Shikun & Binui Announces Second Quarter 2010 Results
By Shikun Binui Ltd., PRNESaturday, August 21, 2010
Net Income totaled NIS 66 million, increasing 59% compared with Q2 2009
RAMAT GAN, Israel, August 22, 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 yesterday its results for the second quarter 2010,
ended June 30th, 2010.
"The Group is continuing to expand the activities of its key businesses,
particularly in infrastructure and construction, both in Israel and abroad.
In addition, the Group is also looking to make significant investments in the
area of renewable energy and water," commented Mr. Ofer Kotler, Chief
Executive Officer of Shikun & Binui.
Main Events of the Second Quarter and Subsequent to it:
- The company increased its stake in Derech Eretz, the concessioner of
road 6, for an investment of NIS 150 million, following this investment
the company will hold 50% of Derech Eretz. The acquisition will be
financed from internal resources.
- The Group's orders backlog in the construction and infrastructure
segment totaled NIS 9.4 billion as of June 30, 2010, an increase of 11%
compared with March 31, 2010 and an increase of 21% compared with
December 31, 2009.
- In the second quarter of the year, Shikun & Binui Real Estate sold 379
units totaling NIS 523 million, and since the beginning of the year it
sold 619 units for total of NIS 811 million. In August, Shikun & Binui
Real Estate sold 50% of its rights in property in the city of Ashkelon
at a pre-tax gain of NIS 35 million (which will not be recognized as
part of the Q2 financial statements).
- The subsidiary, Solel Boneh Israel, began work on the P.F.I project for
the Israeli National Roads Company for the rehabilitation, operation
and maintenance of roads located in the North of Israel for the amount
of NIS 1.7 billion. The closing of the financing of the project
occurred at the end of June 2010.
- Shikun & Binui SBI Infrastructures was awarded a tender to pave a
highway in Nigeria in the amount of $290 million. The rehabilitation
and paving of this project is expected to last 4 years.
Second Quarter 2010 Results
Revenues from Projects and Sales totaled NIS 1.18 billion this quarter,
an increase of 5.2% compared with the second quarter of 2009. International
revenues from the Construction & Infrastructure segment totaled NIS 666
million, increasing by 10.4% compared with corresponding quarter last year.
Fluctuations in the exchange rate between the shekel and the dollar impacted
SBI revenues. In the second quarter of 2009, the average exchange rate was
NIS 4.07 per U.S. dollar while this quarter the average was NIS 3.78. The
effect of this difference resulted in a decrease in the Israeli shekel
reported revenues of about NIS 56 million, compared to the same quarter last
year. Israeli revenues from the Construction & Infrastructure segment totaled
NIS 365 million, increasing 4.9% compared with the corresponding quarter last
year. Revenues from the Real Estate Development segment totaled NIS 146
million compared with NIS 169 million in the corresponding quarter last year,
with the decrease stemming mainly from the timing of recognition of income
from the sale of apartments.
Gross profit totaled NIS 237 million (20% of revenues), increasing 8%
when compared with Q2 of 2009 (19.5% of revenues).
General and administrative expenses totaled NIS 73 million (representing
6.2% of revenues), increasing 25.1% when compared with Q2 of 2009 (5.2% of
revenues). The increase is attributed to organizational changes supporting
the geographical expansion of SBI Infrastructures entry into a new
international market, as part of its strategic plan. Also contributing to the
rise is the increased expenditure growth in initiating renewable energy
projects as well as an advertising campaign.
Operating income totaled NIS 154 million (13% of revenues), compared with
NIS 163 million (14.5% of revenues) in Q2 2009.
Financing costs net totaled NIS 47.5 million, decreasing 46% when
compared with the second quarter of 2009. The decrease in financing expenses
is attributed to a lower increase in the CPI index compared to Q2/2009, which
affected the long-term credit costs, and due to a decrease of the group's
financing costs in foreign currencies.
Company's share in the results of investee companies accounted for by the
equity method totaled a loss of NIS 5 million, compared with an income of NIS
1.4 million in Q2 2009.
Net income amounted to NIS 65.5 million, increasing 59% when compared
with Q2 2009.
Cash flow from operating activities totaled NIS 219 million.
Shareholders' equity totaled NIS 609 million, compared with NIS 508
million on December 31st, 2009. The increase is mainly attributed to first
half profit in the amount of NIS 172 million as well as translation
adjustments which amounted to NIS 34 million, which were partially offset by
a dividend distribution of NIS 108 million.
Total assets amounted to NIS 7.6 billion.
Key Highlights in the First Half 2010
Revenues from Projects and Sales for the first half of 2010 totaled NIS
2.27 billion, compared with NIS 2.34 billion in the same period of 2009. The
decrease is mainly attributed to the Real Estate Development segment in
Israel, which saw a higher recognition of revenue in the first half of last
year. Likewise, the completion of Section 18 of the Highway 6 also led to
decrease in revenue in the same period of 2009. International revenues from
the Construction & Infrastructure segment increased in the first half of 2010
by about 6.1%.
Gross profit totaled NIS 454 million (20% of revenues), compared with NIS
483 million (20% of revenues) in the same period last year. The decrease is
mainly attributed to projects that were finished as well as the approval of
an exceptional claim in the Construction & Infrastructure segment abroad in
the corresponding period last year.
General and administrative expenses totaled NIS 145 million (representing
6.4% of revenues), increasing 17% when compared with the corresponding period
last year (5.3% of revenues). The increase is attributed to adjusting
organizational processes with expanding activities, in particular, SBI
Infrastructures entry to a new international market, as part of the strategic
plan. Also contributing to the rise, was the increased expenditure growth in
initiating renewable energy projects as well as an advertising campaign.
Operating income totaled NIS 290 million (12.8% of revenues), compared
with NIS 355 million (15.2% of revenues) in the same period last year.
Financing costs net decreased by 52% when compared with the corresponding
period last year and are attributed to a lower increase in the CPI index,
which affected the long-term credit costs, and due to a decrease of the
group's operational costs in foreign currencies.
Company's share in the results of investee companies accounted for by the
equity method totaled NIS 9 million, compared with a loss of NIS 23 million
in the corresponding period last year, which is attributed to the value of
the state options for "Derech Eretz" Results (Highway 6).
Net income amounted to NIS 172 million, increasing 34.2% when compared
with the corresponding period last year.
Cash flow from operating activities totaled NIS 271 million, increasing
81% when compared with the corresponding period last year and is attributed
predominantly to the ongoing profit net depreciation costs and change in
working capital.
Working capital totaled NIS 541 million, compared with NIS 485 million in
the corresponding quarter last year.
The Company ended the quarter with cash balances and equivalents,
totaling NIS 1.147 billion and an unutilized credit facility amounting to NIS
725 million.
Doron Blachar, the Group's CFO said: "The Group's shareholder's equity
has steadily grown, resulting in an improvement in the financial resilience
of the Company, which serves as a testament to the company's current
operations.
The financial strength of the company enabled it to finance from its own
resources the acquisition of 12/5% of Derech Eretz and will continue to
support the company growth strategy."
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.
Company Contact: Investor Relations Contacts:
Doron Blachar, CFO Ehud Helft / Porat Saar
Shikun & Binui CCG Investor Relations
Tel: +972 3 630 1518 Tel: +1 646 233 2161/ +972 52 776 3687
email: info@ccgisrael.com
Shikun & Binui Ltd.
Condensed Consolidated Interim Statement of Financial Position as at
June 30 June 30 December 31
2010 2009 2009
---- ---- ----
(Unaudited) (Audited)
----------- ---------
NIS NIS NIS
thousands thousands thousands
---------- --------- ----------
Assets
Cash and cash equivalents 1,147,289 1,100,421 1,180,517
Bank deposits 193,884 93,821 170,226
Short-term loans and investments 68,925 56,938 63,915
Short-term loans to investee companies 169,527 343,194 331,304
Trade receivables - accrued income 786,369 961,476 872,670
Inventory of buildings held for sale 1,210,017 872,598 1,021,668
Receivables and debit balances 218,810 (1) 188,111 (1) 166,744
Other investments, including
derivatives 35,764 2,807 2,619
Current tax assets 84,955 75,494 72,107
Inventory 195,995 176,834 199,234
Assets classified as held for sale 26,678 3,962 8,065
------ ----- -----
Total current assets 4,138,213 3,875,656 4,089,069
--------- --------- ---------
Receivables in respect of concession
agreements 76,804 26,968 68,109
Non-current inventory of land
(freehold) 444,887 487,445 478,425
Non-current inventory of land
(leasehold) 173,573 245,743 198,620
Investment property, net 299,827 (1) 323,871 317,152(1)
Land rights 17,023 16,508 16,975
Long-term prepaid expenses 3,287 (1) 6,988 2,868(1)
Receivables, loans and deposits 377,270 477,404 406,653
Investments in equity-accounted
investees 155,631 139,293 138,572
Loans to investee companies 744,157 618,376 618,270
Deferred tax assets 109,336 132,856 116,498
Property, plant and equipment, net 937,626 (1) 876,700 (1) 820,789
Intangible assets, net 109,673 95,416 101,459
------- ------ -------
Total non-current assets 3,449,094 3,447,568 3,284,390
--------- --------- ---------
Total assets 7,587,307 7,323,224 7,373,459
========= ========= =========
(1) Retrospective implementation
Shikun & Binui Ltd.
Condensed Consolidated Interim Statement of Financial Position as at
(cont'd)
June 30 June 30 December 31
2010 2009 2009
---- ---- ----
(Unaudited) (Audited)
----------- ---------
NIS NIS NIS
thousands thousands thousands
---------- --------- ----------
Liabilities
Short-term credit from banks and others 722,719 1,245,299 879,586
Subcontractors and trade payables 683,804 625,028 683,040
Short-term employee benefits 32,715 28,447 35,982
Payables and credit balances including
derivatives 311,436 256,482 289,917
Current tax liabilities 106,887 101,807 95,445
Provisions 380,697 332,014 303,631
Payables - customer work orders 609,845 692,630 750,958
Advances received from customers 743,129 414,190 565,072
Liabilities classified as held for sale 6,195
-----
Total current liabilities 3,597,427 3,695,897 3,603,631
--------- --------- ---------
Liabilities to banks and others 1,223,306 1,190,760 1,129,821
Debentures 1,933,157 1,844,157 1,912,160
Employee benefits 144,505 132,909 140,703
Deferred tax liabilities 14,075 19,054 15,299
Provisions 23,841 26,514 24,654
Excess of accumulated losses over cost of
investment
and deferred credit balance in investee
companies 42,242 37,870 39,056
------ ------ ------
Total non-current liabilities 3,381,126 3,251,264 3,261,693
--------- --------- ---------
Total liabilities 6,978,553 6,947,161 6,865,324
--------- --------- ---------
Equity
Total equity attributable to equity holders
of the Company 447,088 370,268 351,003
Non-controlling interests 161,666 5,795 157,132
------- ----- -------
Total equity 608,754 376,063 508,135
------- ------- -------
Total liabilities and equity 7,587,307 7,323,224 7,373,459
========= ========= =========
Shikun & Binui Ltd.
Condensed Consolidated Interim Statement of Income
For the six-month period For the three-month For the
ended period ended year ended
------------------------- -------------------- ----------
June 30 June 30 June 30 June 30 December 31
2010 2009 2010 2009 2009
---- ---- ---- ---- ----
(Unaudited) (Unaudited) (Audited)
----------- ----------- ---------
NIS NIS NIS NIS NIS
thousands thousands thousands thousands thousands
---------- ---------- ---------- ---------- ----------
Revenues from
work
performed and
sales 2,270,358 2,338,506 1,182,191 1,124,435 4,453,729
Cost of work
performed
and sales 1,816,554 1,855,618 945,219 905,179 3,570,666
--------- --------- ------- ------- ---------
Gross profit 453,804 482,888 236,972 219,256 883,063
Gain on sale
of
investment
property 7,309 8,107 7,309 8,107 10,978
Selling and
marketing
expenses (11,924) (11,569) (6,614) (5,987) (25,147)
Administrative
and general
expenses (144,959) (123,932) (72,733) (58,123) (268,704)
Other
operating
income 916 2,623 200 1,201 135,565
Other
operating
expenses (15,531) (3,580) (11,234) (1,876) (28,690)
------- ------ ------- ------ -------
Operating
profit 289,615 354,537 153,900 162,578 707,065
------- ------- ------- ------- -------
Financing
income 154,505 62,588 73,383 33,415 132,726
Financing
expenses (214,987) (189,405) (120,905) (121,465) (393,437)
-------- -------- -------- -------- --------
Net financing
expenses (60,482) (126,817) (47,522) (88,050) (260,711)
------- -------- ------- ------- --------
Share of
profit
(losses) of
equity
accounted
investees
(net of tax) 8,633 (23,014) (4,787) 1,429 (66,981)
----- ------- ------ ----- -------
Profit before
taxes on
income 237,766 204,706 101,591 75,957 379,373
Taxes on
income (65,680) (76,550) (36,059) (34,773) (147,232)
------- ------- ------- ------- --------
Net profit for
the period 172,086 128,156 65,532 41,184 232,141
------- ------- ------ ------ -------
Attributable
to:
Equity holders
of the
Company 163,867 129,881 60,790 41,527 237,337
Non-
controlling
interests 8,219 (1,725) 4,742 (343) (5,196)
----- ------ ----- ---- ------
172,086 128,156 65,532 41,184 232,141
======= ======= ====== ====== =======
Basic and
diluted
earnings
per share (in
NIS) 0.42 0.33 0.15 0.11 0.60
==== ==== ==== ==== ====
Number of
shares used
in the
computation of
earnings
per share (in
thousands) 395,545 394,545 394,545 394,545 394,545
======= ======= ======= ======= =======
Operating Segments
For the six month period ended June 30, 2010
Real
Infrastructures estate
and Infrastructures Real development
construction and estate outside
outside of construction development of
Israel in Israel in Israel Israel Consessions
------ --------- --------- ------ -----------
NIS thousands
-------------
Total
external
revenues 1,282,307 615,348 305,346 3,402 -
Inter-
segment
revenues - 56,157 4,244 - -
--------- --------- ------- -------- -------
Total
revenues 1,282,307 671,505 309,590 3,402 -
--------- --------- ------- -------- -------
Segment
profit
(loss)
before
income tax 234,388 9,457 94,343 (24,267) 21,716
========= ========= ========= ========= =========
For the six month period ended June 30, 2010
Renewable
energy Water Other Adjustments Consolidated
------ ----- ------ ----------- ------------
NIS thousands
-------------
Total
external
revenues 37,061 26,894 - - 2,270,358
Inter-
segment
revenues - - - (60,401) -
--------- --------- ------- -------- -------
Total
revenues 37,061 26,894 - (60,401) 2,270,358
========= ========= ========= ========= =========
Segment
profit
(loss)
before
income
tax (18,355) (8,622) (6,735) (64,159) 237,766
========= ========= ========= ========= =========
For the six month period ended June 30, 2009
Real
Infrastructures estate
and Infrastructures Real development
construction and estate outside
outside of construction development of
Israel in Israel in Israel Israel Consessions
------ --------- --------- ------ -----------
NIS thousands
Total
external
revenues 1,208,385 651,911 421,600 3,926 -
Inter-
Segment
revenues - 45,849 4,154 - -
Total
revenues 1,208,385 697,760 425,754 3,926 -
Segment
profit
(loss)
before
income
tax 219,552 10,144 89,570 (27,871) (16,183)
For the six month period ended June 30, 2009
Renewable
energy (*) Water(*) Other Adjustments Consolidated
------ ----- ------ ----------- ------------
NIS thousands
Total
External
revenues 26,213 25,457 1,014 - 2,338,506
Inter-segment
revenues - - - (50,003) -
Total
revenues 26,213 25,457 1,014 (50,003) 2,338,506
Segment
profit
(loss)
before
income
tax (1,372) (1,221) (3,009) (64,904) 204,706
(*) Restated as a result of splitting the environment segment into two
operating segments
Operating Segments (cont'd)
For the three month period ended June 30, 2010
Real
Infrastructures estate
and Infrastructures Real development
construction and estate outside
outside of construction development of
Israel in Israel in Israel Israel Consessions
------ --------- --------- ------ -----------
NIS thousands
Total
External
revenues 665,611 339,724 144,082 2,043 -
Inter-segment
revenues - 25,510 2,003 - -
Total
revenues 665,611 365,234 146,085 2,043 -
Segment profit
(loss) before
income tax 120,220 8,612 52,555 (15,921) (1,851)
For the three month period ended June 30, 2010
Renewable
energy Water Other Adjustments Consolidated
------ ----- ------ ----------- ------------
NIS thousands
Total
External
revenues 15,884 14,847 - - 1,182,191
Inter-segment
revenues - - - (27,513) -
Total
revenues 15,884 14,847 - (27,513) 1,182,191
Segment profit
(loss) before
income tax (6,214) (6,537) (29) (49,244) 101,591
For the three month period ended June 30, 2009
Real
Infrastructures estate
and Infrastructures Real development
construction and estate outside
outside of construction development of
Israel in Israel in Israel Israel Consessions
------ --------- --------- ------ -----------
NIS thousands
Total
External
revenues 602,787 325,821 166,734 2,490 -
Inter-segment
revenues - 22,367 2,269 - -
Total
revenues 602,787 348,188 169,003 2,490 -
Segment profit
(loss) before
income tax 86,085 5,206 45,470 4,185 (4,963)
For the three month period ended June 30, 2009
Renewable
energy (*) Water (*) Other Adjustments Consolidated
--------- ----- ----- ----------- ------------
NIS thousands
Total
External
revenues 12,472 13,891 240 1,124,435
Inter-segment
revenues - - - (24,636) -
Total
revenues 12,472 13,891 240 (24,636) 1,124,435
Segment profit
(loss) before
income tax (2,505) 352 (2,603) (55,270) 75,957
(*) Restated as a result of splitting the environment segment into two
operating segments
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, info at ccgisrael.com
Tags: August 22, Israel, Ramat gan, Shikun & Binui Ltd., Western Europe
