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Delek Group Announces Consolidated Results For The First Quarter Of 2013

Stocks in this article: DK

TEL AVIV, Israel, May 29, 2013 /PRNewswire/ --

Delek Group Ltd. (TASE: DLEKG , OTCQX: DGRLY) (hereinafter: "Delek Group" or "The Group") announced today its results for the three month period ending March 31, 2013. The full financial statements are available in English on Delek Group's website at: http://www.delek-group.com.

First Quarter 2013 Highlights

  • First quarter operating profit increases to NIS 908 million, compared with NIS 549 million in the first quarter of last year, a growth of 65%;
  • Gross profit from the sale of Delek US shares was NIS 800 million ( NIS 591 million after tax);
  • First quarter net income of NIS 50 million compared with net income of NIS 110 million in the first quarter of last year (the decline is due to the accounting treatment of sale of shares in Delek US). Including the gross profit from the sale of Delek US shares the net income would have been approximately NIS 641 million;
  • Tamar gas field started production in March 2013;
  • Karish situated off the Israeli coast was declared a natural gas discovery;
  • Declared a dividend of NIS 150 million for the quarter.

Group revenues for the first quarter of 2013 were NIS 17.7 billion, at around the same level when compared with NIS 17.8 billion in the first quarter of 2012.

Net income for the first quarter of 2013 totaled NIS 50 million, compared with a net income of NIS 110 million in the first quarter of 2012. The reduction in net income was due to a high level of tax expense in the quarter. In line with accounting rules, the tax expense generated from the sale of Delek US shares appears as an expense in the profit and loss statement, but because the subsidiary is still considered to be under control of the Delek Group, the amount gained from the sale is recognized only as an increase in the capital reserves on the balance sheet.

On May 7, 2013, the Company completed a tender of 103,500 treasury shares for a total of approximately NIS 97million. This increased Delek Group's public float of shares and it is expected to be subsequently upgraded in the TA 25 index and the TA 100 index at a higher weighting.

Commented Mr. Bartfeld ,  CEO of Delek Group, "We are currently in a very exciting period for our gas sector; the start of production in March at the Tamar gas field, marked an important milestone not only for the Delek Group but for Israel as a whole. Tamar will change the landscape of the Israeli energy market and will chart a significant growth contribution to the Israeli economy. In addition, we saw a significant upward revision of the estimated reserves in Leviathan, bringing its best estimate to 19 TCF. Furthermore, Karish, off the Israeli coast, was recently pronounced a natural gas discovery and the appraisal well at Aphrodite 2 in Cyprus is due to commence in the coming weeks."

Mr Bartfeld continued, "We are pleased with our results of the quarter. Our operating income grew substantially though due to the accounting treatment of our sale of Delek US shares, we recognized a tax expense but not a corresponding income which lowered our net income in the quarter. In the past few months, we have taken a number of important strategic steps at Delek Group. We sold some of our holdings in Delek Automotive as well as Delek US and took Delek Israel private. This is in line with our strategy to become more focused on the upstream energy sector, a sector in which we see very significant future upside potential for Delek Group."

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