Shikun & Binui Reports Results of the First Half of 2019 With NIS 486 Million in Net Profit
AIRPORT CITY, Israel, Aug. 21, 2019 /PRNewswire/ -- Shikun & Binui Ltd. (TASE: SKBN.TA), a global construction and infrastructure company headquartered in Israel, today reported its financial results for the second quarter and first half, ended June 30, 2019.
FINANCIAL HIGHLIGHTS OF THE FIRST HALF OF 2019
-- Revenues in the first half of 2019 amounted to NIS 3.1 billion, an
increase of 13.3% compared to the corresponding half last year. The
increase was mainly due to real estate activity in Eastern Europe.
-- Gross margin was approximately 14.9% compared to 11.9% in the same
period last year. Gross profit for the period was NIS 463 million,
compared with NIS 325 million in the same period last year. The
improvement in the gross profit and the margins was due to the
improvements in the operations in Africa, alongside significant
apartment deliveries within the residential real estate operations in
Eastern Europe.
-- Net profit amounted to approximately NIS 486 million, compared with NIS
203 million in the same period last year.
-- Cash flow from operations in the first half (excluding investment in
land) amounted to NIS 509 million, compared with negative operating cash
flow of NIS 505 million in the corresponding half last year. The
positive cash flow is primarily due to an increase in the volume of
collections at SBI and collections received at the real estate segment
in Israel.
REAL ESTATE ACTIVITIES
In the first half of 2019, housing sales totaled 1,089 housing units (in 100% terms), amounting to NIS 1.2 billion, of which 709 housing units were in Israel and 380 housing units were in Europe
Apartment deliveries were 1,013 (in 100% terms), of which 421 were housing units in Israel and 592 were housing units in Europe.
Additional Data on Company's Sale of Apartments (signed contracts) during First Half of 2019:
Apartments under
Consolidated
Projects Under
Company management Projects - Joint Control
including partner share
Effective Portion
Israel
---
Sales 1,014 926
(NIS millions)
---
Number of apartment sale contracts 709 673
signed
---
Average price of apartments sold 1,430 1,376
(NIS thousands)
---
Europe
---
Sales 203 133 26
(NIS millions)
---
Number of apartment sale contracts 380 286 27
signed
---
Average price of apartments sold 534 465 959
(NIS thousands)
---
Data Regarding Delivery of Apartments to Customers during First Half of 2019:
Consolidated
Projects Under
Projects Joint Control
Europe
---
Revenues from apartments delivered (NIS millions) 232 29
---
Number of units delivered 427 37
---
Average price of apartments delivered (NIS thousands) 544 786
---
Israel Real Estate: Significant increase in the volume of transactions signed during the first half of the Or Yam project
-- During the first half of the year, transactions for the sale of 709
housing units were signed, amounting to NIS 1 billion, following the
success of the Or Yam project.
RED International Real Estate: Significant Increase in Income and Profit Following delivery of 592 Housing during the first half of the year
-- Revenues in the first half amounted to NIS 298 million, an increase of
NIS 223 million compared to the corresponding half last year, as a
result of delivery of 592 housing units mainly in Warsaw (351 housing
units), Belgrade (113 housing units), Prague and Bucharest (128 units).
-- Gross profit in the first half amounted to NIS 80 million, compared with
NIS 9 million in the corresponding half last year.
Successful realization of most of the Group's shares in ADO
The company completed four transactions to sell 30% of ADO Group shares for approximately NIS 720 million, following which it recorded a pre-tax profit of NIS 480 million, as well as pre-tax profit from revaluation of the remaining balance of the Company's investment in ADO Group (7.5%) amounting to approximately NIS 59 million.
PROJECT CONTRACTING
Solel Boneh: Significant volume of wins for new projects since the beginning of the year
-- Total rights in projects and new works received from the beginning of
the year up to the date of the current report, amounted to NIS 2.2
billion. These include winning the road construction project and
extending bridges as part of the construction of the Eastern Railway,
construction of two other sections of the Southern Barrier, construction
of the Bezalel Campus in Jerusalem, foundation works in the Tel Aviv
Spiral Tower and others.
SBI International Infrastructure and Construction (excluding US): Significant improvement in profitability
-- A marked improvement in the gross margin was noted, which reached 17.9%
in the first half of 2019, compared with 9.6% in the first half of last
year. The improvement in profitability was mainly due to projects in
Nigeria, projects in Uganda as well as the project to establish the
airport in Uganda. Net profit amounted to approximately NIS 38 million,
compared with net loss of NIS (73) million in the same period last year.
-- Toll Road Project in Colombia: On February 1, 2019, the Section 1
delivery document was signed with no penalty. With the receipt of the
section by the customer, the operating period commenced as stipulated in
the franchise agreement, under which the franchisee will begin to
receive revenue from available payments and fees, in accordance with the
agreement. Due to the delays in the schedule in the agreement, the
financers decided to suspend the continued financing until the handovers
of sections 2 and 3, and reached agreement on the continuing of work on
sections 4 and 5 (in which the works were delayed due to a force
majeure). However, the franchisee and the financiers are in discussions
regarding the receipt of a waiver and arranging for continued financing
to establish sections 4 and 5. Given the above, an appropriate provision
has been made and included in the financial statements.
SBA US Infrastructure and Construction Contracting: Continued to broaden operations and implement US expansion strategy
-- Completion of the acquisition of US Infrastructure and Construction
Contracting Company: On April 16, 2019, the transaction was completed as
part of the Company's strategy to expand its operations in the United
States. The company is engaged in civil infrastructure contracting with
an emphasis on bridges, transport infrastructure and marine works.
-- Project SH-288: There was a delay within the project for building the
toll road in Texas. Consequently, the update to the expected completion
of the project resulted in a loss of NIS 53 million in the first half of
2019.
PROJECTS AND INCOME GENERATING ASSETS
In April, all approvals were required to operate the Ashalim project
The project totals the supply of 121 megawatts of electricity, for an operating period ending in 2043.
Road 6 Operating Company (Derech Eretz) Transaction
In May, Keystone REIT Ltd. entered into an agreement for the acquisition of the Road 6 Operating Company (Derech Eretz) from third parties with some of the holdings expected to be transferred to the Shikun & Binui.
As the transactions and agreements are executed, the Company is expected to increase its control of the Road 6 Operating Company and record an estimated profit of NIS 100 million as a result of the investment revaluation.
Genari 2 Transaction
In June, the sale of the Genari 2 project was completed, a BOT project with a construction cost of NIS 515 million for the planning, construction, maintenance and financing of the new Jerusalem Government Campus. Net proceeds from the transaction amounted to NIS 79 million and a profit after tax of NIS 34 million.
Continued takes steps to reduces financial leverage
The Company's financial debt as at June 30, 2019 was NIS 8.0 billion, compared with NIS 8.4 billion as of December 31, 2018.
Net financial debt, excluding non-recourse loans, was NIS 3.5 billion at the end of June, compared with NIS 4.0 billion at the end of 2018.
Streamlining
Management continued implementing steps to reduce expenses across the Group.
On May 26, 2019, following the approval of the Compensation Committee and the Board of Directors of the Company, the Company approved the engagement of Mr. Lapidot's terms and employment as the Company's CEO. Mr. Lapidot began his term on June 2, 2019.
INVESTORS CONFERENCE CALL
Shikun & Binui will host a conference call in English for investors on August 21, 2019 starting at 10:30am Eastern Time to discuss the financial results. Management will also be available to answer investor's questions, after presenting the results.
To participate, please call one of the following teleconferencing numbers:
US: 1-888-407-2553
UK: 0-800-917-9141
Israel: 03-918-0650
International: +972-3-918-0650
At: 10:30am Eastern Time, 7:30am Pacific Time, 3:30pm UK Time, 5:30pm Israel Time
For those unable to participate, the teleconference will be available for replay on the company's website at http://en.shikunbinui.co.il/ beginning 24 hours after the call.
ABOUT THE SHIKUN & BINUI GROUP
Shikun & Binui is Israel's leading infrastructure and real estate company - a global corporation that operates through its subsidiaries in Israel and across the world. Active in more than 20 countries on four continents, Shikun & Binui is involved in various fields, including infrastructure, real estate development, water, energy, and concessions.
SAFE HARBOR STATEMENT
This summary announcement was prepared solely for the convenience of the reader and does not replace Shikun & Binui Ltd.'s (hereafter - "the Company") full report. The information contained in this announcement is, by its nature, incomplete. All of its contents are provided as a supplement to the Company's report, and are subject to the declarations therein stated. This announcement includes forecasts, assessments, estimates and other information relating to the Company or its subsidiaries, or to other parties or to future events and matters, the extent of whose realization is not certain and is not under the sole control of the Company (forward-looking information, as defined in the Securities Law-1968). The key facts and data serving as the basis for this information are facts and data, among others, related to the current status of the Company and its businesses, facts and data relating to the current status of the operating segments in which the Company engages in its areas of operation, and other macroeconomic facts and data known to the Company on the preparation date of this presentation.
It is understood that forward-looking information does not constitute a fact and is based solely on subjective assessments. Forward-looking information is uncertain and for the most part, is not under the Company's control. The realization or non-realization of the forward-looking information will be influenced, among others, by the risk factors that characterize the Company's operations, as well as developments in the general environment and external factors that impact the Company's operations. The Company's future results and achievements could differ significantly from those presented in this presentation. The Company is not obligated to update or modify the said forecast or assessment, and is not obligated to update this announcement. This announcement does not constitute an offer to purchase the Company's securities or an invitation to receive such offers. An investment in securities in general, and in the Company in particular, carries risk. One must take into account that past data do not necessarily indicate future performance.
Condensed Consolidated Interim Statements of Financial Position as at
June 30
June 30
December 31
2019 2018 2018
(Unaudited)
(Audited)
NIS
thousands NIS
thousands NIS
thousands
Assets
Cash and cash equivalents 2,420,067 2,461,346 2,491,867
Bank deposits 774,132 531,743 781,879
Short-term loans and investments 173,071 91,303 129,150
Short-term loans to investee companies 13,663 5,035 25,001
Trade receivables - accrued income 3,008,727 2,716,667 2,830,251
Inventory of buildings held for sale 1,681,839 1,630,602 1,587,147
Receivables and debit balances 417,505 525,504 497,394
Other investments, including derivatives 476,843 271,163 376,642
Current tax assets 50,085 19,218 39,287
Inventory 162,324 190,428 160,518
Assets classified as held for sale 737,371 716,062
Total current assets 9,178,256 9,180,380 9,635,198
Receivables and contract assets
in respect of concession arrangements 1,219,536 654,451 1,065,753
Non-current inventory of land (freehold) 989,352 1,129,682 938,127
Non-current inventory of land (leasehold) 489,286 463,335 705,172
Investment property, net 984,425 747,556 862,282
Land rights 13,431 13,420 13,422
Receivables, loans and deposits 235,836 456,205 211,766
Investments in equity-accounted investees 498,136 587,529 403,773
Loans to investee companies 1,154,886 448,805 1,099,937
Deferred tax assets 155,491 155,025 299,144
Property, plant and equipment, and right-of-use assets 1,426,263 996,848 1,076,317
Intangible assets, net 442,933 283,966 364,911
Total non-current assets 7,609,575 5,936,822 7,040,604
Total assets 16,787,831 15,117,202 16,675,802
Condensed Consolidated Interim Statements of Financial Position as at (cont'd)
June 30
June 30
December 31
2019 2018 2018
(Unaudited)
(Audited)
NIS
thousands NIS
thousands NIS
thousands
Liabilities
Short-term credit from banks and others 1,517,719 1,691,406 1,529,542
Subcontractors and trade payables 1,678,399 1,389,517 1,657,591
Short-term employee benefits 174,101 136,050 160,792
Payables and credit balances including derivatives 544,548 580,206 638,652
Current tax liabilities 93,364 72,683 84,623
Provisions 177,026 253,368 172,364
Payables - customer work orders 1,565,590 1,285,345 1,483,675
Advances received from customers 508,153 421,194 323,684
Liabilities classified as held for sale 371,301 360,954
Dividend payable 60,000
Total current liabilities 6,318,900 6,201,070 6,411,877
Liabilities to banks and others 3,354,157 2,456,022 3,200,074
Debentures 3,455,895 3,659,246 3,680,283
Employee benefits 44,795 49,329 46,130
Deferred tax liabilities 109,451 82,285 119,665
Provisions 172,164 237,047 260,418
Excess of accumulated losses over cost of investment
and deferred credit balance in investee companies 165,241 59,701 97,408
Total non-current liabilities 7,301,703 6,543,630 7,403,978
Total liabilities 13,620,603 12,744,700 13,815,855
Equity
Total equity attributable to owners of the Company 2,826,012 2,096,257 2,531,765
Non-controlling interests 341,216 276,245 328,182
Total equity 3,167,228 2,372,502 2,859,947
Total liabilities and equity 16,787,831 15,117,202 16,675,802
Condensed Consolidated Interim Statements of Income (Loss)
For the six-month period ended For the three-month period ended
For the
year ended
June 30
June 30
June 30
June 30
December 31
2019 2018 2019 2018 2018
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
NIS thousands
NIS thousands
NIS thousands
NIS thousands
NIS thousands
Revenues from work
performed and sales 3,101,915 2,738,400 1,614,795 1,382,982 6,331,518
Cost of work performed
and sales (2,638,878) (2,413,633) (1,387,756) (1,214,205) (5,371,928)
Gross profit 463,037 324,767 227,039 168,777 959,590
Gain on sale of
investment property 1,608 26,219 1,918 23,248 125,949
Selling and marketing expenses (21,576) (18,735) (9,050) (8,531) (40,089)
Administrative and general
expenses (241,925)
(205,040) (*) (149,534)
(107,457) (*) (415,472)
Share of profits (losses)
of equity accounted
investees (net of tax) (65,924) 19,145 (29,046) 20,121 19,141
Other operating income 721,163 339,934 106,832 333,450 389,504
Other operating expenses (8,610)
(58,778) (*) (3,838)
(47,316) (*) (135,578)
Operating profit 847,773 427,512 144,321 382,292 903,045
Financing income 234,332 146,586 110,446 45,977 261,136
Financing expenses (362,336) (276,598) (237,616) (182,118) (530,652)
Net financing expenses (128,004) (130,012) (127,170) (136,141) (269,516)
Profit before taxes
on income 719,769 297,500 17,151 246,151 633,529
Taxes on income (234,037) (94,766) (50,155) (70,649) (74,233)
Profit (loss) for the period 485,732 202,734 (33,004) 175,502 559,296
Attributable to:
Owners of the Company 464,802 186,287 (43,898) 169,188 494,995
Non-controlling interests 20,930 16,447 10,894 6,314 64,301
485,732 202,734 (33,004) 175,502 559,296
Basic earnings per
share (in
NIS) 1.16 0.47 (0.11) 0.42 1.24
Diluted earnings per
share (in
NIS) 1.15 0.46 (0.11) 0.42 1.22
(*) Reclassified.
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
For the
For the three-month period
ended
year ended
March 31
March 31
December 31
2019 2018 2018
(Unaudited)
(Audited)
NIS
thousands NIS
thousands NIS
thousands
Profit for the period 518,736 27,232 559,296
Other comprehensive income (loss)
Other comprehensive income (loss) items that
after initial recognition in comprehensive
income were or will be transferred to
profit or loss
Foreign currency translation differences
for foreign operations (107,330) 63,607 227,416
Effective portion of change in
fair value of hedge of foreign operation 5,240 (1,880) (11,240)
Net change in fair value of financial assets at fair value
through other comprehensive income, net of tax 18,885 (17,721) 13,398
Effective portion of change in
fair value of cash flow hedge 14,496 9,511 17,447
Other comprehensive loss items that will
not be transferred to profit loss
Re-measurement of defined benefit plan, net of tax 141
Total other comprehensive income (loss) (68,709) 53,517 247,162
Total comprehensive income for the period 450,027 80,749 806,458
Total comprehensive income attributable to:
Owners of the Company 439,507 70,652 736,807
Non-controlling interests 10,520 10,097 69,651
Total comprehensive income for the period 450,027 80,749 806,458
Operating Segments
For the six month period ended June 30, 2019 (unaudited)
Infrastructures
and
Infrastructures
construction
Infrastructures
and
(international)
and
Real estate
Real estate
construction
(excluding
construction
development
development
(Israel)
USA)
(USA)
(Israel) (
international
)
Concessions Energy Other
Adjustments
Consolidated
---
NIS thousands
Total external revenues 1,322,412 675,183 329,670 469,052 298,305 30,939 105,801 22,310 (151,757) 3,101,915
Inter-segment revenues 205,789 38 (205,827) -
Total revenues 1,528,201 675,183 329,670 469,090 298,305 30,939 105,801 22,310 (357,584) 3,101,915
Segment profit (loss) before
income tax 63,435 101,480 (79,616) 64,554 64,614 140,527 844 523,838 (159,907) 719,769
For the six month period ended June 30, 2018 (unaudited)
Infrastructures
and
Infrastructures
construction
Infrastructures
and
(international)
and
Real estate
Real estate
construction
(excluding
construction
development
development
(Israel)
USA)
(USA)
(Israel) (
international
)
Concessions Energy Other
Adjustments
Consolidated
NIS thousands
---
Total external revenues 1,429,711 643,520 241,805 476,424 74,816 22,336 88,625 20,702 (259,539) 2,738,400
Inter-segment revenues 129,784 38 (129,822)
Total revenues 1,559,495 643,520 241,805 476,462 74,816 22,336 88,625 20,702 (389,361) 2,738,400
Segment profit (loss) before
income tax 52,693 (56,973) 23,827 101,582 (18,444) 346,922 (9,747) (16,673) (125,687) 297,500
Operating Segments (cont'd)
For the three month period ended June 30, 2019 (unaudited)
---
Infrastructures
and
Infrastructures
construction
Infrastructures
and
(international)
and
Real estate
Real estate
construction
(excluding
construction
development
development
(Israel)
USA)
(USA)
(Israel) (
international
)
Concessions Energy Other
Adjustments
Consolidated
NIS thousands
---
Total external revenues 662,688 353,299 250,968 224,054 153,220 16,971 33,779 10,305 (90,489) 1,614,795
Inter-segment revenues 108,102 19 (108,121)
Total revenues 770,790 353,299 250,968 224,073 153,220 16,971 33,779 10,305 (198,610) 1,614,795
Segment profit (loss) before
income tax 40,561 41,839 (46,754) 18,306 38,375 103,323 (14,233) (55,918) (108,348) 17,151
For the three month period ended June 30, 2018 (unaudited)
Infrastructures
and
Infrastructures
construction
Infrastructures
and
(international)
and
Real estate
Real estate
construction
(excluding
construction
development
development
(Israel)
USA)
(USA)
(Israel) (
international
)
Concessions Energy Other
Adjustments
Consolidated
NIS thousands
---
Total external revenues 763,198 321,362 135,462 202,426 56,540 11,572 28,160 11,441 (147,179) 1,382,982
Inter-segment revenues 57,274 19 (57,293)
Total revenues 820,472 321,362 135,462 202,445 56,540 11,572 28,160 11,441 (204,472) 1,382,982
Segment profit (loss) before
income tax 24,196 (68,780) 9,034 41,786 (9,289) 323,256 1,103 (8,909) (66,246) 246,151
Operating Segments (cont'd)
For the year ended December 31, 2018 (audited)
---
Infrastructures
and
Infrastructures
construction
Infrastructures
and
(international)
and
Real estate
Real estate
construction
(excluding
construction
development
development
(Israel)
USA)
(USA)
(Israel) (
international
)
Concessions Energy Other
Adjustments
Consolidated
NIS thousands
---
Total external revenues 1,355,063 2,850,687 485,278 987,301 499,354 55,910 503,563 45,184 (450,822) 6,331,518
Inter-segment revenues 433,445 76 (433,521)
Total revenues 1,355,063 3,284,132 485,278 987,377 499,354 55,910 503,563 45,184 (884,343) 6,331,518
Segment profit (loss) before
income tax (41,379) 87,165 15,252 315,133 88,431 380,333 40,061 (30,711) (220,756) 633,529
CONTACTS
Shikun & Binui
Investor Relations
Leon Vasilnitzky
Ehud Helft
+972 (3) 630 5894
GK Investor & Public Relations
leon_v@shikunbinui.com
+1 617 418 3096
---
shikunbinuni@gkir.com
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SOURCE Shikun & Binui Ltd.
