Shikun & Binui Announces Fourth Quarter and Full Year 2010 Results
By Shikun Binui Ltd., PRNEMonday, March 28, 2011
2010 fourth quarter revenues increased by 13.8%, totaling NIS 1.2 billion
RAMAT GAN, Israel, March 29, 2011 - 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
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 at ccgisrael.com
Tags: Israel, March 29, Ramat gan, Shikun & Binui Ltd.