Shikun & Binui Announces Fourth Quarter and Full Year 2009 Results
By Shikun Binui Ltd., PRNETuesday, March 23, 2010
Gross Profit for Year 2009 Totaled NIS 883 Million, with Growth of 32% Compared with 2008
RAMAT GAN, Israel, March 24, 2010 - 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 fourth quarter
and full year 2009 ended December 31, 2009.
"We are summarizing a year of prosperous and profitable
activity in all of the Group's growth engines. A wealth of experience in our
growth engines, focus and professionalism combined with financial strength,
will enable us to continue implementation of the strategy and creation of
value for the Group's shareholders," commented Mr. Ofer Kotler, Chief
Executive Officer of Shikun & Binui. "Our sustainability vision will continue
to serve as a central growth driver to our operations. We believe that our
unique investment in creating a leading position in the sustainability world
will create real value for the Group going forward."
As of January 1, 2009 the Company started recording its
results based on the following business segments: Infrastructure and
construction outside of Israel, Infrastructure and construction in Israel,
Real Estate Development in Israel, Real Estate Development outside of Israel,
Concessions, Environment and Others.
Main Events of the Fourth Quarter and Subsequent to it:
- As part of the Group's strategy to leverage its ability to
enter new markets, the Group, through the subsidiary (100%) Shikun &
Binui SBI Infrastructure, commenced operations in a new country in
which it had not operated until now: Azerbaijan. In this country,
Shikun & Binui SBI Infrastructure signed a $337 million contract to
design, rehabilitate and pave a 156-kilometer highway. The contract
period is estimated at three years.
- The Group, through its subsidiary (100%) Shikun & Binui SBI
Infrastructure, signed a $230 million contract in Guatemala, to design,
pave and maintain a 300-kilometer highway in the north of the country
- Franja Transversal Del Norte. The work will continue for 3.5 years,
and the Company will maintain the highway for ten subsequent years.
- The subsidiary (100%) Shikun & Binui SBI Infrastructure,
paid a dividend of NIS156 million in the fourth quarter and a dividend
total of NIS 770 million in 2009 to the Company.
- The Group, through a subsidiary, (100%) Solel Boneh Israel
won the Ma'atz tender to rehabilitate, operate and maintain roads in
Israel for twenty years, by the PFI method. The total payments expected
over the life of the project are estimated at NIS 1.3 billion.
- The Group, through the subsidiary (100%) Solel Boneh Israel
was awarded the tender to design, build and maintain the Tel Aviv Hall
of Justice for a 20-year period. The BOT project includes the
construction of a new building, underground parking and additional
projects. In consideration for construction of the building, the company
will receive a construction grant of NIS 165 million; in addition, for
the 20 years of maintenance.
- The Group's orders backlog in the construction and infrastructure
segment totals NIS 7.8 billion as of 31.12.09, an increase of
26% compared with 2008.
- In 2009, Shikun & Binui Real Estate sold in Israel 931
housing units totaling NIS 1,104 million. In the fourth quarter,
Shikun & Binui Real Estate sold 210 housing units totaling
NIS 249 million.
- Shikun & Binui Real Estate is a leader in the field of green
construction in Israel, as part of the Shikun & Binui Group's strategy
to create a sustainable environment. The Company is the first to obtain
certification from the Standards Institute for "Green Buildings"
(Israel Standard Certification 5281 for green buildings with reduced
damage to the environment) in the "Pure Netanya East" and "Carcour
Dreams" projects. The company expects to get premium prices over the
long term due the unique investment and leadership in building a
sustainable environment.
- Receipt of the green certification from the Standards
Institute constitutes an additional milestone for solidification of
Shikun & Binui Real Estate's position as a leader, advancing the field
of green construction in Israel.
- The subsidiary Shikun & Binui Real Estate allotted to
institutional investors 12.946% of its share capital in consideration
for NIS 290 million. This allotment reflects an after-the-money value
for Shikun & Binui Real Estate of NIS 2.25 billion and a profit of
130 million NIS for the group.
- The Group, through the subsidiary Shikun & Binui Environment (100%),
signed several agreements for options for the purchase and rental of
properties and roofs for the purpose of building a solar farm in
moshavim and kibbutzim, at a future investment of NIS 600 million.
These agreements realize the Group's strategy of leadership in the
field of renewable energy in Israel and worldwide.
- The Group successfully completed an offer to exchange Series
2 debentures for Series 4 debentures. 40% of the total Series 2
debentures outstanding were exchanged, in consideration for NIS
492 million par value of Series 4 debentures.
Fourth Quarter 2009 Results
Revenues from projects and sales totaled NIS 1.1 billion,
similar to the fourth quarter of 2008.
Gross profit totaled NIS 210 million (19.2% of revenues),
growth of 52% compared with Q4 of 2008 (12.3% of revenues). The growth was
driven mainly by the real estate development in Israel segment - growth of
86% in gross profit - resulting mainly from the sale of land. Gross profit of
the infrastructure and construction outside of Israel segment rose by 11%, as
a result of the completion of projects and the settling of final accounts, as
well as an increase of 31.2% in the gross profit of the infrastructure and
construction in Israel segment.
General and administrative expenses totaled NIS 81 million,
representing 7.4% of sales.
Operating income totaled NIS 233 million, compared with NIS 56
million in the fourth quarter of 2008, driven mainly by a profit of NIS 130
million derived from the issuances of shares in Shikun and Binui Nadlan as
well as the increase in the operating income of the real estate development
in Israel segment.
Financing costs net totaled NIS 37 million in the quarter.
Company's equity in losses of investees accounted for by the
equity method totaled a loss of NIS 20 million, deriving entirely from
accounting changes in the value of the State's option in Derech Eretz.
Net income totaled NIS 133 million, compared with NIS 11
million in the fourth quarter last year. The growth was due to the gain of
NIS 130 million recognized by the Company with the allotment of 12.95% of the
shares of Shikun & Binui Real Estate, by Shikun & Binui Real Estate, to
institutional investors, which was offset in part by losses from the change
in value of the State's option in Derech Eretz of NIS 20 million.
Cash flows from operating activities increased in the quarter
to NIS 333 million.
Key Annual Results
Revenues from projects and sales totaled NIS 4.5 billion, similar to
revenues in 2008. Revenues from the infrastructure and construction outside
of Israel segment grew by 11% compared with 2008, totaling NIS 2.2 billion.
The growth was driven by the strengthening exchange rate of the dollar and
final settlements of accounts in projects. Revenues of the infrastructure and
construction in Israel segment totaled NIS 1.44 billion, similar to 2008;
revenues of the real estate development in Israel segment decreased by 3%
compared with 2008, totaling to NIS 813 million.
Gross profit totaled NIS 883 million (19.8% of revenues), growth of 32%
compared with gross profit in 2008 (15% of revenues). Most of the growth was
driven by the infrastructure and construction outside of Israel segment -
growth of 32% - due to the increase in the number of projects in which the
Group is involved, to the mix of projects and completion of the settlements
of accounts of projects that were completed. Growth of 16% and 17% were
posted in the gross profit of the infrastructure and construction in Israel
segment and the real estate development in Israel segment, respectively. The
growth in the gross profit of the real estate development in Israel segment
was driven mainly by four sales of properties and land.
General and administrative expenses totaled NIS 269 million, a change of
6% compared with 2008. Most of the change was caused by the Company's
expanding operations and the associated increase in employees costs as well
as the tenders for large projects and the resultant costs.
Operating income totaled NIS 707 million, growth of 77% compared with
2008. The growth was driven by the infrastructure and construction outside of
Israel segment and the real estate development in Israel segment, by 32% and
63%, respectively. The yearly operating profit included a total of NIS 130
million resulting from the institutional allocation of subsidiary shares.
Net financing costs totaled NIS 261 million, compared with NIS 249
million in 2008. The increase was driven by the Group's financing expenses
overseas, caused by an exchange rate loss in the Group's countries of
operation. The Group was in most cases compensated for these losses by the
parties who ordered the projects. The financing expenses attributed to Israel
decreased by NIS 15 million, driven by this year's lower increase in the
Consumer Price Index than last year's increase.
Company's equity in income/losses of investees accounted for by the
equity method totaled a loss of NIS 67 million, attributable mainly to the
effect of the State's option on the results of Derech Eretz. In 2008, the
Group recorded income in this item of NIS 21 million, which included a gain
of NIS 43 million attributed to the effect of the State's option on the
results of Derech Eretz. Also included in this item in 2009 were income from
the partnership building Segment 18 of the Trans Israel Highway and losses of
jointly-controlled foreign investees and investees in the concession segment.
Net income totaled NIS 232 million, compared with NIS 90 million last
year, deriving from, among others, the NIS 130 million gain recognized by the
Company upon the allotment by Shikun & Binui Real Estate to institutional
investors of 12.94% of the shares of Shikun & Binui Real Estate, which was
offset in part by the losses from the change in value of the State's option
in Derech Eretz of NIS 67 million.
Company's cash flows from operating activities totaled NIS 618 million.
In 2008, cash flows from operating activities totaled NIS 407 million.
The Group does not revalue its investment properties and they are stated
in the financial statements on the basis of historical cost.
Shareholders' equity as of December 31, 2009 totaled NIS 508 million,
compared with NIS 192 million at the end of 2008. Most of the increase
derived from the year's income (NIS 232 million) and the increase in the
minority interest (NIS 155 million) and was due to the allotment of a
subsidiary's shares to institutional investors, as well as to translation
adjustments of the financial statements of foreign subsidiaries (NIS 12
million), which are prepared mainly in the dollar and euro, and net of the
dividend paid to shareholders (NIS 98 million).
Credit - during the year, the Group repaid NIS1,181 million in credit and
paid interest of NIS 220 million. During this period, the Group received
credit totaling NIS 442 million and raised NIS 197 million in an issuance of
debentures bearing fixed shekel interest.
The Group has cash and cash equivalent balances totaling NIS 1,180
billion and unutilized credit facilities totaling NIS 588 million.
Net credit to the company as of 31.12.2009 totaled NIS 2,267 million.
Working capital of the Group totaled NIS 485 million, compared with NIS
380 million at the end of 2008.
Total assets amount to NIS 7.4 billion.
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 Annual Statement of Financial Position as at
In Thousand NIS December 31 December 31
2009 2008
Assets
Cash and cash equivalents 1,180,517 1,348,846
Bank deposits 170,226 44,001
Short-term loans and investments 63,915 34,974
Short-term loans to investee companies 331,304 318,598
Trade receivables - accrued income 872,670 822,029
Receivables and debit balances 166,902 200,954
Other investments, including derivatives 2,619 11
Current tax assets 72,107 90,631
Inventory 199,234 192,364
Inventory of buildings held for sale 1,021,668 926,311
Assets classified as held for sale 8,065 -
Total current assets 4,089,227 3,978,719
Non-current inventory of land (freehold) 478,425 497,466
Non-current inventory of land (leasehold) 198,620 197,506
Investment property, net 292,165 300,071
Land rights 16,975 16,478
Long-term prepaid expenses 42,657 45,118
Receivables, loans and deposits 406,653 513,694
Investments in equity-accounted investees 138,572 151,746
Loans to investee companies 618,270 561,368
Deferred tax assets 116,498 119,115
Receivables - financial asset 68,109 6,861
Property, plant and equipment, net 805,829 769,896
Intangible assets, net 101,459 90,794
Total non-current assets 3,284,232 3,270,113
Total assets 7,373,459 7,248,832
<end_table>
Shikun & Binui Ltd.
Condensed Consolidated Annual Statement of Financial Position as at
(cont.)
Balance Sheet (cont.)
In Thousand NIS December 31 December 31
2009 2008
Liabilities
Short-term credit from
banks and others 879,586 1,116,352
Subcontractors and
trade payables 683,040 608,611
Short-term employee
benefits 35,982 45,390
Payables and credit
balances including
derivatives 289,917 260,436
Current tax
liabilities 95,445 72,732
Provisions 303,631 315,129
Payables - customer
work orders 750,958 727,490
Advances received from
customers 565,072 453,295
Total current
liabilities 3,603,631 3,599,435
Liabilities to banks
and others 1,129,821 1,385,385
Debentures 1,912,160 1,852,308
Employee benefits 140,703 139,323
Deferred tax
liabilities 15,299 16,906
Provisions 24,654 26,625
Excess of accumulated
losses over cost of
investment and
deferred credit
balance in affiliated
companies 39,056 36,653
Total non-current
liabilities 3,261,693 3,457,200
Total liabilities 6,865,324 7,056,635
Equity
Total equity
attributable to equity
holders of the Company 351,003 183,252
Minority interest 157,132 8,945
Total equity 508,135 192,197
Total equity and
liabilities 7,373,459 7,248,832
Shikun & Binui Ltd.
Condensed Consolidated Annual Statements of Income
Income Statement
for the for the for the
twelve twelve twelve
months months months
ended ended ended
December December December
In thousands NIS 31 31 31
2009 2008 2007
Revenues from work performed and sales 4,453,729 4,446,828 4,109,213
Cost of work performed and sales 3,570,666 3,778,464 3,516,423
Gross profit 883,063 668,364 592,790
Gain on sale of investment property 10,978 20,895 27,014
Selling and marketing expenses -25,147 -23,598 -25,670
Administrative and general expenses -268,704 -253,765 -247,095
Other operating income 135,565 72,114 22,954
Other operating expenses -28,690 -85,211 -34,303
Operating income 707,065 398,799 335,690
Financing income 132,726 156,074 154,862
Financing expenses -393,437 -405,306 -335,021
Net financing expenses -260,711 -249,232 -180,159
Company's share in income of equity
accounted investees -66,981 20,677 25,222
Income before taxes on income 379,373 170,244 180,753
Taxes on income -147,232 -80,554 -90,861
Net income for the period 232,141 89,690 89,892
Attributable to:
Equity holders of the Company 237,337 91,762 88,537
Minority interest -5,196 -2,072 1,355
232,141 89,690 89,892
Basic and diluted earnings
per share (in NIS) 0.602 0.233 0.224
Number of shares used in the computation
of earnings per share (in thousands) 394,545 394,545 394,545
* Reclassified
Shikun & Binui Ltd
Business Operating Segments
Business Segments
In thousands NIS
the year ended December 31, 2009
Infrastructure Infrastructure Real Estate Real Estate
and Building, and Building, Development, Development,
Oversees Israel Israel Oversees
Revenues from
external 2,199,644 1,317,155 804,830 6,544
Revenues between
sectors 0 119,444 8,295 0
Total revenues 2,199,644 1,436,599 813,125 6,544
Net sector income
(loss) before tax 365,997 9,206 181,112 -58,482
Continues below..
Concessions Environment Others Adjust. Consolidated
Revenues from
external 0 125,786 -230 0 4,453,729
Revenues between
sectors 0 0 0 -127,739 0
Total revenues 0 125,786 -230 -127,739 4,453,729
Net sector income
(loss) before tax -43,349 -19,003 -9,201 -46,907 379,373
the year ended December 31, 2008
Infrastructure Infrastructure Real Estate Real Estate
and Building, and Building, Development, Development,
Oversees Israel Israel Oversees
Revenues from
external 1,985,411 1,382,463 832,846 17,037
Revenues between
sectors 0 93,642 7,916 0
Total revenues 1,985,411 1,476,105 840,762 17,037
Net sector income
(loss) before tax 332,666 19,460 98,979 -66,060
Continues below...
Concessions Environment Others Adjust. Consolidated
Revenues from
external 0 129,646 99,425 0 4,446,828
Revenues between
sectors 0 0 1,766 -103,324 0
Total revenues 0 129,646 101,191 -103,324 4,446,828
Net sector income
(loss) before tax 15,023 -12,048 -57,934 -159,842 170,244
* Reclassified
the year ended December 31, 2007
Infrastructure Infrastructure Real Estate Real Estate
and Building, and Building, Development, Development,
Oversees Israel Israel Oversees
Revenues from
external 1,867,206 1,161,772 682,485 48,951
Revenues between
sectors 0 164,503 7,704 0
Total revenues 1,867,206 1,326,275 690,189 48,951
Net sector income
(loss) before tax 305,344 -7,025 69,826 -3,228
Continues below...
Concessions Environment Others Adjust. Consolidated
Revenues from
external 0 123,412 225,387 0 4,109,213
Revenues between
sectors 0 0 8,698 -180,905 0
Total revenues 0 123,412 234,085 -180,905 4,109,213
Net sector income
(loss) before tax 24,353 -7,062 -19,300 -182,155 180,753
* Reclassified
Company Contact: Investor Relations Contacts:
Doron Blachar, CFO Ehud Helft / Porat Saar
Shikun & Binui GK Investor Relations
Tel: +972-3-630-1518 Tel: +1-646-233-2161/ +972-52-776-3687
email: info@gkir.com
Tags: Israel, March 24, Ramat gan, Shikun & Binui Ltd.
