Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, has reported a 13-fold increase in its net profit on higher revenue for the second quarter of 2013, mostly from the sale of shares in Delek US Holdings Inc. (NYSE:DK) and a revaluation of the remaining stake in the company.
Revenue rose 11% to NIS 9.62 billion for the second quarter from NIS 8.66 billion for the corresponding quarter of 2012, mainly due to insurance and financial activity in Israel through The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) and oil and gas exploration activity through Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L).
Net profit rose to NIS 505 million for the second quarter from NIS 40 million for the corresponding quarter, mostly due to capital gains from sales of shares in Delek US. During the second quarter, Delek Group sold 3.6% of Delek US, and recorded a net capital gain of NIS 467 million from the net revaluation of the investment balance following effective loss of control.
Since August 2012, Delek Group has sold over half its stake in Delek US for NIS 2.65 billion, and Delek Group no longer consolidates Delek US's results in financial statements.
Oil and gas revenue rose to NIS 538 million in the first half of 2013 from NIS 348 million in the corresponding half, mainly from the initial recognition of revenue from natural gas and condensate sales to Tamar project customers. Oil and gas profits, however, fell to NIS 5 million in the first half from NIS 23 million in the corresponding half, due to a NIS 26 million revaluation of warrants to purchase shares granted to senior officers, which were recorded in the first half of 2012.
Delek Group CEO Asi Bartfeld said, “We are very pleased that we have finally started to realize the potential and began to recognize the revenues from the Tamar project. We also saw income from the sale of Mari B storage asset. This is an important milestone in the history of the company which demonstrates that gas exploration, development and production is becoming the core of our strategy. We have been taking additional steps to focus on our core competencies of exploration and production, demonstrated by reducing our holdings in some of our other activities."
Published by Globes [online], Israel business news - www.globes-online.com - on August 28, 2013
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