Shikun & Binui Presents Full Year 2013 Financial Results

           Shikun & Binui Presents Full Year 2013 Financial Results

PR Newswire

AIRPORT CITY, Israel, March 25, 2014

AIRPORT CITY, Israel, March 25, 2014 /PRNewswire/ -- Shikun & Binui Ltd.
(TASE: SKBN.TA), a global construction and infrastructure Company operating
within and outside Israel, reported its financial results for the full year of
2013.

Ofer Kotler, Chief Executive Officer commented, "Today, we have completed
another positive year in terms of our operational and financial performance.
The sale of our holdings in the Derech Eretz Project represents our
entrepreneurial spirit. We are working to leverage our know-how and
experience amassed over decades, in order to expand into new territories. We
successfully took several important financial actions during the year, which
combined with our financial strength, will enable us to continue to execute on
our expansion strategy."

Tal Raz, Chief Financial Officer, commented on the financial results, "This
year we completed several important financial steps, including the successful
issuance of debentures Series 6 and 7, as well as the exchange of some of the
short duration debenture into longer duration debentures. The upgrading of
the credit ratings by Ma'alot and Midroog, the Israeli arms of international
rating agencies Moody's and S&P, is a further testimony to the Group's
financial strength. The cash and cash equivalents balance of NIS 2.2 billion
as at the end of 2013, and the strong cash flow we have generated, will enable
us to operate in a financial optimal way in the coming years while expanding
our operations in Israel and globally."

2013  Highlights

  oSale of "Derech Eretz": In July 2013, the Company closed the sale of its
    investments in Derech Eretz for NIS 683 million (approximately $196
    million) – generating a capital gain of NIS 63 million (approximately $18
    million). This sale reflects the Company's business strategy in the
    concessions segment of financing, construction and operation of BOT
    projects, while utilizing the operational know-how, experience and project
    finance capabilities, until subsequently – their sale at a profit. With
    the closing of this sale, the agreement for the NIS 470 million
    (approximately $135 million) paving project to be performed by "Solel
    Boneh" takes effect.
  oWinning the Shagamu – Ibadan Tender in Nigeria: In June 2013, SBI was
    awarded the tender to build the Shagamu – Ibadan Highway in Nigeria. The
    duration of the project is expected to be 4 years with estimated proceeds
    of $580 million.
  oWinning the Ashalim Tender: In June 2013, the Company announced that it
    had been awarded a BOT tender (in equal stakes with the Spanish company,
    Abengoa) to build a thermo-solar power plant with a 110 megawatt capacity
    near Ashalim in Israel. The project will include financing, construction
    and operation for 25 years, following a 3-year construction period. The
    project cost is estimated at $1.1 billion.
  oStenham acquisition: A transaction closed in October 2013, in which A.D.O
    (a subsidiary of the Company) acquired shares of Stenham, the owner of 48
    rental properties in Berlin, Germany, as well as additional properties, in
    consideration for cash and an allotment of shares in A.D.O. Following the
    closing of this acquisition The Company recognized a capital gain of NIS
    23 million (approximately $6.6 million) as a results of these
    transactions.
  oResidential units sold: In 2013, the Company sold 1,121 residential units,
    compared with 918 units in 2012. In 2013, the Company handed over 913
    residential units (807 units was the Company's share), compared with 901
    residential units in 2012 (628 units was the Company's share).
  oKey financial activities: In September 2013, the Company issued debentures
    Series 6 and 7 totaling NIS 412 million, net. In November 2013, the
    Company exchanged NIS 900 million par value of debentures Series 2, 3 and
    4, with a short average duration to maturity, for debentures Series 6 and
    7 with a longer average duration to maturity.
  oUpgrade: In August 2013, the Company announced that Midroog, the Israeli
    affiliate of Moody's rating agency, upgraded the Company's debentures to
    A1 with a stable outlook. In January 2014, the Company announced that
    Ma'alot, the Israeli affiliate of S&P, upgraded the Company's debentures
    from A to A+ with a stable outlook.
  oCash Balance: As of December 31, 2013, the Company had cash and cash
    equivalents balances of NIS 1.8 billion.
  oRecord order backlog in the infrastructure segment: As of December 31,
    2013 order backlog totaled NIS 10.4 billion, of which NIS 7.5 billion was
    from activities outside of Israel.
  oDividend: On March 23, 2014, the Company's board of directors declared a
    dividend of NIS 60 million.

Summary of the Results

Group revenues from project work performed and sales totaled NIS 6,370 million
in 2013, compared with NIS 6,063 million in 2012, representing 5% growth.

Gross profit in 2013 totaled NIS 1,095 million, compared with NIS 1,183
million in 2012. Most of the decrease was due to the decline in the gross
profit of the real estate in Israel and real estate outside of Israel
segments, as will be detailed below.

Group operating profit for the year totaled NIS 840.5 million, compared with
NIS 786.4 million in 2012.

Net financing expenses in 2013 totaled NIS 163 million, compared with NIS 133
million in 2012. The increase was driven mainly by the rise in the Consumer
Price Index in 2013 of 1.9%, compared with 1.44% in 2012, which impacted
long-term credit costs. The increase in the amount of credit (issuance of
Series 6 and 7 debentures) and the receipt of bank loans also contributed to
an increase of NIS 15 million in financing expenses.

Net profit totaled NIS 393 million, compared with NIS 448 million in 2012, a
decrease driven by the factors discussed previously.

The Company reported positive cash flows from operating activities totaling
NIS 719 million, compared with NIS 558 million last year, due mainly to the
increase in the volume of collections, compared with last year.

Cash and cash equivalents balance as of December 31, 2012 totaled NIS 1.8
billion.

Segment Analysis

Revenues from the infrastructure and construction outside of Israel segment
were NIS 2,880 in 2013, a decrease of NIS 241 million (7.7%) from NIS 3,121
million in 2012. The decrease was due mainly to the 6% decrease in the
average dollar exchange rate in 2013 (a total effect of NIS 187 million) and
from the slowdown in projects in Ghana and Guatemala, the halt in work in the
Republic of Benin and the lower volume of work performed in an Azerbaijan
project. In contrast, there was revenue growth in the activities in Nigeria.
Gross profit in the infrastructure and construction outside of Israel segment
totaled NIS 602 million, compared with NIS 599 million in 2012. The gross
margin increased from 19% to 21%, driven mainly by the projects in Uganda and
Tanzania. Contrarily, the Company posted a loss in the project in the Benin
Republic. Pre-tax profit in the infrastructures and construction outside of
Israel segment in 2013 amounted to NIS 471 million (16.3% of sales), compared
with NIS 451 million (14.4% of sales) in 2012. The company reported a 5.6%
growth in order backlog in this segment to NIS 7.5 billion as of 2013-end.

In the infrastructure contracting in Israel segment, revenues totaled NIS
1,991 million in 2013 compared with NIS 1,725 million in 2012, a 15.4% growth,
driven mainly by the increase in the volume of work performed in the road
works and concrete plants division. Gross profit increased from NIS 105
million in 2012 to NIS 112 million in 2013, a growth of 6.7%. Operating
profit grew from NIS 29 million to NIS 50 million, and the margin increased
from 1.6% to 2.5%. Pre-tax income in the infrastructure constructing in
Israel segment totaled NIS 66.4 million (3.3% of the segment's revenues),
compared with NIS 49.7 million (2.9% of segment's revenues) in 2012.

Revenues of the real estate development in Israel segment total NIS 1,462
million, compared with NIS 1,203 million in 2012, an increase of 21.5%, driven
mainly by the
NIS 111 million increase in revenues from sales of non-residential projects,
an increase of NIS 87 million in revenue from work performed on the student
dormitories in Tel Aviv and a contribution of NIS 71 million in revenues from
the sale of residential units. In 2013, the Company handed over 807 units,
compared with 628 residential units in 2012. It should be noted that revenues
are recognized when units are handed over to the customer (and not when the
sales contract is signed).

Gross profit in this segment totaled NIS 343 million, compared with NIS 478
million in 2012. The decrease is due to the change in the mix of the units
that were populated, compared with 2012. In 2012, the residential units
populated were mainly located in exclusive areas and on historical-cost
accounted plots of land, recorded at low cost, thereby generating relatively
high gross margins for the Company. It should be noted that the Company has
an extensive inventory of historical-cost accounted plots of land that are not
re-valued, and are recorded on the Company's books at their historical cost.
During the period, the Company reported a gain of NIS 55 million, derived from
insurance on a sales agreement signed with the Ramat Gan Municipality. The
pre-tax profit of this segment amounted to NIS 307.5 million, compared with
NIS 370.8 million in 2012. The decrease was driven mainly by the different
mix of residential units between the periods, as noted.

In the real estate development outside of Israel segment, revenues totaled NIS
14 million in 2013, compared with NIS 17 million in 2012. This segment's
operating loss increased from NIS 19 million in 2012 to NIS 49 million in
2013. This NIS 30 million increase was due mainly to a NIS 27 million
provision for a reduction in the value of land in Hungary.

In the renewable energy segment, revenues totaled NIS 231 million, compared
with
NIS 126 million in 2012. The increase was driven mainly by the construction
of photovoltaic installations on land and roofs. Gross profit in this segment
totaled NIS 50 million in 2013, compared with NIS 18 million in 2012. The
increase was driven by the growth in the volume of activity. Pre-tax loss in
this segment totaled NIS 40 million, due mainly to the write-down of NIS 35
million, due to the effect of the change in regulation in Spain on the
subsidiary ("Giltz").

Revenues in the water segment totaled NIS 39 million in 2013, compared with
NIS 38 million in 2012. The segment's loss in 2013 was NIS 37 million,
compared with a loss of NIS 17 million in 2012, due mainly to the impairment
provision on the concession to operate, maintain and develop the Pardess Hana
– Carcour Water Corporation.

In the concessions segment, revenues in 2013 totaled NIS 106 million, compared
with NIS 144 million in 2012 – the decrease is due mainly to the end of the
construction period of a BOT project for overhauling roads in the North of
Israel and a transition to the operating period of the project. Pre-tax
profit in this segment amounted to NIS 20.7 million, compared with NIS 44.8
million in 2012. The decrease was due mainly to the financing income
attributed to this segment of NIS 36.4 million in 2013, compared with NIS 82.6
million in 2012 – driven by the sale of the Group's holdings in Derech Eretz.

Key Financial Results for Year 2013

NIS millions                        Year Ended December 31 Difference % change
                                    2013        2012
Revenues                            6,370       6,063      307        5%
Profit for the period               393         448        (55)       -12%
Equity                              1,146       1,139      7          0.6%
Total assets                        10,523      10,597     (74)       -
Working capital                     1,402       916        486        53%
Cash flow from operating activities 719         558        161        29%
Orders backlog                      10,417      9,692      725        7%



Key Financial Results for Fourth Quarter of 2013

NIS millions                        Year Ended December 31 Difference % change
                                    2013        2012
Revenues                            1,705       1,363      342        25%
Profit for the period               82          81         1          -
Cash flows from operating           360         536        (176)      -32%
activities



Conference Call

The Company will host a conference today starting at 12pm Eastern Time or 6pm
Israel time. Ofer Kotler, Chief Executive Officer and Tal Raz, Chief Financial
Officer, will host the call and will be available to answer questions after
presenting the results.

To participate, please call one of the following teleconferencing numbers.
US: 1-888-668-9141
UK: 0-800-917-5108
Israel: 03-918-0609
International: +972-3-918-0609

A presentation to accompany the conference call will be available from Shikun
& Binui's website at
http://en.shikunbinui.co.il/files/investores/250314/SB_Q4_2013.pdf under the
investor relations section.

IR Contacts
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.

This press release has been prepared by Shikun & Binui Ltd. (the "Company") as
a general press release of the Company and its financial results. The
information included in the press release and any other information conveyed
orally by the Company or on its behalf (all such information as aforesaid or
any part thereof - the "Information") is provided for convenience purposes
only. The Information does not constitute a basis for investment decision or
replace the need for carrying out independent collection of information and
analysis of the Information, nor does the Information purport to make or give
any recommendation and/or opinion and/or to substitute for the independent
judgment of any potential investor. Each potential investor is urged to
consult with its own advisors.

This press release does not constitute an offer or invitation to sell or
issue, or any solicitation of an offer to subscribe for or acquire any of the
Company's securities or to participate in any investment in the Company.

The Company does not warrant the completeness or accuracy of the Information,
and it disclaims any responsibility for any damages and/or losses whatsoever
resulting from the use of the Information. You must make your own
investigation and assessment of the matters contained herein. In particular,
no representation or warranty is given, and the Company has no responsibility,
as to the achievement or reasonableness of any forecasts, estimates, or
statements as to prospects.

In case of contradiction or inconsistency between the Information and
information recorded in the Company's ledgers and/or appearing in official
publications, such recorded information will prevail.

Statements in this press release that are not historical facts (including
statements containing "believes," "anticipates," "plans," "expects," "may,"
"will," "would," "intends," "estimates" and similar expressions) are
forward-looking statements within the meaning of the US Private Securities
Litigation Reform Act of 1995. These statements are not guarantees of future
performance, are based on current expectations of future events and are
subject to risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statement s , including the
risk factors referred to and discussed in the Company's financial statements
and Management Discussion and Analysis published by the Company. If one or
more of these factors materialize, or if any underlying assumptions prove
incorrect, our actual results, performance or achievements may vary materially
from any future results, performance or achievements expressed or implied by
these forward-looking statements. You should not place undue reliance on
forward-looking statements as a prediction of actual results. All
forward-looking statements included in this press release are made only as of
the date of this presentation.

The Company assumes no obligation to update any written or oral
forward-looking statement made by us or on our behalf as a result of new
information, future events or other factors. The Company assumes no obligation
to update any written or oral forward-looking statement made by it or on its
behalf or any other part of the Information as a result of new information,
future events or other factors.

The information included in this press release relating to third parties
(excluding the company) is based on information, documents and/or data
delivered to the Company from third parties and this information may be
subject to non-disclosure obligations, and is included in this press release
subject to such obligations. The company is not responsible to the readiness,
accuracy and/or completeness of this information.

This press release is supplied to you for your own information and may not be
distributed, published, reproduced or otherwise made available to any other
person, in whole or in part, for any purpose. In particular, this press
release should not be distributed to or otherwise made available to persons
where such distribution or availability may lead to a breach of any law or
regulatory requirements.





Shikun & Binui Ltd.
Consolidated Statements of Financial Position as at
                                                   December 31   December 31
                                                   2013          2012
                                              Note NIS thousands NIS thousands
Assets
Cash and cash equivalents                     4    1,781,369     1,478,637
Bank deposits                                 5    413,526       393,647
Short-term loans and investments              6    47,106        77,763
Short-term loans to investee companies        18   17,507        9,770
Trade receivables – accrued income            7    1,202,928     1,325,313
Inventory of buildings held for sale          8    1,600,924     1,739,430
Receivables and debit balances                9    326,352       (*) 332,323
Other investments, including derivatives      10   27,679        32,524
Current tax assets                            29H  33,202        33,950
Inventory                                     12   272,865       309,248
                                                   10,854        -
Total current assets                               5,734,312     5,732,605
Receivables in respect of concession          13   801,204       (*) 592,627
arrangements
Non-current inventory of land (freehold)      14   430,913       449,650
Non-current inventory of land (leasehold)     14   269,226       351,485
Investment property, net                      15   637,226       397,154
Land rights                                   16   15,836        15,850
Receivables, loans and deposits               17   637,421       (*) 351,663
Investments in equity-accounted investees     18   286,641       487,395
Loans to investee companies                   18   473,653       953,487
Deferred tax assets                           29E  92,256        88,892
Property, plant and equipment, net            19   1,013,904     1,033,513
Intangible assets, net                        20   130,314       143,066
Total non-current assets                           4,788,594     4,864,782
Total assets                                       10,522,906    10,597,387
(*) Reclassified



Shikun & Binui Ltd.
Consolidated Statements of Financial Position as at (cont'd)
                                                   December 31   December 31
                                                   2013          2012
                                              Note NIS thousands NIS thousands
Liabilities
Short-term credit from banks and others       21   741,008       1,192,471
Subcontractors and trade payables             22   984,568       (*) 892,761
Short-term employee benefits                  23   138,093       (*) 145,348
Payables and credit balances including        24   399,475       (*) 484,853
derivatives
Current tax liabilities                       29H  88,768        75,697
Provisions                                    30   455,274       (*) 393,747
Payables - customer work orders               25   545,538       744,996
Advances received from customers              8    900,435       887,220
Dividend payable                                   78,718        -
Total current liabilities                          4,331,877     4,817,093
Liabilities to banks and others               26   1,621,573     1,636,252
Debentures                                    27   3,103,117     2,698,171
Employee benefits                             28   73,209        (*) 82,142
Deferred tax liabilities                      29E  56,821        60,723
Provisions                                    30   159,941       (*) 126,230
Excess of accumulated losses over cost of
investment
and deferred credit balance in investee      18   30,279        37,489
companies
Total non-current liabilities                      5,044,940     4,641,007
Total liabilities                                  9,376,817     9,458,100
Equity
Total equity attributable to owners           37   964,208       977,376
Non-controlling interests                          181,881       161,911
Total equity                                       1,146,089     1,139,287
Total liabilities and equity                       10,522,906    10,597,387
(*) Reclassified



Shikun & Binui Ltd.
Consolidated Statements of Income for the Year Ended
                                    December 31   December 31   December 31
                                    2013          2012          2011
                               Note NIS thousands NIS thousands NIS thousands
Revenues from work performed   32A  6,369,793     6,062,875     5,335,126
and sales
Cost of work performed and     32B  5,274,537     (1) 4,880,017 (*) 4,293,777
sales
Gross profit                        1,095,256     1,182,858     1,041,349
Gain on sale of investment          12,144        7,253         50,819
property
Selling and marketing expenses 32C  (39,996)      (35,038)      (33,542)
Administrative and general     32D  (349,177)     (1) (338,857) (1) (342,365)
expenses
Other operating income         32F  177,241       16,393        88,604
Other operating expenses       32F  (54,954)      (46,175)      (7,195)
Operating profit                    840,514       786,474       797,670
Financing income               32E  199,779       201,101       179,588
Financing expenses             32E  (362,638)     (1) (334,261) (1) (346,403)
Net financing expenses              (162,859)     (133,160)     (166,815)
Share of losses of equity
accounted investees (net of        (86,002)      (34,063)      (44,593)
tax)
Profit before taxes on income       591,653       619,211       586,262
Taxes on income                29A  (198,227)     (1) (171,347) (1) (144,001)
Profit for the period               393,426       447,864       442,261
Attributable to:
Owners of the Company               363,144       (1) (412,209) (1)410,708
Non-controlling interests           30,277        35,655        31,553
                                    393,426       447,864       442,261
Basic earnings per share (in   37I  0.91          1.03          1.33
NIS)
Diluted earnings per share (in 37I  0.90          1.03          1.32
NIS)
(1) Retrospective application of amended IAS 19, Employee Benefits



Operating Segments
              For the year ended December 31, 2013
              Infrastructures
              and             Infrastructures             Real estate
              construction    and             Real estate development
              outside of      construction    development outside of              Renewable                               Unallocated
              Israel          in Israel       in Israel   Israel      Concessions energy    Water    Other    Adjustments amounts     Consolidated
              (Unaudited)
              NIS thousands
Total
external      2,880,323       1,636,476       1,462,060   13,614      106,280     231,420   38,728   892      -           -           6,369,793
revenues
Inter-segment -               354,234         76          -           -           -         174      -        (354,484)   -           -
revenues
Total         2,880,323       1,990,710       1,462,136   13,614      106,280     231,420   38,902   892      (354,484)   -           6,369,793
revenues
Segment
profit (loss)
before
income tax   448,347         49,714          370,629     (29,773)    44,820      (35,018)  (16,740) (2,521)  74,133      (287,696)   615,895
              For the year ended December 31, 2012
              Infrastructures
              and             Infrastructures             Real estate
              construction    and             Real estate development
              outside of      construction    development outside of              Renewable                               Unallocated
              Israel          in Israel       in Israel   Israel      Concessions energy    Water    Other    Adjustments amounts     Consolidated
              (Unaudited)
              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   (1) 451,393     (1) 49,756      (1) 370,857 (29,773)    44,820      (35,018)  (16,740) (2,521)  74,133      (287,696)   619,211
              For the year ended December 31, 2011
              Infrastructures
              and             Infrastructures             Real estate
              construction    and             Real estate development
              outside of      construction    development outside of              Renewable                               Unallocated
              Israel          in Israel       in Israel   Israel      Concessions energy    Water    Other    Adjustments amounts     Consolidated
              (Unaudited)
              NIS thousands
Total
external      2,726,917       1,238,429       935,907     4,858       277,361     112,947   38,707   -        -           -           5,335,126
revenues
Inter-segment -               376,161         3,834       -           -           -         -        -        (379,995)   -           -
revenues
Total         2,726,917       1,614,590       939,741     4,858       277,361     112,947   38,707   -        (379,995)   -           5,335,126
revenues
Segment
profit (loss)
before
income tax   (1) 440,913     (1) 48,410      (1) 303,009 314         78,017      (29,719)  (12,233) (10,308) 34,333      (266,474)   586,262
(1) Retrospective application of amended IAS 19, Employee Benefits



SOURCE Shikun & Binui Ltd.

Website: http://en.shikunbinui.co.il
Website: http://en.shikunbinui.co.il
 
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