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Shikun & Binui Reports Third Quarter 2013 Results

              Shikun & Binui Reports Third Quarter 2013 Results

- Group's Backlog in Infrastructure and Construction segments totaled - NIS
10.4 billion

- Cash flows from Operating Activities totaled NIS 343 million compared with
NIS 129 million in Q3 of 2012

- Company Board of Directors declared a dividend of NIS 80 million

Ofer Kotler, CEO of Shikun & Binui commented on the results: "During the
quarter, we sold our stake in Highway 6 in a transaction that expressed the
Group's diverse capabilities and demonstrated its business strategy. Similar
successful sales will enable the group to expand its concession activities in
Israel and worldwide."

PR Newswire

AIRPORT CITY, Israel, Nov. 28, 2013

AIRPORT CITY, Israel, Nov. 28, 2013 /PRNewswire/ --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 of 2013.

Third quarter Highlights:

  oThe Group's backlog of infrastructure and construction projects totaled
    NIS 10.4 billion, of which NIS 8.1 billion ($2.3 billion) originated in
    the Group's activities outside of Israel. The backlog as of the end of
    September 2013 is expected to be realized during the next four years.
  oThe Group completed the sale of its stake in Trans-Israel Highway 6 for
    NIS 683 million – at a gain of NIS 63 million. The Group continues to
    hold a 35% stake in the Highway's operating companies. The paving and
    expansion of the highway, totaling NIS 470 million, will be carried out by
    Shikun & Binui Solel Boneh Infrastructures.
  oShikun & Binui Real Estate (87%) sold 321 residential units during the
    third quarter of the year, totaling NIS 385 million. In the first nine
    months of the year, S&B Real Estate sold 724 units totaling NIS 923
    million.
  oThe group successfully completed the process of extending the average
    duration of its public debt through the exchange of three existing series
    of bonds, and issuance of two new series. In total, the Group exchanged
    the stated value of NIS 892 million and the average duration was extended
    from 6.4 to 7.4 years. Midroog, the Israeli affiliate of Moody's rating
    agency, ratified the A1 rating with a stable outlook for all of the Groups
    bond series.
  oA concession agreement was signed between the State of Israel and Shikun &
    Binui and Abengoa Company to build the Ashalim Project – a BOT project for
    the construction of a thermo-solar power plant with a 110 megawatt
    capacity. Construction of the project is conditional on closing of the
    project financing. The concessionaire is currently in discussions
    regarding the financing of the project.
  oThe Group is actively seeking to expand its water activities, and acquired
    30% of the shares of Elcon Recycling Center which is subject to meeting
    milestones. Elcon is a privately held company engaged in the treatment of
    hazardous industrial waste. Elcon intends to expand its activities
    outside of Israel.
  oUpon approval of the financial statements for the third quarter of 2013,
    the Group's board of directors approved a dividend distribution totaling
    NIS 80 million to the Group's shareholders.

Revenues from work performed and sales totaled NIS 1.29 billion in the third
quarter, compared with NIS 1.37 billion in Q3 of 2012. Most of the decrease
was due to exchange rate differences which impacted the translation of the
dollar-denominated revenues of SBI into shekels. Also contributing to the
decrease in revenues was the low number of projects built by Shikun & Binui
Real Estate, which residents populated, compared with the same quarter of 2012
(73 vs. 97). The revenues of Solel Boneh Infrastructures and Construction
increased by 8%, owing mainly to the growth in the roadworks division.

Gross profit totaled NIS 211.0 million (16.4% of revenues), compared with NIS
242.0 million (17.7% of revenues) in Q3 of 2012. Most of the decrease was
driven by the decline in the gross profit of Shikun & Binui Real Estate, due
to the drop in the average price of a home in Israel, compared with the third
quarter of last year. Gross profit of SBI increased by 15% over Q3 of 2013,
reaching NIS 142 million.

Administrative and general expenses totaled NIS 84.0 million, compared with
NIS 80.0 million in the third quarter of last year.

The Group posted a capital gain in the quarter of NIS 71.4 million, of which
NIS 63.3 million was from the sale of Highway 6 (an affiliate).

Operating profit totaled NIS 189.0 million (14.7% of revenues), compared with
NIS 143.0 million (10.4% of revenues). The increase was due mainly to the
capital gain from the sale of Highway 6.

Net financing expenses totaled NIS 59.0 million, compared with NIS 43 million
in the first quarter of last year. The increase was impacted mainly by the
rise in the Consumer Price Index (1.29% in Q3, compared with 0.85% in the same
quarter last year).

Group's equity in losses of affiliates amounted to NIS 45.0 million, compared
with NIS 10.0 million in Q3 of last year. As a result of changes in the
tariffs, promised in Spain for electricity produced from solar energy, the
Group recognized impairment of NIS 35 million on its holdings in "Giltz" – a
subsidiary. The Group's management assesses that when the legislation is
completed in Spain, there could be significant changes in the amount of the
write-down.

Furthermore, losses of NIS 11.0 million were posted, related to the effect of
the change in the exchange rate of the euro on the financial statements of
Group companies engaged in income-producing real estate segment outside of
Israel.

Net Profit totaled NIS 59.0 million, compared with NIS 70.0 million in the
third quarter of last year.

The Group does not revalue its investment properties and they are presented in
the financial statements at historical cost.

Cash flows from operating activities totaled NIS 343.4 million, compared with
NIS 128.8 million in Q3 of 2012.

Equity as of the end of the quarter totaled NIS 1.18 billion.

Total assets in the balance sheet amounted to NIS 10.6 billion.

Tal Raz, Shikun & Binui Group CFO commented on the results: "The Group has
impressive financial strength, which enabled ratification of its credit rating
and extension of the average duration to maturity of its debt. We continue to
enjoy good access to the capital market and from the trust of investors – all
of which will facilitate expansion of the Group's operations and generate
value to our shareholders."

Condensed Results for the First Nine Months of 2013 (NIS millions)

                                    1-9/2013 1-9/2012
Revenues                            4,665    4,700
Gross profit                        832.8    927.0
Gross margin                        17.8%    19.7%
Administrative and general expenses (252.2)  (246.8)
Other operating income (expenses)   116.3    60.6
Operating profit                    681.4    650.9
Operating profit margin             14.6%    13.8%
Financing expenses (net)            (153.8)  (125.3)
Income taxes                        (143.6)  (135.4)
Net profit                          311.4    367.1



IR Contact
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

 

About Shikun & Binui
Shikun & Binui, a member of the Arison Group, is the leading infrastructure
and real estate company in Israel. The Group's subsidiaries have been
operating since 1924. The Group's companies have gained extensive experience
in complex construction and infrastructure projects in Israel and abroad.
Shikun&Binui Group has proven achievements in building, residential
neighborhoods, commercial and industrial buildings, as well as large-scale
transportation, infrastructure and ecological projects, water purification and
desalination and development of international projects. In addition,
Shikun&Binui also operates in the initiating, planning, construction and
operation of projects in renewable energy. Shikun&Binui is a leading,
multi-faceted and socially responsible international group that produces
balance between the business, social and environmental accomplishment. The
group places emphasis on honesty, transparency, innovation, and excellence.
The group has accepted upon itself a leadership role in creation of a
sustainable and progressive life environment.

The above noted in this release includes forward-looking statements based on
Company data, as well as Company plans and estimations based on this data. The
activity, results and other data may be substantially different in reality
given uncertainty and various risks, including those discussed under risk
factors in the Company's financial statements and Director's reports.





Shikun & Binui Ltd.
Condensed Consolidated Interim Statement of Financial Position as at
                                   September 30   September 30   December 31
                                   2013           2012           2012
                                   (Unaudited)                   (Audited)
                                   NIS thousands  NIS thousands  NIS thousands
Assets
Cash and cash equivalents          1,905,470      1,059,749      1,478,637
Bank deposits                      241,761        152,866        393,647
Short-term loans and investments   60,812         193,304        77,763
Short-term loans to investee       10,342         14,649         9,770
companies
Trade receivables – accrued        1,365,179      1,617,952      1,325,313
income
Inventory of buildings held for    1,686,972      1,645,078      1,739,430
sale
Receivables and debit balances     356,028        (*)300,515     (*)332,323
Other investments, including       12,381         2,797          32,524
derivatives
Current tax assets                 39,618         32,723         33,950
Inventory                          272,583        310,026        309,248
Total current assets               5,951,146      5,329,659      5,732,605
Receivables in respect of          759,293        601,616        (*)592,627
concession arrangements
Non-current inventory of land      431,417        438,828        449,650
(freehold)
Non-current inventory of land      312,640        386,932        351,485
(leasehold)
Investment property, net           585,736        373,179        397,154
Land rights                        15,580         16,246         15,850
Receivables, loans and deposits    596,292        (*)327,610    (*)351,663
Investments in equity-accounted    254,781        (*)479,638    487,395
investees
Loans to investee companies        519,580        949,052        953,487
Deferred tax assets                79,000         91,261         88,892
Property, plant and equipment,     996,656        1,109,224      1,033,513
net
Intangible assets, net             125,363        125,618        143,066
Total non-current assets           4,676,338      4,899,204      4,864,782
Total assets                       10,627,484     10,228,863     10,597,387
(*) Reclassified





Shikun & Binui Ltd.
Condensed Consolidated Interim Statement of Financial Position as at (cont'd)
                                   September 30   September 30   December 31
                                   2013           2012           2012
                                   (Unaudited)                   (Audited)
                                   NIS thousands  NIS thousands  NIS thousands
Liabilities
Short-term credit from banks and   664,580        1,100,548      1,192,471
others
Subcontractors and trade payables  1,046,214      (*)1,015,706   (*)892,761
Short-term employee benefits       124,917        (*)133,899     (*)145,348
Payables and credit balances       403,953        (*)405,887     (*)484,853
including derivatives
Current tax liabilities            68,310         96,890         75,697
Provisions                         385,865        379,187        (*)393,747
Payables - customer work orders    587,564        561,285        744,996
Advances received from customers   1,022,305      963,548        887,220
Dividend payable                   59,037         48,415         -
Total current liabilities          4,362,745      4,705,365      4,817,093
Liabilities to banks and others    1,877,404      1,874,121      1,636,252
Debentures                         2,904,310      2,189,960      2,698,171
Employee benefits                  78,482         (*)86,732      (*)82,142
Deferred tax liabilities           56,961         53,915         60,723
Provisions                         135,739        50,442         (*)126,230
Excess of accumulated losses over
cost of investment
and deferred credit balance in    28,880         38,460         37,489
investee companies
Total non-current liabilities      5,081,776      4,293,630      4,641,007
Total liabilities                  9,444,521      8,998,995      9,458,100
Equity
Total equity attributable to
owners
of the Company                    1,005,997      1,077,703      977,376
Non-controlling interests          176,966        152,165        161,911
Total equity                       1,182,963      1,229,868      1,139,287
Total liabilities and equity       10,627,484     10,228,863     10,597,387
(*) Reclassified





Shikun & Binui Ltd.
Condensed Consolidated Interim Statement of Income
                      For the nine-month    For the three-month   For the
                      period ended          period ended
                                                                  year ended
                      September  September  September  September  December 31
                      30         30         30         30
                      2013       2012       2013       2012       2012
                      (Unaudited)           (Unaudited)           (Audited)
                      NIS        NIS        NIS        NIS        NIS
                      thousands  thousands  thousands  thousands  thousands
Revenues from work
performed and sales  4,664,973  4,700,152  1,288,805  1,371,302  6,062,875
Cost of work
performed
and sales            3,832,162  3,773,106  1,077,777  1,128,733  (1)4,879,979
Gross profit          832,811    927,046    211,028    242,569    1,182,896
Gain on sale of
investment property  12,010     4,902      12,010     -          7,253
Selling and marketing (27,509)   (24,965)   (10,765)   (6,356)    (35,038)
expenses
Administrative and
general
expenses             (252,218)  (246,848)  (84,103)   (80,079)   (1)
                                                                  (338,856)
Other operating       154,227    16,152     72,390     763        16,393
income
Other operating       (37,942)   (25,415)   (11,755)   (14,329)   (46,175)
expenses
Operating profit      681,379    650,872    188,805    142,568    786,473
Financing income      143,119    160,579    54,085     62,918     201,101
Financing expenses    (296,902)  (285,897)  (113,133)  (106,089)  (1)
                                                                  (334,263)
Net financing         (153,783)  (125,318)  (59,048)   (43,171)   (133,162)
expenses
Share of losses of
equity
accounted investees  (72,602)   (23,036)   (44,786)   (9,806)    (34,063)
(net of tax)
Profit before taxes   454,994    502,518    84,971     89,591     619,248
on income
Taxes on income       (143,553)  (135,381)  (26,086)   (19,045)   (1)
                                                                  (171,338)
Profit for the period 311,441    367,137    58,885     70,546     447,910
Attributable to:
Owners of the Company 285,163    341,723    56,590     63,162     (1)412,255
Non-controlling       26,278     25,414     2,295      7,384      35,655
interests
                      311,441    367,137    58,885     70,546     447,910
Basic earnings per
share
(in NIS)             0.71       0.86       0.14       0.16       1.03
Diluted earnings per
share
(in NIS)             0.71       0.86       0.14       0.16       1.03
Number of shares used
in the
computation of basic
earnings
per share (in        400,758    397,986    401,271    398,033    398,063
thousands)
Number of shares used
in the
computation of
diluted
earnings per share
(in thousands)       401,290    398,390    401,700    398,343    398,471
(1) Retrospective application of amended IAS 19, Employee Benefits





Operating
Segments
              For the nine month period ended September 30, 2013
              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
              (Unaudited)
              NIS thousands
Total
external      2,157,517        1,137,519        1,023,877    9,968        98,797       206,921    29,924    450      -            4,664,973
revenues
Inter-segment -                282,381          57           -            -            -          174       -        (282,612)    -
revenues
Total         2,157,517        1,419,900        1,023,934    9,968        98,797       206,921    30,098    450      (282,612)    4,664,973
revenues
Segment
profit (loss)
before
income tax   340,760          52,248           253,925      (40,688)     29,036       (33,388)   (33,168)  2,829    (116,560)    454,994
              For the nine month period ended September 30, 2012
              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
              (Unaudited)
              NIS thousands
Total
external      2,477,084        1,118,130        870,344      12,124       106,077      87,573     28,820    -        -            4,700,152
revenues
Inter-segment -                232,868          57           -            -            -          -         -        (232,925)    -
revenues
Total         2,477,084        1,350,998        870,401      12,124       106,077      87,573     28,820    -        (232,925)    4,700,152
revenues
Segment
profit (loss)
before
income tax   380,082          43,134           272,006      (12,303)     41,729       (21,520)   (11,249)  (2,234)  (187,127)    502,518







Operating Segments (cont'd)
              For the three month period ended September 30, 2013
              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
              (Unaudited)
              NIS thousands
Total
external      656,208          393,295          183,540      2,957        17,161       24,180     11,014    450    -            1,288,805
revenues
Inter-segment -                74,771           38           -            -            -          -         -      (74,809)     -
revenues
Total         656,208          468,066          183,578      2,957        17,161       24,180     11,014    450    (74,809)     1,288,805
revenues
Segment
profit (loss)
before
income tax   122,626          15,015           24,265       (11,437)     5,491        (41,668)   (12,113)  (426)  (16,782)     84,971
              For the three month period ended September 30, 2012
              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
              (Unaudited)
              NIS thousands
Total
external      729,439          345,091          228,235      7,185        23,017       26,609     11,726    -      -            1,371,302
revenues
Inter-segment -                89,051           19           -            -            -          -         -      (89,070)     -
revenues
Total         729,439          434,142          228,254      7,185        23,017       26,609     11,726    -      (89,070)     1,371,302
revenues
Segment
profit (loss)
before
income tax   90,936           10,381           76,572       (17,663)     15,690       (8,396)    (3,536)   (841)  (73,552)     89,591





Operating Segments (cont'd)
              For the year ended December 31, 2012
              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
              (Audited)
              NIS thousands
Total
external      3,120,931        1,413,117        1,203,243    17,305       143,857      126,104    38,318    -        -             6,062,875
revenues
Inter-segment -                311,309          76           -            -            -          -         -        (311,385)     -
revenues
Total         3,120,931        1,724,426        1,203,319    17,305       143,857      126,104    38,318    -        (311,385)     6,062,875
revenues
Segment
profit (loss)
before
income tax   (*) 451,393      (*)49,755        (*)370,857   (29,773)     44,820       (35,018)   (16,740)  (2,521)  (*)(213,525)  619,248
(*) Reclassified







SOURCE Shikun & Binui Ltd.
 
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