Tethys Sea weighs on Delek Group profit
The company reported on Wednesday that net income attributable to shareholders was down 48%, to NIS 110 million.
Profit at Delek Group in the first quarter fell by nearly half from the same time last year, as production and earnings at its Tethys Sea gas field dropped.
The company reported on Wednesday that net income attributable to shareholders was down 48%, to NIS 110 million, due to lower revenues from the waning reserves at Tethys Sea and to posting of surcharges on oil and gas profits, imposed in accordance with Sheshinski Committee recommendations.
Another factor skewing the comparison with the parallel quarter was last year's nonrecurring capital gain from the NIS 177 million sale of Noble Energy shares. Weakness in the European and Israeli markets also weighed on results for the group, controlled by Yitzhak Tshuva and managed by Asaf Bartfeld.
The largest contribution to earnings was NIS 115 million from the group's U.S. fuel operations through Delek U.S. Holdings. Vehicle operations in Israel contributed another NIS 54 million.
Shares of Delek finished up 5.7% in Tel Aviv Stock Exchange trading yesterday, after declining 3.4% the day before.
Roadchef, which supplies roadside services in Britain, generated NIS 15 million in EBITDA for Delek Group during the quarter but, saddled with high financing charges on bank loans, ended the quarter with a NIS 25 million loss, compared with NIS 22 million in losses in the same quarter last year.
Delek's insurance activity in the U.S. continued to flounder, ending the quarter with an unimpressive NIS 2 million profit.
Delek Group's net financial debt at the end of March was estimated at NIS 7 billion, with liabilities on bonds reaching NIS 8.4 billion. Although the group, on an unconsolidated basis, has negative working capital measuring NIS 1.1 billion, it isn't expected to experience any liquidity difficulties.
An approximate NIS 1 billion in liabilities payable to banks and bondholders through the end of 2012 appear adequately covered by the company's NIS 1.4 billion in cash and equivalents.
Next year Delek is scheduled to discharge liabilities totaling NIS 1.1 billion, which are expected be covered by recovered owners' loans extended to subsidiaries, dividend payments, and bank loans.
If Delek Real Estate, its sister company, finalizes a settlement with its bondholders, Delek Group will try refinancing debt in the non-bank credit market.