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Alon Blue Square - Israel Ltd. (NYSE: BSI) Announces The Financial Results For The First Quarter Of 2013[1]

Alon Blue Square - Israel Ltd. (NYSE: BSI) Announces The Financial Results For
                         The First Quarter Of 2013[1]

PR Newswire

ROSH HA'AYIN, Israel, May 30, 2013

ROSH HA'AYIN, Israel, May 30, 2013 /PRNewswire/ --

  oCash flows from operating activity amounted to NIS309 million in this
    quarter, an increase of 93%, the AdjustedEBITDA in this quarter amounted
    to NIS 98 million compared to NIS 115 million in the corresponding quarter
    last year.
  oDecrease in financial debt, net of NIS 250 million compared to December
    31, 2012.
  oIn the Fueling and commercial sites: An improvement in the operating
    profit in this quarter compared to the corresponding quarter last year.
    The  operating profit in this quarter amounted to NIS 37 million (increase
    of 21%). The AdjustedEBITDA in this quarter amounted to NIS64 million
    compared to NIS 57 million in the corresponding quarter last year.
  oIn the Supermarkets segment: An activity to increase the market share of
    Mega resulted, for the first time in six quarters, an increase in the
    same stores sales (SSS) in this quarter compared to the corresponding
    quarter last year. This activity included, among others, the reduction of
    prices at an average rate of 1.8%. 
  oIn the Real Estate segment: BSRE  presents a continuing increase in NOI 
    (NIS 53 million in this quarter). The Company continues the development
    and the betterment of projects under construction and completed in this
    quarter, the sale of 50% of the Comverse Building in Ra'anana in
    consideration of NIS 51 million.
  oIn the Non Food segment (from continuing operations): an increase in sales
    of approximately 14% and increase in operating profit before other
    expenses of 6% in this quarter compared to the corresponding quarter last
    year.

Segment Profits:

Operating Profit in millions of NIS   Q1 2013 Q1 2012 Rate of change
Fueling and Commercial sites          36.6    28.5    28%
Supermarkets                          (3.1)   16.5    -
Non-Food (from continuing operations) 7.4     7.0     6%
Real Estate                           4.7     4.3     9%

Comments of Management
Mr. David Weissman, CEO and Chief Business Officer

"In the current quarter we put a special emphasis on the improvement of cash
flows from operating activity which amounted to NIS 309 million in this
quarter, an increase of 93% compared to the corresponding quarter. The
impressive improvement in the cash flows from operating activity derived from
measures taken to improve the working capital and reducing customer days and
inventory.

Dor Alon continues to take efficacy measures that resulted in the improvement
of operating results of approximately 20% and an increase in net income of 49%
and an impressive increase in cash flows from operating activity of NIS 174
million compared to the corresponding quarter last year. 

BSRE continues to present an improvement in its current activity and continues
the development and initiation of 7 projects. In January 2013, the Company
admitted Harel, Insurance Company, as a partner (50%) in Comverse Building,
which is under construction.

The Supermarkets segment is on the change of trend and for the first time
after six quarters, Mega moved in the SSS stores to a positive increase while
Mega Bool leads the change-over with an increase of over 7% in the SSS stores
while improving all other operating criteria in all the chain, an increase in
sales per sq.m of 3.9% and an increase in sales per position of 4.2%. The
change of trend came at the expense of the gross profit while at the same time
the Company works on an innovative strategic plan with international sources.
In June, the Company intends to present the strategic plan for the coming
years, which includes operating and structural changes in Mega. 

In the Non Food segment, the Company is in merger procedures with BEE Retail
and Mega, such that the logistic center and headquarters shall be assimilated
in Mega and Na'aman shall become a subsidiary of Mega. In this quarter,
Na'aman presents an improvement in its results compared to the corresponding
quarter last year, which derives from an increase in sales following marketing
efforts and the Passover holiday.

YouPhone brand turned into a legitimate factor, as a cellular network, which
brings innovation and the lowest prices in the market. The rate of joining new
customers stands at 20,000 per quarter. The establishment costs of the company
are part of the Company's operating expenses."

Results for the first quarter of 2013[2]

Gross revenues
Revenues (including government levies) in the first quarter of 2013 amounted
to NIS 3,792.8 million (U.S. $1,039.7 million) as compared to revenues of NIS
3,826.2 million in the comparable quarter last year, a decrease of 0.9%. The
decrease mainly derives from decrease in revenues of Dor Alon compared to the
corresponding quarter last year.

Revenues from sales, net

Revenues of the Fueling and Commercial sites segment – amounted in this
quarter to NIS 1,337.5 million (U.S. $366.6 million) as compared to NIS
1,387.6 million in the corresponding quarter last year, a decrease of 3.6%.
The main decrease was due to discontinued sales to the Palestinian authority.

Revenues of the Supermarkets segment – amounted in this quarter to NIS 1,627.6
million (U.S. $446.2 million) as compared to NIS 1,626.0 million in the
corresponding quarter last year, with no material change. The sales of the
same store sales (SSS) increased in this quarter at a rate of 2.1% compared to
the corresponding period last year and were offset from a decrease of 3% in
selling spaces following the closing of branches during the last 15 months.

Revenues of the Non-Food segment – an increase in revenues by 22% from NIS
87.6 million in the first quarter of 2012 to NIS 106.9 million (U.S. $29.3
million) in the current quarter. The increase in revenues is mainly due to an
increase in sales in the home activity and in the textile activity resulting
from expanding the marketing activities and the Passover holiday timing that
occurred this year earlier than last year.

Revenues of the Real Estate segment – an increase in rental income of 31% from
NIS 7.2 million in the first quarter of 2012 to NIS 9.4 million (U.S. $2.6
million) in the current quarter. The increase in rental income in this quarter
mainly derives from increase in spaces rented to external parties.

Gross profit in the first quarter of 2013 amounted to NIS 656.6 million (U.S.
$180.0 million) (21.3% of revenues) as compared to gross profit of NIS 674.2
million (21.7% 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 segment.

In the Fueling and Commercial sites segment, gross profit amounted to NIS
190.0 million (U.S. $52.1 million), (14.2% of revenues) compared to NIS 184.2
million in the comparable quarter last year (13.3% of revenues). The increase
in the gross profit mainly derived from the increased profitability of the
convenience stores.

In the Supermarkets segment, gross profit amounted to NIS 406.9 million (U.S.
$111.5 million), (25.0% of revenues) compared to NIS 436.6 million in the
first quarter of 2012 (26.8% of revenues), a decrease of 6.8% stemming from a
decrease in the gross profit following the reduction of margins.

In the Non Food segment, gross profit amounted to NIS 53.0 million (U.S. $14.5
million), (49.6% of revenues) compared to NIS 46.3 million in the first
quarter of 2012 (52.8% of revenues), an increase of 14.5% that mainly derives
from increase in sales, as aforementioned.

Selling, general and administrative expenses in the first quarter of 2013
amounted to NIS 636.2 million (U.S. $174.4 million) (20.6% of revenues),
compared to expenses of NIS 639.4 million (20.6% of revenues) in the
comparable quarter last year.

In the Fueling and Commercial sites segment, these expenses amounted to NIS
153.4 million (U.S. $42.1 million) compared to NIS 155.6 million in the first
quarter of 2012, a decrease of 1.4%, mainly deriving from efficiency measures.

In the Supermarkets segment, selling, general and administrative expenses 
amounted to NIS 409.9 million (U.S. $112.4 million) compared to expenses of
NIS 420.0 million in the first quarter of 2012, a decrease of 2.4% in expenses
that mainly derives from efficacy measures and exiting branches.

In the Non Food segment, these expenses amounted to NIS 45.6 million (U.S.
$12.5 million) compared to NIS 39.2 million in the first quarter of 2012, an
increase of 16.2% in expenses that mainly derives from increase in sales and
increase in marketing and advertising expenses.

In the Real Estate segment, these expenses amounted to NIS 4.7 million (U.S.
$1.3 million) compared to NIS 2.8 million in the first quarter of 2012.

Operating profit (before other gains and losses and changes in fair value of
investment property) in the first quarter of 2013 amounted to NIS 20.4 million
(U.S. $5.6 million) (0.7% of revenues) as compared to NIS 34.8 million (1.1%
of revenues) in the comparable quarter last year, a decrease of 41.4%. The
decrease in the operating profit was mainly due to losses incurred by the
Supermarkets segment.

In the Fueling and Commercial sites segment, operating profit in this quarter
amounted to NIS 36.6 million (U.S. $10.0 million) compared to operating profit
of NIS 28.5 million in the first quarter of 2012, an increase of 28.1%. The
increase derives from improvement of gross profit and from decrease in
selling, general and administrative expenses.

In the Supermarkets segment, operating loss amounted to NIS 3.0 million (U.S.
$0.8 million) compared to operating profit of NIS 16.5 in the first quarter of
2012. The transfer to a loss derives from erosion of gross profit rate and was
partly offset from decrease in selling, general and administrative expenses.

In the Non Food segment, operating profit amounted to NIS 7.4 million (U.S.
$2.0 million) as compared to an operating profit of NIS 7.0 million in the
first quarter of 2012, an increase of 5.9%. The increase in the operating
profit derives from increase in sales and was partly offset from increase in
selling, general and administrative expenses.

In the Real Estate segment, the operating profit in this quarter amounted to
NIS 4.7 million (U.S. $1.3 million) compared to NIS 4.3 million in the first
quarter of 2012, an increase of 9.0%. The increase in the operating profit
derives from increase in rental income and was partly offset from increase in
selling, general and administrative expenses.

Changes in fair value of investment property in this quarter the Company
recorded a profit in the amount of NIS 5.5 million (U.S. $1.5 million)
compared to a profit of NIS 2.7 million in the first quarter of 2012. The main
profit in this quarter derives from revaluation of Comverse Building in
Ra'anana, which half was realized in this quarter.

Other income (expenses), net other expenses in this quarter amounted to NIS
6.3 million (U.S. $1.7 million) compared to other expenses of NIS 0.1 million
in the first quarter of 2012.

Operating profit amounted to NIS 19.3 million (U.S. $5.3 million) (0.6% of
revenues) as compared to operating profit of NIS 40.8 million (1.3% of
revenues) in the first quarter of 2012, a decrease of 52.7%.

Finance costs, net in this quarter amounted to NIS 53.8 million (U.S. $14.8
million) as compared to net finance costs of NIS 39.6 million in the first
quarter of 2012. The increase in finance costs, net derives from an increase
in the Company's indebtedness and from a decrease in finance income.

Taxes on income tax benefit in this quarter amounted to NIS 2.6 million (U.S.
$0.7 million) as compared to tax benefit of NIS 4.4 million in the first
quarter of 2012.

Income (loss) from continuing operation in this quarter loss amounted to NIS
31.9 million (U.S. $8.8 million) compared to an income of NIS 5.6 million in
the first quarter of 2012. The loss in this quarter attributed to the
Company's shareholders amounted to NIS 39.6 million (U.S. $10.9 million) or
NIS 0.60 per share (U.S. $0.17) and the income attributed to non-controlling
interests amounted to NIS 7.7 million (U.S. $2.1 million).

Net loss from discontinued operation in this quarter amounted to NIS 2.0
million (U.S. $0.6 million) or NIS 0.03 per share (U.S. $0.01) compared to a
loss of NIS 3.4 in the first quarter of 2012, which attributed in its entirety
to the Company's shareholders.

Cash flows for the first quarter of 2013

Cash flows from operating activities: Net cash flow provided by operating
activities amounted to NIS 309.6 million (U.S. $84.8 million) in the first
quarter of 2013 compared to NIS 159.6 million from operating activities in the
comparable quarter last year. The main increase derives from a decrease in
working capital needs following measures taken to reduce customer days and
reduction of inventories in the amount of NIS 128 million (U.S. $35.1 million)
and from tax refunds in this quarter of NIS 42.8 million (U.S. $11.7 million)
compared to tax payments of NIS 10.0 million in the corresponding quarter last
year offset by a decrease in operating profit of NIS 14.4 million (U.S. $3.9
million).

Cash flows used in investing activities: Net cash flows used in investing
activities amounted to NIS 47.2 million (U.S. $12.9 million) in this quarter
as compared to net cash used in investing activities of NIS 151.3 million in
the comparable quarter. Cash flows used in investing activities in this
quarter mainly included the purchase of investment property, property and
equipment and intangible assets of total NIS 50.4 million (U.S. $13.8
million), the grant of long term loans of NIS 26.8 million (U.S. $7.3 million)
and was offset by proceeds from realization of investment property of NIS 45.1
million (U.S. $12.4 million), repayment of long term loans of NIS 17.5 million
(U.S. $4.8 million), and interest received of NIS 8.7 million (U.S. $2.4
million). In the first quarter of 2012 the cash flows used in investing
activities mainly included the purchase of property and equipment, investment
property and intangible assets of NIS 97.1 million, grant of long term loans
of NIS 23.6 million and investment in securities in the amount of NIS 95.2
million, net of proceeds from realization of securities in the amount of NIS
65.2 million.

Cash flows used in financing activities: Net cash flows used in financing
activities amounted to NIS97.9 million (U.S. $26.8 million) in this quarter
as compared to net cash flows deriving from financing activities of NIS 13.1
million in the corresponding quarter last year. The cash flows used in
financing activities this quarter mainly included interest payments of
NIS62.5 million (U.S. $17.1 million), decrease in short term bank credit, net
of NIS 172.2 million (U.S. $47.2 million), repayment of loans of NIS 53.8
million (U.S. $14.7 million) and was partly offset by issuance of debentures
of NIS 152.3 million (U.S. $41.7 million) and receiving loans of NIS 40.7
million (U.S. $11.1 million). The net cash flows deriving from financing
activities in the first quarter of 2012 included mainly the issuance of
debentures of NIS 264.2 million and was offset by repayment of loans of NIS
119.0 million, decrease in short term credit, net, in the amount of NIS 71.3
million and from interest payments of NIS 56.3 million.

Additional Information

1.Adjusted EBITDA (Earnings before Interest, Taxes, Depreciation, and
    Amortization)[3] in the first quarter of 2013 adjustedEBITDA was NIS 98.6
    million (U.S. $27.0 million) (3.2% of revenues) compared to NIS 114.7
    million (3.7% of revenues) in the first quarter of 2012.

Events during the reporting period

General

  a. Effective January 1, 2013, the Company applies IFRS 11 "Joint
  Arrangements". The application is retrospective. Jointly controlled entities
  presented in the past in the consolidated statements using the proportionate
  consolidation method are presented in these financial statements as part of
  the associates. 

  The following presents the effect on the financial statements as of December
  31, 2012 and March 31, 2012 and for the periods then ended:





The effect on the statement of financial position:
                         December 31, 2012

                         (Unaudited)
                         As previously The effect of As reported after
                         reported     retrospective the application
                                       application   of the standard
                         NIS in millions
Current assets           3,387         (53)          3,334
Non-current assets
Investment in associates 349           572           921
Other non-current assets 5,757         (798)         4,959
Current liabilities      4,074         (80)          3,994
Non-current liabilities  3,813         (180)         3,633
Equity                   1,606         (19)          1,587
                         March 31, 2012

                         (Unaudited)
                         As previously The effect of As reported after
                         reported     retrospective the application
                                       application   of the standard
                         NIS in millions
Current assets           3,739         (68)          3,671
Noncurrent assets
Investment in associates 206           554           760
Other non-current assets 5,793         (765)         5,028
Current liabilities      4,110         (123)         3,987
Non-current liabilities  4,079         (155)         3,924
Equity                   1,549         (1)           1,548





Effect on the statement of income:
                                 Year ended December 31, 2012

                                 (Unaudited)
                                 As previously The effect of As reported after
                                 reported     retrospective the application
                                               application   of the standard
                                 NIS in millions
Revenues, net                    12,850        (165)         12,685
Gross profit                     2,842         (90)          2,752
Operating profit before changes  184           (11)          173
Share in gains of associates     -             87            87
Increase in fair value of
investment                       107           (90)          17

 property, net
Other gains, net                 23            (19)          4
Operating profit after changes   314           (33)          281
Finance expenses, net            (246)         7             (239)
Tax benefit (taxes on income)    (16)          19            3
Share in gains of associates     12            (12)          -
Net income from continuing       64            (19)          45
operation



The main decrease in the profit in 2012 derives from eliminating profit, loss
of control in a jointly controlled entity as a result of applying IFRS 11.



                                 Three months ended March 31, 2012

                                 (Unaudited)
                                 As previously The effect of As reported after
                                 reported     retrospective the application
                                               application   of the standard
                                 NIS in millions
Revenues, net                    3,152         (44)          3,108
Gross profit                     696           (22)          674
Operating profit before changes  38            (3)           35
Share in gains of associates     -             3             3
Increase in fair value of
investment                       3             -             3

 property, net
Other gains, net                 -             -             -
Operating profit after changes   41            -             41
Finance expenses, net            (42)          2             (40)
Tax benefit                      4             -             4
Share in gains of associates     3             (3)           -
Net income from continuing       6             (1)           5
operation





Effect on the statement of cash flows:
                                 Year ended December 31, 2012

                                 (Unaudited)
                                 As previously The effect of As reported after
                                 reported     retrospective the application
                                               application   of the standard
                                 NIS in millions
Net cash provided by operating   299           203           502
activity
Net cash used in investing       (573)         177           (396)
activity
Net cash provided by financing   482           (381)         101
activity
 Increase in cash and cash     208           (1)           207
equivalents
Balance of cash and cash
equivalents at                   74            (22)          52

 the beginning of the year
Translation differences on cash
and cash                         -             -             -

 equivalents
 Balance of cash and cash
equivalents at                   282           (23)          259

 the end of the year

                                 Three months ended March 31, 2012

                                 (Unaudited)
                                 As previously The effect of As reported after
                                 reported     retrospective the application
                                               application   of the standard
                                 NIS in millions
Net cash provided by operating   157           2             159
activity
Net cash used in investing       (156)         5             (151)
activity
Net cash provided by financing   21            (8)           13
activity
 Increase in cash and cash    22            (1)           21
equivalents
Balance of cash and cash
equivalents at the               74            (22)          52

 beginning of the period
Translation differences on cash
and cash                         -             -             -

 equivalents
 Balance of cash and cash
equivalents                      96            (23)          73

 at the end of the period

b.On March 22, 2013, Mrs. Limor Ganot was appointed as co-CEO of the Company.
The appointment is in effect from April 1, 2013.

c.On April 24, 2013, the Company changed its name from "Alon Holdings Blue
Square Israel Ltd" to "Alon Blue Square Israel Ltd".

d.The Company resolved to merge BEE group into Mega Retail. The merger will
be consummated in 2013.

Fueling and Commercial sites segment

a.As of March 31, 2013, Dor Alon operated203 fueling stations and 209
convenience stores in various formats.

b.Dor Alon declared a dividend of NIS 20 million (U.S $5.5 million). The
Company's share is NIS 15.7 million (U.S $4.3 million). The dividend was paid
on April 9, 2013.

Supermarkets segment

a.As of March 31, 2013, the Company operated 211 supermarkets divided as
follows: Mega In Town - 119; Mega Bool - 66; Zol Beshefa - 15; Eden Teva
Market - 20 of which 9 Eden within Mega.

b.As of March 31, 2013, the Company operated branches in a total area of
365,400 sq.m. Sales per meter amounted in the first quarter of 2013 to NIS
4,460 (U.S. $1,223) compared to NIS 4,293 in the corresponding quarter last
year.
During the quarter ending on March 31, 2013, one branch with a total area of
3,600 sq.m was closed.

Non Food segment

a.As of March 31, 2013, Bee Group operates 138 branches (of which 22
franchised).
b.Discontinued activity – in view of the Company's resolution from December
2012, to realize Kfar Hasha'shuim (Kfar), the results of Kfar are included in
the consolidated statement of operations under "Loss from discontinued
operation (after tax)".

Following are the operating results of Kfar for the reported periods:



                               Year ended  Three months ended
                               December 31 March 31
                               2012        2012      2013
                               (Audited)   (Unaudited)
Sales                          115,214     26,511    33,155
Gross profit                   23,308      2,493     6,138
Operating profit (loss)        (12,648)    (2,373)   25
Net loss included in loss from
                               (22,468)    (3,403)   (2,018)
 discontinued operations



Real Estate segment

a. Comverse Building

  On January 21, 2013, BSRE entered into an agreement for the sale of half of
  its rights in the property to Harel Investments, Insurance and Financial
  Services Ltd. (Harel) in return for NIS 51 million and shall bear 50% of the
  remaining establishment costs. In addition, BSRE is entitled to an
  additional consideration for building rights of 2,500 sq.m that were not yet
  utilized and such consideration is to be payable according to the agreement.
  The agreement further determines that if the building rights in the real
  estate are increased, Harel shall have the option to purchase 50% of these
  rights at a consideration to be determined according to the value of the
  rights. A collaboration agreement was signed between BSRE and Harel. The
  above consideration reflects the fair value of part of the real estate that
  was realized and therefore, in the reported period, the Company recorded
  gain from change in value of investment property of NIS 5.5 million in
  addition to a gain that was recorded in 2012 in the amount of NIS 4 million.

b. Cohen Building in Petach Tikva

  In November 2012, BSRE granted an option to purchase the property in Petach
  Tikva subject to various conditions in return for NIS 56 million. On March
  6, 2013, the option was exercised and a sale agreement was signed. The
  purchasers did not complete the first payment according to the date set
  forth in the sale agreement. An extension was granted to the purchasers to
  complete the payment and the rest of the payments according to the
  agreement.

c. BSRE declared a dividend of NIS 50 million (U.S. $13.7 million),
the Company's share amounts to NIS 39 million (U.S. $10.7 million). The
dividend was paid on April 23, 2013.

Issuance of bonds

a. On January 31, 2013, the bonds series of Dor Alon (Series C and D) was
expanded by a private offering of NIS 21 million par value of bonds (Series C)
to institutional investors for 97.95% of their par value, reflecting a return
of 5.3% and NIS 129 million par value of bonds (Series D) for 103.8% of their
par value, reflecting a return of 5.2%.

b. On May 13, 2013, Midroog announced the ratification of the A2 rating on
bonds (series A and C) issued by the Company, while changing the outlook from
stable to negative. In addition, Midroog ratifies the P-1 rating with for
commercial paper issued by the Company in the amount of NIS 75 million up to
NIS 120 million.

c. On May 20, 2013 the bonds series of BSRE (Series D) was expanded by a
privet offering of NIS 76 million par value of bonds (Series D) to
institutional investors for 117.9% of their par value, reflecting a return of
2.8%.

d. On May 28, 2013, Midroog announced the ratification of the A1 rating on
bonds (series A to D) issued by BSRE, while changing the outlook from negative
to stable. In addition, Midroog granted A1 rating with stable outlook for
bonds up to NIS 100 million par value which BSRE intends to issue by expanding
one of its existing series.

Post balance sheet events

On May 7, 2013, the Company sold 3.5% of BSRE shares for NIS 49 million. After
the sale, the Company holds 74.76% of BSRE share capital.

NOTE A: Convenience Translation to Dollars
The convenience translation of New Israeli Shekel (NIS) into U.S. dollars was
made at the exchange rate prevailing at March 31, 2013: U.S. $1.00 equals NIS
3.648. The translation was made solely for the convenience of the reader.

Alon Blue Square Israel Ltd. (hereinafter: "Alon Blue Square") is the leading
retail company in the State of Israel and operates in four reporting segments:
In its supermarket segment, Alon Blue Square, as a pioneer in the modern food
retail, through its 100% subsidiary, Mega Retail Ltd., currently operates 211
supermarkets under different formats, each offering a wide range of food
products, "Near Food" products and "Non-Food" products at varying levels of
service and pricing. In its "Non-Food" segment, Alon Blue Square, through its
100% subsidiary BEE Group Retail Ltd., operates specialist outlets in
self-operation and franchises and offers a wide range of "Non-Food" products
as retailer and wholesaler. In the Fueling and Commercial Sites segment,
through its 78.43% subsidiary, which is listed on the Tel Aviv stock exchange
("TASE"), Dor Alon Energy in Israel (1988) Ltd is one of the four largest fuel
retail companies in Israel based on the number of petrol stations and a leader
in the field of convenience stores. Dor Alon operates a chain of 203 petrol
stations and 209 convenience stores in different formats in Israel. In its
Real Estate segment, Alon Blue Square, through its TASE traded 74.76%
subsidiary Blue Square Real Estate Ltd., owns, leases and develops yield
generating commercial properties and projects. In other segments, Alon Blue
Square through its 100% subsidiary, Alon Cellular Ltd, operates an MVNO
network in Israel and through Diners Club Israel Ltd., an associate held at
49%, which operates in the sector of issuance and clearance of YOU credit
cards to the customer club members of the group.

Forward-looking statements

This press release contains forward-looking statements within the meaning of
safe harbor provisions of the U.S. Private Securities Litigation Reform Act of
1995.Forward-looking statements may include, but are not limited to, plans
or projections about our business, our future revenues, expenses and
profitability. Forward-looking statements may be, but are not necessarily,
identified by the use of forward-looking terminology such as "may,"
"anticipates," "estimates," "expects," "intends," "plans," "believes," and
words and terms of similar substance.Forward-looking statements involve
known and unknown risks, uncertainties and other factors that may cause actual
events, results, performance, circumstance and achievements to be materially
different from any future events, results, performance, circumstance and
achievements expressed or implied by such forward-looking statements. These
risks, uncertaintiesand other factors include, but are not limited to, the
following:the effect of the economic conditions in Israel on the sales in our
stores and of our products and on our profitability; our ability to compete
effectively against low-priced supermarkets, large fuel companies and our
other competitors; enactment of new laws and regulations, including the
enactment of recommendations of governmental appointed committees and
regulations with respect to the procurement of petroleum products by fuel
companies and the price of petroleum products that are subject to regulation;
quarterly fluctuations in our operating results that may cause volatility of
our ADS and share price; fluctuations in the price of petroleum products and
increases in excise tax rates imposed on the sale of petroleum products in
Israel; risks associated with our dependence on a limited number of key
suppliers for products that we sell in our stores; the effect of an increase
in the minimum wage in Israel on our operating results; the effect of any
actions taken by the Israeli Antitrust Authority on our ability to execute our
business strategy and on our profitability; the effect of increases in oil,
raw material and product prices in recent years; the effects of damage to our
reputation or to the reputation of our store brands due to reports in the
media or otherwise; government policies with respect to residential building
may have a negative impact on our operations in residential building, and
other risks, uncertainties and factors disclosed in our filings with the U.S.
Securities and Exchange Commission (SEC), including, but not limited to,
risks, uncertainties and factors identified under the heading "Risk Factors"
in our annual report on Form 20-F for the year ended December 31, 2012.You
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of this press release.Except for our ongoing
obligations to disclose material information under the applicable securities
laws, we undertake no obligation to update the forward-looking information
contained in this press release.



ALON BLUE SQUARE ISRAEL LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF MARCH 31, 2013
(UNAUDITED)


                                                                Convenience
                                                                translation 
                            December 31,  March 31,            March 31,
                            2012*         2012*      2013       2013
                            NIS                                 U.S. dollars
                            In thousands
A s s e t s
CURRENT ASSETS:
Cash and cash equivalents   261,674       86,953     419,178    114,906
Investment in securities    325,313       330,950    360,863    98,921
Short-term bank deposits    96,146        96,331     103,487    28,368
Trade receivables           1,415,828     1,682,263  1,440,508  394,876
Other accounts receivable
including
 current           271,258       573,781    577,447    158,291
maturities of long term

 loans granted
Assets classified as held   94,216        -          45,600     12,500
for sale
Assets of disposal groups
classified as               133,915       -          136,555    37,433

 held for sale
Income taxes receivable     90,882        127,096    34,941     9,578
Inventories                 644,809       773,872    609,701    167,133
                                          
                            3,334,041                3,728,280  1,022,006
                                          3,671,246
NON-CURRENT ASSETS:
 Investments in           921,227       759,716    919,493    252,054
associates
 Derivative financial     1,790         1,312      3,374      925
instruments
 Real estate inventories  106,064       99,683     105,641    28,958
Investments in securities   48,609        36,419     54,300     14,885
 Loans receivable, net
of current                  200,294       185,984    204,960    56,184

 maturities
 Property and equipment,  2,651,678     2,767,739  2,618,968  717,919
net
 Investment property      543,873       489,495    561,732    153,984
Intangible assets, net      1,258,828     1,305,650  1,244,701  341,202
 Other long-term          33,251        35,457     36,484     10,001
receivables
 Deferred taxes           114,805       106,741    126,191    34,592
                                          
                            5,880,419                5,875,844  1,610,704
                                          5,788,196
Total assets                9,214,460     9,459,442  9,604,124  2,632,710





ALON BLUE SQUARE ISRAEL LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF MARCH 31, 2013
(UNAUDITED)
                                                                  Convenience
                                                                  translation
                              December 31,  March 31,            March 31,
                              2012*         2012*      2013       2013
                              NIS                                 U.S. dollars
                              In thousands
Liabilities and
shareholders' equity
CURRENT LIABILITIES:
Credit and loans from banks   1,129,526     924,129    947,670    259,778
and others
Current maturities of
debentures and                556,188       212,173    593,947    162,814

 convertible debentures
Current maturities of
long-term loans               247,581       266,987    235,913    64,669

 from banks
Trade payables                1,228,013     1,585,458  1,441,889  395,255
Other accounts payable and
accrued                       628,915       886,607    897,129    245,926

 expenses
Customers' deposits           28,011        27,692     27,881     7,643
Derivative financial          17,566        11,002     17,658     4,840
instruments
Income taxes payable          10,124        5,001      9,213      2,525
Provisions                    60,578        67,689     60,221     16,508
Liabilities of disposal
groups
                              87,794        -          89,870     24,635
 classified as held for
sale
                              3,994,296     3,986,738  4,321,391  1,184,593
NON CURRENT LIABILITIES:
Long-term loans from banks
and others, net of current    1,134,436     1,148,293  1,133,440  310,702
maturities
Convertible debentures, net
of current                    90,402        118,671    90,200     24,726

 maturities
Debentures, net of current    2,048,829     2,296,088  2,163,434  593,046
maturities
Other liabilities             142,016       157,234    139,010    38,106
Derivative financial          6,382         13,787     3,823      1,048
instruments
Liabilities in respect of
employee
                              69,457        58,962     69,636     19,089
 benefits, net of
amounts funded
Deferred taxes                141,093       131,189    143,170    39,246
                              3,632,615     3,924,224  3,742,713  1,025,963
Total liabilities             7,626,911     7,910,962  8,064,104  2,210,556
EQUITY:
Equity attributed to equity
holders of

 the Company:
Ordinary shares of NIS 1 par  79,881        79,881     79,881     21,897
value
Additional paid-in capital    1,219,279     1,219,279  1,219,279  334,232
Other reserves                9,245         (10,321)   10,092     2,766
Accumulated deficit           (129,666)     (112,801)  (170,948)  (46,861)
                              1,178,739     1,176,038  1,138,304  312,034
 Non-controlling          408,810       372,442    401,716    110,120
interests
Total equity                  1,587,549     1,548,480  1,540,020  422,154
Total liabilities and equity  9,214,460     9,459,442  9,604,124  2,632,710
* Retroactive application, see events during the reporting period





ALON BLUE SQUARE ISRAEL LTD.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)
                                                             Convenience
                                                             translation
                                                             for the three
                            Year ended  Three months
                                                             months
                            December 31, ended March 31,   ended March 31,
                            2012*        2012*     2013      2013
                            In thousands (except per share data)
Revenues                    15,640,331   3,826,175 3,792,802 1,039,694
Less – government levies    2,955,154    717,857   703,534   192,855
Net revenues                12,685,177   3,108,318 3,089,268 846,839
Cost of sales               9,932,721    2,434,157 2,432,676 666,852
Gross profit                2,752,456    674,161   656,592   179,987
Selling, general and        2,579,770    639,385   636,224   174,404
administrative expenses
Operating profit before
other gains and losses
 and changes in fair     172,686      34,776    20,368    5,583
value of investment

 property
Other gains                 19,941       -         30        8
Other losses                (15,663)     (72)      (6,304)   (1,728)
Increase in fair value of
investment property,        16,874       2,685     5,559     1,524

 net
Share in gains (losses) of  87,060       3,380     (389)     (107)
associates
Operating profit           280,898      40,769    19,264    5,280
Finance income              83,002       21,064    16,789    4,602
Finance expenses            (321,930)    (60,647)  (70,639)  (19,364)
Finance expenses, net       (238,928)    (39,583)  (53,850)  (14,762)
Income before taxes on      41,970       1,186     (34,586)  (9,482)
income
Taxes on income             (2,863)      (4,381)   (2,638)   (723)
Net income (loss) from      44,833       5,567     (31,948)  (8,759)
continued operations
Net loss from discontinued  22,468       3,403     2,018     553
operation
                            22,365       2,164     (33,966)  (9,312)
Attributable to:
Equity holders of the       (17,907)     (6,829)   (41,655)  (11,418)
Company
Non-controlling interests   40,272       8,993     7,689     2,106
Earnings per ordinary share
or ADS

  attributable to equity
holders of the

  company
Basic and fully diluted
 Continuing operations     0.29         (0.05)    (0.60)    (0.16)
 Discontinued operations   (0.34)       (0.05)    (0.03)    (0.01)
                            (0.05)       (0.10)    (0.63)    (0.17)
Weighted average number of
shares or ADSs

used for computation of
earnings per share:
Basic and fully diluted     65,954       65,954    65,954    65,954





ALON BLUE SQUARE ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)
                                                              Convenience
                                                              translation
                              Year ended  Three months ended for the three
                                                              months ended
                              December 31, March 31,         March 31,
                              2012*        2012*     2013     2013
                              NIS in thousands                U.S. dollars in
                                                              thousands
CASH FLOWS FROM OPERATING
ACTIVITIES:
Income (loss) before taxes
on income from               41,970       1,186     (34,586) (9,482)

 continuing operations
Loss before taxesfrom        (17,468)     (3,403)   (2,018)  (553)
discontinued operation
Income tax (paid) received,   18,714       (10,018)  42,828   11,740
net
Adjustments for cash          458,957      171,845   303,351  83,158
generated from operations
Net cash provided by          502,173      159,610   309,575  84,863
operating activities
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and      (164,458)    (73,528)  (24,192) (6,632)
equipment
Purchase of investment        (64,546)     (7,049)   (20,862) (5,719)
property
Purchase of intangible assets (43,392)     (16,506)  (5,334)  (1,462)
Proceeds from collection of
(investment in)
                              5,166        4,981     (7,341)  (2,012)
 short-term bank
deposits, net
Proceeds from sale of         20,139       438       1,814    497
property and equipment
Proceeds from sale of         3,610        -         45,090   12,360
investment property
Proceeds from sale of        150,945      65,246    34,080   9,342
marketable securities
Investment in marketable      (178,149)    (95,191)  (67,669) (18,550)
securities
Grant of loans to associates  (124,488)    (6,230)   (1,075)  (295)
Investment in associates      (391)        (7,715)   (1,157)  (317)
Grant of long term loans     (37,585)     (23,583)  (26,835) (7,356)
Collection of long-term loans 13,524       3,174     17,513   4,801
Interest received             24,349       4,615     8,734    2,394
Net cash used in investing
                              (395,276)    (151,348) (47,234) (12,949)
 activities





ALON BLUE SQUARE ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)
                                                               Convenience
                                                               translation
                              Year ended  Three months ended  for the three
                                                               months ended
                              December 31, March 31,          March 31,
                              2012*        2012*     2013      2013
                              NIS in thousands                 U.S. dollars
                                                               in thousands
CASH FLOWS FROM FINANCING

 ACTIVITIES:
Issuance of debentures        504,136      264,242   152,263   41,739
Repayment of debentures       (209,321)    (3,795)   (2,377)   (652)
Transactions with
non-controlling interests
                              (467)        (682)     -         -
 in subsidiary without
loss of control
Receipt of long-term loans    226,478      -         40,653    11,144
Repayment of long-term loans  (342,314)    (119,013) (53,807)  (14,750)
Short-term credit from banks  177,795      (71,301)  (172,156) (47,192)
and others, net
Settlement of forward         (2,808)      -         -         -
contracts
Interest paid                 (252,955)    (56,308)  (62,495)  (17,131)
Net cash provided by (used
in) financing                 100,544      13,143    (97,919)  (26,842)

 activities


INCREASE IN CASH AND CASH   207,441      21,405    164,422   45,072

 EQUIVALENTS AND BANK
OVERDRAFTS
Translation differences on    (1)          (4)       (2)       (1)
cash and cash equivalents
BALANCE OF CASH AND CASH

 EQUIVALENTS AND BANK
                              51,605       51,605    259,045   71,010
 OVERDRAFTS AT BEGINNING OF

 PERIOD
BALANCE OF CASH AND CASH

 EQUIVALENTS AND BANK       259,045      73,006    423,465   116,081

 OVERDRAFTS AT END OF
PERIOD

(Continued - 2)



ALON BLUE SQUARE ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)


                                                                Convenience
                                                                translation
                                                                for the three
                               Year ended   Three months        months ended
                               December 31, ended March 31,    March 31,
                               2012*        2012*     2013      2013
                               NIS                              U.S. dollars
                               In thousands
(a) Net cash provided by
    operating activities:
    Adjustments for:
    Depreciation and           278,514      67,402    67,282    18,444
    amortization
    Increase in fair value of  (16,874)     (2,685)   (5,559)   (1,524)
    investment property, net
    Share in losses (profit)   (87,060)     (3,380)   389       107
    of associates, net
    Dividend received          41,544       -         4,119     1,129
    Share based payment        (493)        463       (151)     (41)
    Loss (gain) from sale and
    disposal of property      (14,684)     32        153       43

     and equipment, net
    Provision for impairment
    of property and            -            189       -         -

     equipment, net
    Gain from changes in fair
    value of derivative       (1,437)      (2,357)   (3,570)   (979)

     financial instruments
    Linkage differences on
    monetary assets,
                               29,208       2,005     1,863     511
     debentures, loans and
    other long term
    liabilities
    Employee benefit           2,246        (2,082)   199       55
    liability, net
    Decrease (increase) in
    value of investment in

     securities, deposits    1,622        8,973     (87)      (24)
    and long-term receivables,

     net
    Interest paid, net         227,186      49,700    56,026    15,358
    Changes in operating
    assets and liabilities:
    Investment in real estate  ( 380)       (823)     (555)     (152)
    inventories
    Decrease (increase) in
    trade receivables and      67,550       (386,412) (333,901) (91,530)

     other accounts
    Increase (decrease) in
    trade payables and other   (56,025)     547,489   482,721   132,626

     accounts payable
    Decrease (increase) in    (11,960)     (106,669) 34,422    9,435
    inventories
                               458,957      171,845   303,351   83,158

(Concluded - 3)



ALON BLUE SQUARE ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)
                                                                 Convenience
                                                                 translation
                                                                 for the three
                                   Year ended   Three months     months ended
                                   December 31, ended March 31, March 31,
                                   2012         2012    2013     2013
                                   NIS                           U.S. dollars
                                   In thousands
(b) Supplementary information on
investing and

 financing activities not
involving cash flows:
Purchase of property and equipment 27,866       4,930   13,182   3,613
on credit
Dividends declared to              -            -       15,215   4,171
non-controlling interests
Realization of property and        11,000       -       -        -
equipment



ALON BLUE SQUARE ISRAEL LTD.
NET LIABILITIES
(UNAUDITED)
                                                                  Convenience
                                                                  translation
                                 December 31, March 31,          March 31,
                                 2012*        2012*     2013      2013
                                 NIS                              U.S. dollars
                                 In thousands
                                 Alon Blue Square**
Cash and cash equivalence        2,039        1,942     4,428     1,214
Investment in securities         68,429       66,345    69,172    18,962
Total assets                     70,468       68,287    73,600    20,176
Short term and Long-term debt:
Short term loans from banks      347,572      167,533   347,289   95,200
Long term loans from banks       156,639      171,569   156,663   42,945
Debentures                       171,002      233,286   172,414   47,263
Total long-term debt             675,213      572,388   676,366   185,408
Equity:
Equity attributable to equity    1,178,739    1,176,038 1,138,304 312,034
holders of the company:
Total debt, net                  (604,745)    (504,101) (602,766) (165,232)

*  Net of grant of loans or loans received from subsidiaries



ALONBLUE SQUARE ISRAEL LTD.
RECONCILIATION BETWEEN NET INCOME FOR THE PERIOD AND ADJUSTED EBITDA
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)
                                                               Convenience
                                                               translation
                                 Year ended   Three months     for the three
                                                               months ended
                                 December 31, ended March 31, March 31,
                                 2012*        2012*   2013     2013
                                 NIS in thousands              U.S. dollars in
                                                               thousands
Net income (loss) from           44,833       5,567   (31,498) ( 8,759)
continuing operations
Tax benefits               (2,863)      (4,381) (2,638)  ( 723)
Share in losses(gains) of  (87,060)     (3,380) 389      107
associates
Share in adjusted EBITDA
of                              39,250       12,095  11,100   3,043
equity accounted investees
Finance expenses, net       238,928      39,583  53,850   14,762
Other losses (gains), net   (4,278)      72      6,274    1,720
Changes in fair value of
investment                      (16,874)     (2,685) (5,559)  ( 1,524)
property
Depreciation and            278,514      67,402  67,282   18,444
amortization
Share based payment              (493)        463     (151)    ( 41)
Adjusted EBITDA             489,957      114,736 98,599   27,029





ALON BLUE SQUARE ISRAEL LTD.
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)

Note 1 - Segment reporting

The Company includes segment information according to IFRS 8. The reporting is
based on the Company's organizational structure, the internal reporting, the
allocation of resources and the decision-making process. The Company presents
four reportingsegments: Supermarkets, Fueling and Commercial sites, Non-Food
Retail and WholesaleandReal Estate in addition to other segment which
includes mainly Cellular activity and the Company's share in the issuance and
clearance activity of credit cards. The segments' results include the
operating profit before financial expenses from continuing operations
including the Company's share in gains (losses) of associates. The segments'
results for prior periods were adjusted[4] in order to reflect the segment's
results and the adjustment to the results in the consolidated report for those
periods from continuing operations.

The Company's operating segments consist of the following:

1.Fueling and commercial sites – Through its subsidiary Dor-Alon the Company
    is engaged in the development, construction and operation of vehicle
    fueling stations, adjacent commercial centers and independent convenience
    stores, marketing of fuel products and other products through the fueling
    stations and convenience stores and direct marketing of distillates to
    customers. The fueling and commercial sites segment is presented according
    to the published financial statements of Dor-Alon, with reclassification
    of credit card fees and with the amortization of the excess of cost
    arising at the time of acquisition allocated to the reconciliation between
    the operating profit of the segment and the total operating profit.
2.Supermarkets – The Company operates the second largest food retail chain
    in Israel. Through its subsidiary, Mega Retail Ltd. ("Mega Retail"), which
    operates Supermarket branches, the Company offers a wide range of food and
    beverage products and "Non-food" items, such as houseware, toys, small
    electrical appliances, computers and computer accessories, entertainment
    and leisure products and textile products and "Near-Food" products, such
    as health and beauty aids, products for infants, cosmetics and hygiene
    products. As of March 31, 2013, Mega Retail operated 211 supermarkets.
    This segment also includes properties owned through Blue Square Real
    Estate ("BSRE"), in connection with the supermarket operation of Mega
    Retail's stores (including warehouses and offices).
3.Non-Food (Retail and Wholesale) – Mostly through its subsidiary, BEE Group
    Retail Ltd. ("BEE Group"), the Company is engaged in non-food retail and
    wholesale activities. As of March 31, 2013, the Company operated 138
    non-food retail outlets, some through franchisees, with specialties in
    houseware and home textile, toys, leisure, and infant. This segment also
    includes properties owned through Blue Square Real Estate ("BSRE") which
    are used by the segment.
4.Real Estate – Through its subsidiary BSRE the Company is engaged in
    generating yield from commercial centers, logistics centers and offices,
    land for the purpose of capital appreciation and deriving long-term yield
    as well as in the development of the "Wholesale Market" residency project.
5.Others – AlonBlue Squarethrough its 100% subsidiary, Alon Cellular Ltd,
    operates an MVNO network in Israel and through Diners Club Israel Ltd., an
    associate held at 49%, which operates in the sector of issuance and
    clearance of YOU credit cards to the customer club members of the group.





ALON BLUE SQUARE ISRAEL LTD.
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)
Note 1 -
Segment
reporting
(continued)
             Three months ended March 31, 2013
             Fueling
             and                              Real                        Total
                        Supermarkets Non-Food Estate Others   Adjustments consolidated
             Commercial
             sites
             NIS in thousands
Net segment  1,337,450  1,627,625*  106,947  9,447  7,799    -           3,089,268
revenues
Inter
segment      7,011      -            6,864    -      -        (13,875)    -
revenues
Gross profit 190,036    406,856      53,031   9,447  (3,081)  303         656,592
(loss)
Depreciation
and          21,479     39,940       2,940    -      1,163    1,760       67,282
amortization
Operating
profit
(loss)
before
 other
gains and
losses net,

 share in
gains        36,563     (3,050)      7,445    4,730  (12,331) (8,372)     24,985
(losses) of


associates
and changes
in fair

 value of
investment
property
Segment      37,112     (8,135)      6,339    6,974  (6,821)  (11,588)    23,881
profit
Unallocated
corporate                                                                 (4,617)
expenses
Financial
expenses,                                                                 (53,850)
net
Loss before
taxes on                                                                  (34,586)
income
* Nine branches less
compared to 2012



               Three months ended March 31, 2012
               Fueling
               and                              Real                       Total
                          Supermarkets Non-Food Estate Others  Adjustments consolidated
               Commercial
               sites
               NIS in thousands
Net segment    1,387,566  1,626,018    87,567   7,167  -       -           3,108,318
revenues
Inter segment  8,677      -            12,127   -      -       (20,804)    -
revenues
Gross profit   184,165    436,576      46,253   7,167  -       -           674,161
Depreciation
and            21,266     41,947       2,652    -      -       1,537       67,402
amortization
Operating
profit (loss)
before

 other gains
andlosses
net,

 share in
gains (losses) 28,538     16,531       7,030    4,338  (3,681) (11,138)    41,618
of


associatesand
changes in
fair

 value of
investment
property
Segment profit 29,562     16,259       7,004    6,002  2,689   (13,905)    47,611
Unallocated
corporate                                                                  (6,842)
expenses
Financial                                                                  (39,583)
expenses, net
Income before
taxes on                                                                   1,186
income



ALON BLUE SQUARE ISRAEL LTD.
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)
Note 1 - Segment
reporting (continued)
                       Year ended December 31, 2012
                       Fueling
                       and                              Real                        Total
                                  Supermarkets Non-Food Estate Others   Adjustments consolidated
                       Commercial
                       sites
                       NIS in thousands
Net segment revenues   5,773,398  6,552,909    321,116  30,569 7,185    -           12,685,177
Inter segment revenues 41,197     -            29,458   -      -        (70,655)    -
Gross profit (loss)    796,994    1,788,614    148,348  30,569 (11,570) (499)       2,752,456
Depreciation and       87,808     167,464      11,438   -      2,099    9,705       287,514
amortization
Operating profit
(loss) before

 other gains and
losses net,

 share in gains
(losses) of            145,527    126,231      (12,072) 17,197 (33,628) (46,301)    196,954


associatesandchanges
in fair

 value of investment
property
Segment profit         149,534    137,036      (        99,302 (9,887)  (55,369)    305,166
                                               15,450)
Unallocated corporate                                                               (24,268)
expenses
Financial expenses,                                                                 (238,928)
net
Income before taxes on                                                              41,970
income





             Three months ended March 31, 2013
             Fueling
             and                              Real                       Total
                        Supermarkets Non-Food Estate Others  Adjustments consolidated
             Commercial
             sites
             U.S. dollars in thousands
Net segment  366,626    446,169      29,317   2,590  2,137   -           846,839
revenues
Inter
segment      1,922      -            1,882    -      -       (3,804)     -
revenues
Gross profit 52,903     111,529      14,537   2,590  (845)   83          179,987
(loss)
Depreciation
and          5,888      10,948       806      -      319     483         18,444
amortization
Operating
profit
(loss)
before

 other
gains
andlosses
net,

 share in  10,023     (836)        2,041    1,297  (3,381) (2,295)     6,849
gains
(losses) of


associates
andchanges
in fair

 value of
investment
property
Segment      10,173     (2,230)      1,738    1,912  (1,870) (3,177)     6,546
profit
Unallocated
corporate                                                                (1,266)
expenses
Financial
expenses,                                                                (14,762)
net
Loss before
taxes on                                                                 (9,482)
income



[1] Effective January 1, 2013, the Company applies IFRS 11 "Joint
Arrangements" (IFRS 11 or the Standard). IFRS 11 is to be applied
retrospectively in financial statements for annual periods such that
comparative figures are restated. According to the Standard, investments in
jointly controlled entities (Joint ventures) are no longer to be
consolidatedproportionally but rather the company's investments in these
ventures should be presented according to the equity method of accounting.
Investments in joint operations shall continue to be consolidated under the
proportionate consolidation method in the Company's consolidated financial
statements. The Company's share in gains (losses) of associates is presented
under operating income since associates are integrated into the operations of
the Company. For the effect of the adoption as of March 31, 2012 and December
31, 2012, and for the periods ending on those dates on the assets,
liabilities, equity, results and cash flows of the Company, see further
details in this report below.

[2] The Company operates in four reportable segments: Supermarkets, Fueling
and Commercial sites, Non Food retail and wholesale and Real Estate. Segmental
information is included in this report below.

[3] Use of financial measures that are not in accordance with Generally
Accepted Accounting Principles
Adjusted EBITDA is a measure that is not in accordance with Generally Accepted
Accounting Principles (Non-GAAP) and is defined as income before financial
income (expenses) net, other gains (losses) net, changes in fair value of
investment property, taxes,share in gains of associates, depreciation and
amortization in addition to share in adjusted EBITDA of equity accounted
investees. It is an accepted ratio in the retail industry. It is presented as
an additional performance measure, since it enables comparisons of operating
performances between periods and companies while neutralizing potential
differences resulting from changes in capital structures, taxes, age of
property and equipment and its related depreciation expenses. AdjustedEBITDA,
however, should not be related to as a single measure or as an alternative to
operating income, another performance indicator and to cash flow information,
which are prepared using Generally Accepted Accounting Principles (GAAP) as
indicators of profit or liquidity. Adjusted EBITDA does not take the costs of
servicing debt and other liabilities into account, including capital
expenditures and therefore it does not necessarily indicate the amounts that
may be available to the use of the company and in addition Adjusted EBITDA
should not be compared to other indicators with similar names reported by
other companies because of differences in the calculation of these indicators.
See the reconciliation between our net income and Adjusted EBITDA which is
presented in this press release.

[4] The adjustments include retrospective applications of IFRS 11 "Joint
Arrangements" (the Company's share in previously consolidated companies by the
proportionate method in the Company's consolidated financial statements and
their results are presented now under the Company's share in gains (losses) of
associates and are included in this report in segment results)

Contact:
Alon Blue Square-Israel Ltd.
Dror Moran, CFO
Toll-free telephone from U.S. and Canada: 888-572-4698
Telephone from rest of world: 972-3-928-2220
Fax: 972-3-928-2611
Email: cfo@bsi.co.il



SOURCE Alon Holdings Blue Square - Israel Ltd.
 
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