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Alon Holdings Blue Square - Israel Ltd. (NYSE:BSI) Announces The Financial Results For The Fourth Quarter Of 2012

Stocks in this article: BSI

2012 is the first year where we enjoy the fruits of investing in Diners Israel, which is engaged in the issuance and clearance of Diners, Diners YOU and Master Card YOU credit cards, which are issued to the club members of the group. The Company's share in Diners' earnings this year amounted to NIS 20 million, net after taxes.    

Results for the fourth quarter of 2012 [1]

Gross revenues

Revenues (including government levies) in the fourth quarter of 2012 amounted to NIS 3,831.9 million (U.S. $1,026.5 million) as compared to revenues of NIS 3,722.0 million in the comparable quarter last year, an increase of 3.0%. The main increase in revenues was due to an increase in the revenues of Dor Alon compared to the corresponding quarter last year.

Revenues from sales, net

Revenues of the Commercial and Fueling sites segment - amounted in this quarter to NIS 1,435.2 million (U.S. $384.5 million) as compared to NIS 1,299.7 million in the corresponding quarter last year, an increase of 10.4%. The main increase was due to an increase in the price of petrol and an increase in quantitative sales in the convenience stores compared to the corresponding quarter last year.

Revenues of the Supermarkets segment  - amounted in this quarter to NIS 1,588.4 million (U.S. $425.5 million) as compared to NIS 1,647.7 million in the corresponding quarter last year, a decrease of 3.6%. The decrease in revenues derives mainly from a decline in sales of the same store sales (SSS) at a rate of 2.2% compared to the corresponding period.

Revenues of the Non-Food segment [2] - an increase in revenues by 19.6% from NIS 64.3 million in the fourth quarter of 2011 to NIS 77.0 million (U.S. $20.6 million) in the current quarter. The increase in revenues is mainly due to an increase in sales in the home activity and in stores transferred from franchise to self-operation.

Revenues of the Real Estate segment - an increase in rental income of 1.1% from NIS 9.1 million in the fourth quarter of 2011 to NIS 9.2 million (U.S. $2.5 million) in the current quarter.  

Gross profit in the fourth quarter of 2012 amounted to NIS 681.0 million (U.S. $182.4 million) (21.9% of revenues) as compared to gross profit of NIS 688.6 million (22.8% of revenues) in the comparable quarter last year. The decrease in the gross profit compared to the corresponding quarter last year was mainly due to the decrease in the gross profit in the Supermarkets and Non-food segments.

In the Commercial and Fueling sites segment, gross profit amounted to NIS 203.0 million (U.S. $54.4 million), (14.1% of revenues) compared to NIS 204.1 million in the comparable quarter last year (15.7% of revenues). The decrease of 0.5% in the gross profit compared to the corresponding quarter last year mainly derived from inventory losses following a decline in supervised gasoline prices in this quarter. The gross profit excluding the effect of the change in fuel prices on the inventory increased by 6%.  

In the Supermarkets segment, gross profit amounted to NIS 440.9 million (U.S. $118.1 million), (27.8% of revenues) compared to NIS 444.6 million in the fourth quarter of 2011 (27.0% of revenues), a decrease of 0.8% stemming from decrease in sales that was offset by an improved gross margin.

In the Non Food segment, gross profit amounted to NIS 30.7 million (U.S. $8.2 million), (39.9% of revenues) compared to NIS 30.8 million in the comparable quarter of 2011 (47.9% of revenues), with no material change.

Selling, general and administrative expenses in the fourth quarter of 2012 amounted to NIS 661.1 million (U.S. $177.1 million) (21.2% of revenues), compared to expenses of NIS 671.5 million (22.2% of revenues) in the comparable quarter last year, a decrease of 1.5%. The main decrease was recorded following efficiency measures taken in the Supermarkets segment that was partly offset by an increase in the cellular activity.  

In the Commercial and Fueling sites segment, these expenses amounted to NIS 181.6 million (U.S. $48.6 million) compared to NIS 186.5 million in the fourth quarter of 2011, a decrease of 2.6%, mainly deriving from efficiency measures taken starting from the fourth quarter of 2011 that were offset from opening new fueling sites.  

In the Supermarkets segment, selling, general and administrative expenses amounted to NIS 401.2 million (U.S. $107.5 million) compared to expenses of NIS 418.8 million in the comparable quarter in 2011. The main decrease derives from decline in salary expenses and other headquarters expenses following efficacy measures and exiting branches.

In the Non Food segment, these expenses amounted to NIS 43.7 million (U.S. $11.7 million) compared to NIS 48.7 million in the comparable quarter in 2011. The decrease derives from a decrease in allowance for doubtful accounts.

In the Real Estate segment, these expenses amounted to NIS 6.9 million (U.S. $1.8 million) compared to NIS 4.1 million in the comparable quarter in 2011. The increase mainly derives from increase in marketing expenses and the branding of Tel Aviv Mall for the fashion week event that took place in December 2012.

Operating profit (before other gains and losses and changes in fair value of investment property) in the fourth quarter of 2012 amounted to NIS 19.9 million (U.S. $5.3 million) (0.6% of revenues) as compared to NIS 17.1 million (0.6% of revenues) in the comparable quarter last year, an increase of 16.5%. The increase in the operating profit was mainly due to a decrease in selling, administrative and general expenses.

In the Commercial and Fueling sites segment, operating profit in this quarter amounted to NIS 21.4 million (U.S. $5.7 million) compared to operating profit of NIS 17.5 million in the corresponding quarter. The increase mainly derives from taking efficiency measures while offsetting inventory losses followed by a decline in petrol prices as above, without inventory losses, the operating profit amounted to NIS 34 million.  

In the Supermarkets segment, operating profit increased from NIS 25.8 million in the comparable quarter last year to NIS 39.7 million (U.S. $10.6 million). The improvement in operating profit derives from taking efficiency measures and exiting from losing branches.  

In the Non Food segment, operating loss of NIS 13.0 million (U.S. $3.5 million) as compared to an operating loss of NIS 17.9 million in the comparable quarter last year due to decrease in administrative and general expenses, as aforesaid.

In the Real Estate segment, a decrease from operating profit of NIS 5.0 million in the comparable quarter in 2011 to NIS 2.3 million (U.S. $0.6 million) due to increase in selling administrative and general expenses as aforementioned.

Changes in fair value of investment property in the fourth quarter of 2012 the Company recorded a profit in the amount of NIS 23.0 million (U.S. $6.2 million) compared to a profit of NIS 13.8 million in the comparable quarter last year.

Other income (expenses), net other income in the fourth quarter of 2012 amounted to NIS 9.1 million (U.S. $2.4 million) compared to other expenses of NIS 9.9 million in the comparable quarter last year.

Operating profit amounted to NIS 52.0 million (U.S. $13.9 million) (1.7% of revenues) as compared to operating profit of NIS 21.0 million (0.7% of revenues) in the comparable quarter last year, an increase of 147.7%.

Finance costs, net in the fourth quarter of 2012 amounted to NIS 34.2 million (U.S. $9.1 million) as compared to net finance costs of NIS 41.6 million in the comparable quarter last year. The decrease in finance costs, net derives from a decline in the CPI (0.7% this quarter compared to 0.2% in the comparable quarter last year) and was partly offset by increase in its debts.

Taxes on income in the fourth quarter of 2012 amounted to NIS 6.8 million (U.S. $1.8 million) as compared to tax expenses of NIS 34.7 million in the comparable quarter last year. The comparable quarter last year included the effect of the change in tax rates on the tax reserves (mainly from 18% to 25%).

Income from continued operation for the fourth quarter of 2012 amounted to NIS 14.4 million (U.S. $3.9 million) compared to a loss of NIS 55.7 million in the fourth quarter of 2011. The income in this quarter attributed to the Company's shareholders amounted to NIS 4.0 million (U.S. $1.1 million) or NIS 0.06 per share (U.S. $0.02) and the income attributed to non-controlling interests amounted to NIS 10.4 million (U.S. $2.8 million).

Net loss from discontinued operation for the fourth quarter of 2012 amounted to NIS 11.9 million (U.S. $3.1 million) or NIS 0.18 per share (U.S. $0.05) compared to a loss of NIS 10.4 attributed in its entirety to the Company's shareholders.

Cash flows for the fourth quarter of 2012

Cash flows from operating activities: Net cash flow provided by operating activities amounted to NIS 109.4 million (U.S. $29.3 million) in the fourth quarter of 2012 compared to NIS 141.4 million from operating activities in the comparable quarter last year. The main decrease derives from a decrease in credit card advances in this quarter compared to the corresponding quarter of last year by NIS 59 million (U.S. $15.8 million) and a decrease in tax payments of NIS 8.0 million (U.S. $2.1 million) that was partly offset by a decrease in working capital needs in the amount of NIS 35 million (U.S. $9.4 million).

Cash flows used in investing activities: Net cash flows used in investing activities amounted to NIS 45.6 million (U.S. $12.2 million) in the fourth quarter of 2012 as compared to net cash used in investing activities of NIS 70.0 million in the comparable quarter. Cash flows used in investing activities in the fourth quarter of 2012 mainly included the purchase of investment property, property and equipment and intangible assets of total NIS 64.4 million (U.S. $17.3 million), the grant of long term loans of NIS 36.5 million (U.S. $9.8 million) mainly to an associate and was offset by proceeds from realization of property and equipment and investment property of NIS 30.7 million (U.S. $8.2 million), and interest received of NIS 7.3 million (U.S. $2.0 million). In the fourth quarter of 2011 the cash flows used in investing activities mainly included the purchase of property and equipment, investment property and intangible assets of NIS 74.5 million, investment in restricted deposits of NIS 4.3 million and payments on account of real estate of NIS 8.1 million and was offset by collection of long-term loans receivable amounting to NIS 16.0 million.

Cash flows used in financing activities: Net cash flows used in financing activities amounted to NIS 37.4 million (U.S. $10.0 million) in the fourth quarter of 2012 as compared to net cash flows deriving from financing activities of NIS 93.9 million in the corresponding quarter last year. The cash flows used in financing activities in the fourth quarter of 2012 mainly included interest payments of NIS 67.4 million (U.S. $18.1 million), repayment of loans of NIS 100.5 million (U.S. $26.9 million) and debentures repayment of NIS 32.1 million (U.S. $8.6 million) and was partly offset by issuance of debentures of NIS 115.2 million (U.S. $30.8 million) and receiving loans of NIS 50.4 million (U.S. $13.5 million). The net cash flows used in financing activities in the fourth quarter of 2011 included mainly payment of long term loans of NIS 200.8 million, payment of a dividend of NIS 75 million, repayment of debentures of NIS 34.2 million and was offset by long term loans received of NIS 81.1 million and change in short term credit of NIS 209.4 million.

Results for the year 2012

Gross revenues

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