subsidiary - - - - 1,782 1,782
Benefit in respect
of issuance
of options
to officers
(see Note 34G) 8,805 - - 8,805 - 8,805
Balance as at
December 31,
2008 13,307 (380,666) (18,081) 183,252 8,945 192,197
Net profit for
the period - 237,337 - 237,337 (5,196) 232,141
Other
comprehensive
income for
the period - - - 21,685 14 21,699
Elimination of
non-controlling
interests
following withdrawal
from
consolidation - - - - (1,782) (1,782)
Non-controlling
interests in
respect of
issuance of
shares of a
subsidiary - - - - 155,151 155,151
Benefit in
respect of issuance
of options
to officers (see
Note 28.C. and
34.G.) 7,098 - - 7,098 - 7,098
Expiry of options to
former
officer (2,035) - - - - -
Dividend paid
(see Note 37H) - (98,369) - (98,369) - (98,369)
Balance as at
December 31,
2009 18,370 (241,698) (18,081) 351,003 157,132 508,135
Net profit for
the period - 523,468 - 523,468 21,635 545,103
Other comprehensive
loss for the
period - - - (50,803) (326) (51,129)
Dividend from subsidiary to
non-controlling
interests - - - - (42,723) (42,723)
Benefit in respect
of issuance
of options to
employees and
officers (see Note
28.C.and 34.G.) 21,035 - - 21,035 - 21,035
Acquisition of
non-controlling
interests - (244) - (244) 1,355 1,111
Change in
non-controlling
interests due
to loss
of control in
subsidiary - - - - 1,955 1,955
Dividend paid
(see Note 37.H.) - (108,204) - (108,204) - (108,204)
Balance as at
December 31,
2010 39,405 173,332 (18,081) 736,255 139,028 875,283
Operating Segments (cont'd)
For the year ended December 31, 2010
Infrastructures
and Infrastructures Real estate
construction and Real development
outside of construction estate outside of
Israel in Israel development Israel Concessions
in Israel
(Unaudited)
NIS thousands
Total 2,499,738 1,290,923 818,904 6,841 126,926
external
revenues
Inter-segment - 208,491 8,063 - -
revenues
Total 2,499,738 1,499,414 826,967 6,841 126,926
revenues
Segment
profit (loss)
before
income tax 456,919 17,136 239,426 (40,590) 33,273
(continued)
For the year ended December 31, 2010
Renewable Unallocated
energy Water Other Adjustments amounts Consolidated
(Unaudited)
NIS thousands
Total 74,312 53,433 - - - 4,871,077
external
revenues
Inter-segment - - - (216,554) - -
revenues
Total 74,312 53,433 - (216,554) - 4,871,077
revenues
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
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 2,199,643 1,317,154 804,830 6,546 -
external
revenues
Inter-segment - 119,444 8,295 - -
revenues
Total 2,199,643 1,436,598 813,125 6,546 -
revenues
Segment
profit (loss)
before
income tax 365,997 8,967 181,112 (58,482) (12,778)
(*) Reclassified
(continued)
For the year ended December 31, 2009
Renewable Unallocated
energy(*) Water(*) Other Adjustments amounts Consolidated
(Unaudited)
NIS thousands
Total 75,523 50,263 (230) - - 4,453,729
external
revenues
Inter-segment - - - (127,739) - -
revenues
Total 75,523 50,263 (230) (127,739) - 4,453,729
revenues
Segment
profit (loss)
before
income tax (12,635) (6,368)(4,828) 42,980 (124,592) 379,373
(*) Reclassified
Operating Segments (cont'd)
For the year ended December 31, 2008
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 1,985,411 1,382,463 832,846 17,037 -
external
revenues
Inter-segment - 93,642 7,916 - -
revenues
Total 1,985,411 1,476,105 840,762 17,037 -
revenues
Segment
profit (loss)
before
income tax 332,666 19,460 98,979 (66,060) 53,011
(*) Reclassified
(continued)
For the year ended December 31, 2008
Renewable Unallocated
energy(*) Water(*) Other Adjustments amounts Consolidated
(Unaudited)
NIS thousands
Total 72,010 57,636 99,425 - - 4,446,828
external
revenues
Inter-segment - - 1,766 (103,324) - -
revenues
Total 72,010 57,636 101,191 (103,324) - 4,446,828
revenues
Segment
profit (loss)
before
income tax 1,265 (13,313) (59,197) 26,321 (222,888) 170,244
(*) Reclassified
Company Contact:
Doron Blachar, CFO
Shikun & Binui
Tel: +972-3-630-1518
Investor Relations Contacts:
Ehud Helft / Porat Saar
CCG Investor Relations
Tel: +1-646-233-2161 / +972-52-776-3687
email: info@ccgisrael.com
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