Shikun & Binui Presents First Quarter 2014 Financial Results - KPTV - FOX 12

Shikun & Binui Presents First Quarter 2014 Financial Results

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SOURCE Shikun & Binui Ltd.

AIRPORT CITY, Israel, May 26, 2014 /PRNewswire/ -- Shikun & Binui Ltd. (TASE: SKBN.TA), a global construction and infrastructure Company operating within and outside Israel, reported its financial results for the first quarter, ended March 31, 2014.

Ofer Kotler, the Group's CEO commented, "Over the past quarter we continued to carry out infrastructure and renewable energy projects. We also expanded our operations into another African country and our aim is to continue our expansion into new countries in the segments in which we operate."

Main events during and subsequent to the reported period:

  • "Pumped Storage" Transaction ("Ma'aleh Gilboa"). On January 2, 2014, the purchase of rights in the pumped storage project in Ma'aleh Gilboa was closed. As a result, the Company recognized an investment in the project of NIS 118 million.
  • "Elcon" transaction. On February 6, 2014, the purchase of 30% of the holdings in Elcon was closed. As a result, the Company posted an investment in its financial statements totaling NIS 38 million.
  • Financing activities: On April 3, 2014, the Company issued debentures through an expansion of Series-7 debentures totaling NIS 274 million. On May 8, 2014, the Company executed an offer to exchange NIS 587 million par value of Series-4 debentures for NIS 698 million par value of Series-6 debentures.
  • Listing of Shikun & Binui Real Estate's shares for trading: On May 19, 2014, the Company announced that there were discussions regarding cancellation of the commitment to list the shares of the Shikun & Binui Real Estate for trading. If these discussions progress to the signing of a binding agreement, the Company will recognize an expense currently estimated at NIS 30 million.
  • In the first quarter of 2014, Shikun & Binui Real Estate sold 209 residential units, compared with 195 units in the first quarter of 2013. The number of units occupied during the reported period totaled 176, compared with 170 in the first quarter of 2013.
  • Equity as of March 31, 2014 increased to NIS 1,173 million, compared with NIS 1,146 million on December 31, 2013.
  • The orders backlog in the infrastructure segment as of March 31, 2014 totaled NIS 10.4 billion, of which NIS 7.5 billion is in respect of overseas activities.
  • On May 26, 2014, the Company's board of directors declared a dividend distribution totaling NIS 50 million.

Summarized financial results:

Group's total revenue in the first quarter of 2014 amounted to NIS 1,467 million, compared with NIS 1,621 million in the first quarter of last year – a decrease of 9.5%.  The decline of NIS 154 million is due mainly to the decrease of NIS 118 million in the construction and infrastructures outside of Israel segment (of which NIS 40 million is attributable to the erosion in exchange rates). In addition, a number of other factors contributed to the decline. There was a NIS 81 million decrease in the real estate development in Israel segment, a NIS 74 million decrease in the turnover of the renewable energy segment, due to the decline in the volume of photovoltaic facilities built, and a NIS 56 million decrease in the turnover of the concessions segment, due to the completion of the building phase of the roadwork project in northern Israel and the transition to the operation phase.  Contrarily, the company posted an increase of NIS 113 million in the infrastructures and construction in Israel segment.

Gross profit in the first quarter of 2014 totaled NIS 230 million, compared with NIS 316 million in Q1 of 2013.  The decrease was driven mainly by the decrease in the gross profit of the real estate development in Israel segment, as detailed below.

Administrative and general expenses in the quarter increased by NIS 14 million compared with the first quarter of last year, totaling NIS 90 million.  The increase was driven mainly by the increase of NIS 5 million executive compensation costs (in respect of the granting of blocked shares of stock), and consultancy expenses for tenders in which the Company is bidding within and outside of Israel.

Other operating income, net totaled NIS 4 million in the reported period, compared with NIS 57 million in Q1 of last year, which included a NIS 55 million gain from the cancellation of a sale with the Ramat-Gan Municipality. 

Group operating profit in the first quarter of the year totaled NIS 136 million, compared with NIS 290 million in Q1 of last year.  The decrease was driven mainly by the decline of NIS 124 million in the operating profit of the real estate development segment, deriving from a NIS 68 million decrease in the segment's gross profit and the NIS 55 million gain recognized from the cancellation of the sale of land in the same period last year, as previously mentioned.

Net financing expenses in the first quarter of 2014 totaled NIS 31 million, compared with NIS 46 million in Q1 of 2013.  The decrease was driven mainly by a 0.7% decrease in the Consumer Price Index (CPI) during the period, compared with an increase of 0.1% in the same period last year, which impacted the costs of CPI-linked credit and, contrarily, by a growth in the amount of credit, which contributed to a NIS 12 million increase in financing expenses.

Taxes on income in the reported quarter totaled NIS 32 million, compared with NIS 63 million in Q1 of 2013.  The decrease was driven mainly by the reduction in tax expense, due to the decline posted in the real estate development in Israel segment.

Net Profit in the first quarter of 2014 totaled NIS 74 million, compared with NIS 156 million in Q1 of last year.  The decrease was due to the reasons previously described.

Cash flow used in operating activities totaled NIS 68 million in the first quarter of 2014, compared with cash flow generated from operating activities of NIS 74 million in Q1 of last year.  The NIS 142 million decrease was driven mainly by the purchase of land within and outside of Israel and an increase in tax payments, compared with NIS 100 million received last year of from cancellation of the sale that had been signed with the Ramat-Gan Municipality.

Balances of cash and cash equivalents as of March 31, 2014 totaled NIS 1,584 million.  The Company has unutilized credit facilities totaling NIS 1,123 million.

Highlights of Segment Analysis (NIS thousand):


Q1-2014

Q1-2013

Segment

Revenues

Pre-tax profit

Revenues

Pre-tax profit

Infrastructure and construction outside of Israel

665

114

783

124

Infrastructure and construction in Israel

564

12

451

25

Real estate development in Israel

241

21

322

144

Real estate development outside of Israel

2

2

4

(24)

Renewable energy

24

(2)

98

2

Water

12

(1)

8

(6)

Concessions

13

(3)

69

4

Other

(54)

(37)

(114)

(50)

Total

1,467

106

1,621

219

 

Revenues of the infrastructure and construction outside of Israel segment in the first quarter of 2014 totaled NIS 665 million, compared with NIS 783 million in Q1 of 2013.  The NIS 118 decrease of which NIS 40 million was due to the reduction in the average dollar exchange rate, as well as by the completion of projects in Uganda and Tanzania, a slowing in the project in Guatemala and low volumes of work done in the project in Azerbaijan.  Contrarily, revenue was recognized for the first time in Togo as a result of being awarded the roadwork project last year.  Gross profit in the infrastructures and construction outside of Israel segment totaled NIS 153 million in the quarter, compared with NIS 155 million in Q1 of 2013, with the gross margin rising from 20% to 23%.  The effect of the depreciation of the US Dollar on gross profit in this segment totaled NIS 9 millionPre-tax profit in the segment amounted to NIS 114 million (17% of sales), compared with NIS 124 million (16% of sales) in the same period last year. During the quarter, the Company was awarded 2 new hydraulic projects in Guatemala.

In the infrastructures contracting segment in Israel, revenues totaled NIS 564 million in the reported period, compared with NIS 451 million in the first quarter of last year.  The increase in revenues of this segment was driven mainly by the growth in the volume of construction work carried out on the BIG Project in Ashdod.  Furthermore, there was an increase in the activity of the cement factories and the temporary construction resulting from the industry's growth and the increase in road activity.

Gross profit totaled NIS 27 million, compared with NIS 35 million in Q1 of 2013. Pre-tax income in the infrastructure and construction in Israel segment amounted to NIS 12 million, compared with NIS 25 million in the first quarter of last year. 

NIS 2.5 billion of the Company's orders backlog is attributable to this segment.

Revenues of the real estate development in Israel segment totaled NIS 241 million, compared with NIS 322 million in Q1 of 2013.  The 25% decrease is due mainly to the decrease in revenues from sales of residential units.  Despite the increase in the number of units handed over in the first quarter (176 residential units, compared with 170 units in the first quarter of last year), the change in the mix of units handed over during the quarter represents an average sales price per residential unit of NIS 1.1 million (pre-VAT), compared with NIS 1.5 million (pre-VAT) in the same quarter last year.  Gross profit of the segment amounted to NIS 42 million (17% of sales), compared with NIS 110 million (34% of sales).  The results for Q1 of last year included units that were built on land recorded in of the balance sheet at low historical costs. 

Pre-tax profit in the segment totaled NIS 21 million, compared with NIS 144 million in the first quarter of 2013, as a result of the decrease in gross profit, as noted, and due to the gain of NIS 55 million recognized in the first quarter of last year in this segment, due to cancellation of the sales agreement that had been signed with the Ramat-Gan Municipality.

In the renewable energy segment, revenues totaled NIS 24 million, compared with NIS 98 million in the first quarter of last year.  The decline was driven mainly by the decrease in the volume of photovoltaic facilities built.  

Revenues of the concessions segment in the first quarter of 2014 amounted to NIS 13 million, compared with NIS 69 million in Q1 of 2013.  The NIS 56 million reduction is mainly due to the end of the construction phase of the BOT project for rehabilitating the roads in the North and transitioning to the operating phase of the project.  

Tal Raz, the Group's CFO commented, "Our success continues, thanks to our sound financial foundation which underlies the operation of all our companies. We continue to enjoy the trust of our investors and the capital markets, contributors to the success of our recent financial activity, which was completed after the end of the quarter.  We issued Series-7 debentures amounting to NIS 274m and exchanged Series-4 debentures for Series-6 debentures, with a longer maturity, at a total amount of NIS 698 par value."

The Company will also host a conference call on Tuesday May 27 at 10am Eastern Time. Tal Raz, Chief Financial Officer, will host the call and will be available to answer questions after presenting the results.

To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, try the international dial-in number.

US:

1-888-668-9141

UK: 

0-800-917-5108

Israel:

03-918-0609

International:

+972-3-918-0609

At: 10am Eastern Time, 7:00am Pacific Time, 3:00pm UK Time, 5:00pm Israel Time

For those unable to participate, the teleconference will be available for replay on the company's website at http://en.shikunbinui.co.il/ beginning 24 hours after the call.

About Shikun & Binui Group

The "Shikun & Binui" Group is a global construction and infrastructure company engaged within and outside of Israel in seven operating segments: 1) infrastructures and construction contracting outside of Israel; 2) infrastructures and construction contracting in Israel; 3) real estate development in Israel; 4) real estate development outside of Israel; 5) renewable energy; 6) concessions; and 7) water.  The Company's activities include mainly large-scale highly-complex projects for the private and public sectors, which integrate the concept of sustainability.

 

IR Contacts


Company 

External IR

Inbal Uliansky 

Ehud Helft/Kenny Green 

+972 (3) 6301058

GK Investor Relations

inbal_u@shikunbinui.com

+1 617 418 3096


ehud@gkir.com

 

This announcement was prepared solely for summation and convenience and does not replace a review of the reporting of Shikun & Binui Ltd. (hereafter – "the Company").  The information contained in this announcement, which deals with the Company, is, by its nature incomplete and all of its contents are a supplement to and subject to that stated in the Company's remaining reporting.  This announcement includes forecasts, assessments, estimates and other information relating to the Company or its subsidiaries, or to other parties or to future events and matters, the extent of whose realization is not certain and is not under the sole control of the Company (forward-looking information, as defined in the Securities Law-1968).  The key facts and data serving as the basis for this information are facts and data, among others, related to the current status of the Company and its businesses, facts and data relating to the current status of the operating segments in which the Company engages in its areas of operation, and other macroeconomic facts and data known to the Company on the preparation date of this presentation.

It is understood that forward-looking information does not constitute a fact and is based solely on subjective assessments.  Forward-looking information is uncertain and for the most part, is not under the Company's control.  The realization or non-realization of the forward-looking information will be influenced, among others, by the risk factors that characterize the Company's operations, as well as developments in the general environment and external factors that impact the Company's operations.  The Company's future results and achievements could differ significantly from those presented in this presentation.  The Company is not obligated to update or modify the said forecast or assessment, and is not obligated to update this announcement.  This announcement does not constitute an offer to purchase the Company's securities or an invitation to receive such offers.  An investment in securities in general, and in the Company in particular, carries risk.  One must take into account that past data do not necessarily indicate future performance.

 

Shikun & Binui Ltd.


Condensed Consolidated Interim Statement of Financial Position as at








March 31

March 31

December 31



2014

2013

2013



(Unaudited)

(Audited)



NIS thousands

NIS thousands

NIS thousands

Assets





Cash and cash equivalents


1,583,882

1,327,225

1,781,369

Bank deposits


360,005

387,166

413,526

Short-term loans and investments


48,980

124,141

47,106

Short-term loans to investee companies


64,913

34,133

17,507

Trade receivables – accrued income


1,296,262

1,429,529

1,202,928

Inventory of buildings held for sale


1,703,448

1,733,964

1,600,924

Receivables and debit balances


325,692

383,776

326,352

Other investments, including derivatives


27,532

13,839

27,679

Current tax assets


78,525

30,656

33,202

Inventory


269,067

288,287

272,865

Assets classified as held for sale


85,183

606,045

10,854

Total current assets


5,843,489

6,358,761

5,734,312






Receivables in respect of concession





 arrangements


948,870

663,722

801,204

Non-current inventory of land (freehold)


469,664

368,712

430,913

Non-current inventory of land (leasehold)


218,779

340,776

269,226

Investment property, net


608,818

430,344

637,226

Land rights


15,054

14,798

15,836

Receivables, loans and deposits





 and derivatives


546,643

437,926

637,421

Investments in equity-accounted investees


404,557

265,553

286,641

Loans to investee companies


498,388

517,493

473,653

Deferred tax assets


92,619

77,470

92,256

Property, plant and equipment, net


1,046,011

997,165

1,013,904

Intangible assets, net


134,882

144,563

130,314

Total non-current assets


4,984,285

4,258,522

4,788,594






Total assets


10,827,774

10,617,283

10,522,906

 

Shikun & Binui Ltd.


Condensed Consolidated Interim Statement of Financial Position as at (cont'd)








March 31

March 31

December 31



2014

2013

2013



(Unaudited)

(Audited)



NIS thousands

NIS thousands

NIS thousands

Liabilities





Short-term credit from banks and others


1,066,169

1,228,950

741,008

Subcontractors and trade payables


1,037,379

987,142

984,568

Short-term employee benefits


151,124

122,197

138,093

Payables and credit balances including derivatives


444,337

425,053

399,475

Current tax liabilities


67,921

84,897

88,768

Provisions


437,433

406,149

455,274

Payables - customer work orders


561,859

706,719

545,538

Advances received from customers


969,048

902,750

900,435

Dividend payable


59,032

49,196

78,718

Total current liabilities


4,794,302

4,913,053

4,331,877






Liabilities to banks and others


1,599,462

1,536,092

1,621,573

Debentures


2,933,982

2,664,111

3,103,117

Employee benefits


72,960

80,831

73,209

Deferred tax liabilities


55,775

58,947

56,821

Provisions


168,596

130,232

159,941

Excess of accumulated losses over cost of investment





 and deferred credit balance in investee companies


30,032

37,168

30,279

Total non-current liabilities


4,860,807

4,507,381

5,044,940






Total liabilities


9,655,109

9,420,434

9,376,817






Equity





Total equity attributable to owners





 of the Company


989,849

1,023,548

964,208

Non-controlling interests


182,816

173,301

181,881

Total equity


1,172,665

1,196,849

1,146,089
















Total liabilities and equity


10,827,774

10,617,283

10,522,906

 


Shikun & Binui Ltd.


Condensed Consolidated Interim Statement of Income








For the



For the three-month period ended

year ended



March 31

March 31

December 31



2014

2013

2013



(Unaudited)

(Audited)



NIS thousands

NIS thousands

NIS thousands

Revenues from work performed and sales


1,466,766

1,621,465

6,369,793






Cost of work performed and sales


1,237,201

1,305,244

5,274,537






Gross profit


229,565

316,221

1,095,256






Gain on sale of investment property


-

-

12,144

Selling and marketing expenses


(7,913)

(6,917)

(39,996)

Administrative and general expenses


(90,301)

(75,963)

(349,177)

Other operating income


4,132

57,109

177,241

Other operating expenses


(88)

(146)

(54,954)






Operating profit


135,395

290,304

840,514






Financing income


34,283

55,185

199,779

Financing expenses


(65,025)

(101,346)

(362,638)






Net financing expenses


(30,742)

(46,161)

(162,859)






Share of (profits) losses





 of equity accounted investees


872

(24,925)

(86,002)






Profit before taxes on income


105,525

219,218

591,653

Taxes on income


(31,498)

(62,851)

(198,227)






Profit for the period


74,027

156,367

393,426






Attributable to:





Owners of the Company


72,509

142,776

363,149

Non-controlling interests


1,518

13,591

30,277








74,027

156,367

393,426






Basic earnings per share (in NIS)


0.18

0.36

0.91






Diluted earnings per share (in NIS)


0.18

0.36

0.90






Number of shares used in the computation of





 basic earnings per share (in thousands)


399,317

400,275

400,924






Number of shares used in the computation of





 diluted earnings per share (in thousands)


399,600

400,880

401,465

 

Operating Segments



(1)

For the three-month period ended March 31, 2014 (unaudited)


Infrastructures











and

Infrastructures


Real estate








construction

and

Real estate

development








outside of

construction

development

outside of


Renewable






Israel

in Israel

in Israel

Israel

Concessions

energy

Water

Other

Adjustments

Consolidated


NIS thousands

Total external revenues

665,009

510,212

240,917

2,045

13,218

23,609

11,311

445

-

1,466,766

Inter-segment revenues

-

53,518

19

-

-

-

13

-

(53,550)

-












Total revenues

665,009

563,730

240,936

2,045

13,218

23,609

11,324

445

(53,550)

1,466,766












Segment profit (loss) before 











 income tax

113,905

12,155

20,897

2,232

(3,540)

(1,953)

(1,058)

(176)

(36,937)

105,525

 


For the three-month period ended March 31, 2013 (unaudited)


Infrastructures











and

Infrastructures


Real estate








construction

and

Real estate

development








outside of

construction

development

outside of


Renewable






Israel

in Israel

in Israel

Israel

Concessions

energy

Water

Other

Adjustments

Consolidated


NIS thousands

Total external revenues

783,594

337,029

321,758

3,749

69,452

97,672

8,211

-

-

1,621,465

Inter-segment revenues

-

113,828

19

-

-

-

-

-

(113,847)

-












Total revenues

783,594

450,857

321,777

3,749

69,452

97,672

8,211

-

(113,847)

1,621,465












Segment profit (loss) before 











 income tax

123,875

25,417

144,178

(23,970)

4,110

2,481

(6,479)

(159)

(50,235)

219,218

 

Operating Segments (cont'd)




For the year ended December 31, 2013 (audited)


Infrastructures











and

Infrastructures


Real estate








construction

and

Real estate

development








outside of

construction

development

outside of


Renewable






Israel

in Israel

in Israel

Israel

Concessions

energy

Water

Other

Adjustments

Consolidated


NIS thousands

Total external revenues

2,880,323

1,636,476

1,462,060

13,614

106,280

231,420

38,728

892

-

6,369,793

Inter-segment revenues

-

354,234

76

-

-

-

174

-

(354,484)

-












Total revenues

2,880,323

1,990,710

1,462,136

13,614

106,280

231,420

38,902

892

(354,484)

6,369,793












Segment profit (loss) before 











 income tax

470,577

66,426

307,489

(56,518)

20,700

(40,616)

(37,158)

6,021

(145,268)

591,653

 

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