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Shikun & Binui Reports Third Quarter 2012 Results

AIRPORT CITY, Israel, November 25, 2012 /PRNewswire/ --

  • 9% Revenue Growth compared with Q3 last year - to NIS 1.4 billion
  • Cash Flows from Operating Activities totaled NIS 132 million, compared with NIS 49 million in Q3 last year

Ofer Kotler, CEO of Shikun & Binui: "The Group continues to develop its diverse growth engines. The results of these processes will bear fruit in the coming quarters and will support the creation of value for our shareholders."

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 third  quarter ended September 30th, 2012.

Noteworthy events during and subsequent to the third quarter and key results:
  • The Group's orders backlog in the construction and infrastructure segments totaled NIS 10.5 billion at the end of the third quarter, of which NIS 7.7 billion ( $2 billion) originates in the backlog of projects outside of Israel.
  • Shikun&Binui Solel Boneh Infrastructures further strengthened its leadership position in the infrastructures segment, and was awarded the tender for construction of the State Controller's Building in Jerusalem.  The project scope is NIS 126 million and is to be built in 33 months.
  • Shikun&Binui Solel Boneh SBI was awarded a roadwork project by the Nigerian Government, totaling $390 million with a construction period of approx. 3 years.
  • Shikun&Binui Real Estate sold 237 housing units in the third quarter of 2012 for a total of NIS 343 million.  In the first nine months of the year, 543 residential units were sold for a total of NIS 782 million.  
  • Shikun&Binui Renewable Energy began construction of three solar projects in the Negev, for production of 17 megawatts of electricity.  Furthermore, the acquisition of " Paz Solar", was completed.
  • In the termo-solar Ashalim Project, Abengoa a Spanish company is expected to replace Siemens as the partner in the project.
  • Concurrent with the approval of the financial statements for the third quarter, the Group's board of directors approved the distribution of a dividend to its shareholders of NIS 80 million. During 2012, the Group distributed dividends totaling NIS 250 million.
  • The Company submitted a bid in the concession tender for construction and operation of the State Archives.
  • The Group's bid as part of an international consortium in a tender in Texas, US, was not accepted.

Revenues from projects and sales totaled NIS 1.37 billion this quarter, growth of 8.7% compared with the third quarter of last year.

Most of the growth was driven by the revenues of the infrastructure and construction outside of Israel segment, with a growth of 21% compared with Q3 of 2011, reaching NIS 729 million.  The infrastructure and construction outside of Israel revenues were impacted by the shekel-dollar exchange rate which, in the third quarter of 2012, added NIS 80 million to revenues compared to the third quarter of last year.

The real estate development in Israel segment posted growth of 14.6% compared with the third quarter of last year, reaching NIS 228 million, driven mainly by the increase in the average price of an apartment that was delivered to customers.

The revenues of the concessions segment decreased to NIS 23 million (from NIS 85 million in Q3 of last year), due to completion of the BOT tender to rehabilitate roads in Northern Israel.

Gross profit totaled NIS 243 million (17.7% of revenues) this quarter, growth of 2.5% compared with the third quarter of 2011 (18.8% of revenues).  Growth of NIS 37 million in the gross profit of the real estate development in Israel segment was offset by a decrease in the gross profit of the real estate development outside of Israel segment (total of NIS 13 million), due to the impairment provision of NIS 14 million on land in Hungary and the decrease in the infrastructure and construction outside of Israel segment (totaling NIS 13 million).

Administrative and general expenses contracted in the quarter by 12% compared with Q3 of last year, to a total of NIS 80 million (5.8% of revenues).  The decrease was mainly due to the decline in expenses for the mega-tenders in which the Group participated, mainly in view of the deferral of the timetables by the procurers.

Other operating expenses totaled NIS 14 million, compared with NIS 1 million posted in the third quarter of 2011. The expenses derived from a NIS 6 million loss from the issuance of capital in ADO (an affiliate) to an institutional investor and from a NIS 7.2 million provision for balances whose realization is doubtful.

Operating profit totaled NIS 143 million (10.4% of revenues), growth of 4.5% compared with Q3 of 2011 (10.8% of revenues).  After neutralizing the other operating expenses posted by the Group during the quarter, operating profit totaled NIS 157 million (11.4% of revenues), growth of 13.8% compared with the third quarter of last year.

Net financing costs totaled NIS 43 million, compared with NIS 28 million in Q3 of last year, and were attributable mainly to long-term credit.

Group equity in losses of investees totaled NIS 10 million, compared with profit of NIS 4 million in the second quarter of 2011 that included a reversal of a provision in Gilatz Spanish PV project.

Net profit totaled NIS 71 million, compared with NIS 82 million in the third quarter of last year, which included income of NIS 18 million from the reversal of a provision for losses in Spain.  After neutralizing this income, net profit in Q3 of 2011 totaled NIS 64 million, and net profit in the reporting period posted growth of 11%.

Cash flows from operating activities totaled NIS 132 million.

Equity totaled NIS 1.2 billion on 30.9.12, compared with NIS 969 million at the end of 2011.

The Group does not revalue its investment property, which is presented in the financial statements at historical cost.

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