Shikun & Binui Delivers Strong First Quarter 2009 Results

RAMAT GAN, Israel - Net Income Up 18% to NIS 87 Million; Quarterly Revenues Up 21% to NIS 1.2 Billion; Operating Cash Flow Reaches NIS 112.5 Million

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 three month period ended March 31, 2009.

As of January 1, 2009 the Company started recording its results based on the following business segments: International Infrastructure and Building, Israel Infrastructure and Building, Israel Real Estate Development, International Real Estate Development, Concessions, Environment and Others.

Main Business Highlights of the Quarter - Solel Bone International, a subsidiary of Shikun & Binui, signed an agreement to plan and build an 85 Megawatt capacity Hydro-Electric power plant in Guatemala. The $200 million contract is expected to last 32 months and includes the planning and building of bridges and water reservoirs, digging of tunnels and canals, as well as the laying access roads. This comprehensive project fully leverages Solel Bone International’s engineering and operating capabilities; - H2ID, a subsidiary of Shikun & Binui, was chosen, following an order from the Israeli Government, to expand the Hadera sea water desalination plant to increase the desalination capacity by 27 cubic meters, in excess of the current 100 million cubic meters per annum. The building of the original desalination plant is progressing according to plan; - Carmelton, a subsidiary of Shikun & Binui, has completed the mining of the third, of the four, Carmel tunnels. The breakthrough of the Tunnel concludes the digging Israel’s longest tunnel - 1,650 meters - representing one of four tunnels, together constituting the Carmel Tunnels’ project - During the first quarter of 2009, Shikun & Binui Nadlan sold 135 apartments throughout the country

Revenues for the first quarter of 2009 totaled approximately NIS 1.2 billion, an increase of 21% year over year. The increase in revenues was driven by an increase in the following segment revenues:

- Israel Real Estate Development Revenues increased 274% totaling approximately NIS 256.8 million. The increase resulted from an increase in revenue recognition of apartments handed over to clients in the quarter. - International Infrastructure and Building Segment Revenues increased 13.2% reaching approximately NIS 605.6 million. This growth is despite the global recession. In recent quarters the international segment managed to retain profitability despite ongoing budgeting and financing strains. - Israel Infrastructure and Building Segment Revenues increased 3.3% to approximately NIS 349.6 million, noteworthy given the slowdown in the housing market.

Gross profit for the first quarter of 2009 totaled approximately NIS 264 million, or 22% of revenues, an 83% year over year increase. The higher gross profit was driven by the International Infrastructure and Building segment following a change in project mix as well as from the Israeli Real Estate Development segment following recognition, during the reporting period, from new apartment revenues.

Sales and marketing expenses for the first quarter of 2009 decreased by 6% from the first quarter 2008, totaling approximately NIS 5.6 million.

General and administrative expenses totaled approximately NIS 65.8 million, or 5.4% of revenues, compared to approximately NIS 64.5 million, or 6.4% of revenues in the first quarter 2008.

Operating income for the first quarter 2009 totaled approximately NIS 192.5 million, or 15.8% of revenues, a substantial increase from the approximate NIS 84 million, or 8.4% of revenues, in the first quarter 2008.

Finance expenses, net, for the first quarter of 2009 totaled approximately NIS 39 million, compared with approximately NIS 23 million in the comparable quarter last year. The increase in finance expenses, net, was primarily the result of approximately NIS 28 million of losses attributed to currency fluctuations, resulting from the Company’s foreign activities. This increase was partially offset by a decline in finance expenses relating to the long term credit, the majority of which was affected by the change in the Israeli Consumer Price Index (”CPI”). Between November 2008 and February 2009 the CPI declined 0.7%, while in the comparable prior period, the CPI increased 0.4%. The change in CPI between the periods resulted in a NIS 15 million finance expense on the Company’s long-term debentures, compared to NIS 45 million in the comparable period last year.

Net income for the first quarter 2009 totaled approximately NIS 87 million, an increase of 18% from the first quarter 2008.

The group does not re-evaluate its real estate assets and records them based on their historic cost in the balance sheet.

Backlog of firm orders, as at March 31, 2009, totaled approximately NIS 6.1 billion, similar to the level at the beginning of the year.

Shareholders’ equity as at March 31, 2009, totaled approximately NIS 366.2 million, compared to approximately NIS 192.2 million at the end of 2008. The increase primarily resulted from first quarter 2009 net income (approximately NIS 87 million) and from translation differences resulting from the conversion of the foreign subsidiaries financial statements (approximately NIS 75 million) primarily recorded in US dollars and Euro.

Cash flow generated from operating activities during the first quarter of 2009 totaled approximately NIS 112.5 million and was utilized for the funding of the Company’s investment activities, which totaled NIS 110 million.

Credit. During the first quarter of 2009 the Company repaid NIS 111 million of credit and paid out interest to the amount of approximately NIS 30 million. The Company received NIS 53 million in credit during the first quarter of 2009.

Working capital at the end of the first quarter of 2009 totaled NIS 313 million, compared to NIS 379 million at the end of December 2008.

As of March 31 2009 the Company had cash, cash equivalents and deposits totaling approximately NIS 1,339 million. Furthermore, the Company has unutilized credit lines in the amount of NIS 250 million.

Total assets, as at March 31, 2009, totaled approximately NIS 7.4 billion.

Mr. Ofer Kotler, Shikun & Binui’s CEO commented on the results: “During the first quarter we continued to expand our net income while generating increased cash flow from operating activities. Our sound financial standing and strong growth drivers grant us the necessary resources to continue to successfully meet challenges while preserving growth”.

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. The 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. 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: Doron Blachar, CFO Shikun & Binui Tel: +972-3-630-1518 Investor Relations Contacts: Ehud Helft / Fiona Darmon GK Investor Relations Tel: +1-646-797-2868 / +97-52-695-4400 Email: info@gkir.com

Source: Shikun & Binui Ltd.

Company Contact: Doron Blachar, CFO, Shikun & Binui, Tel: +972-3-630-1518; Investor Relations Contacts: Ehud Helft / Fiona Darmon, GK Investor Relations, Tel: +1-646-797-2868 / +97-52-695-4400, Email: info at gkir.com