Delek Group is a highly leveraged company, and financing costs hurt it in the last quarter of 2007. The company, which is controlled by energy and real estate baron Yitzhak Tshuva, netted only NIS 47 million in the quarter, in part also due to higher outlays on sales and marketing.
On the other hand, Delek Group revenues grew by 43% last year to NIS 34.5 billion, in part thanks to its purchase of the RoadChef motorway services chain in Britain, which contributed NIS 2.2 billion in revenues.
The cost of revenues rose by less than overall revenues, boosting gross profits by 60.6%, to NIS 4.66 billion.
Thanks to comparatively moderate increases in sales and marketing expenses, as well as in administrative and general expenses, operating profits swelled by 68.9%, to NIS 2.58 billion. But these additional operating profits were almost completely offset by a similar increase in financing expenses, such that operating profits after the deduction of financing expenses were similar to 2006: NIS 999 million in 2007, compared to NIS 976 million the previous year.
The cost of CEO Asi Bartfeld's salary totaled NIS 5.7 million, half of which was wages and the other half fringe benefits. Board chairman Gabriel Last cost Delek NIS 5 million: NIS 2.7 for his salary and NIS 2.3 million for fringe benefits.
As for its outlay on interest, simply, Delek Group borrowed heavily to cover acquisitions. Improved profitability in certain other departments, however, after the company merged and streamlined operations, helped counter the effect of the financing costs on the bottom line.