Israel Electric Corporation (IEC) (TASE: ELEC.B22) posted a loss of NIS 936 million in 2013, compared with a NIS 1 billion loss in 2012. The utility's financial report for 2013, published on Monday evening, shows that the losses and worrying erosion in equity continued, despite the offshore Tamar natural gas field's hook-up to the coast, which was supposed to reduce IEC's fuel expense by NIS 10 billion. A month ago, "Globes" reported that IEC's annual loss was expected to exceed NIS 500 million.
"IEC is going through an especially challenging period," said IEC CEO Eli Glickman. "There was a NIS 6.8 billion improvement in cash flow from operations in 2013, mainly due to the consumption of natural gas, which the company resumed using in April 2013, compared with 2012, when the company consumed expensive fuels because of the gas crisis in Egypt. The substantial improvement in cash flow from operations and the strengthening of the shekel helped the company reduce its net financial debt by NIS 1.5 billion in 2013."
IEC's revenue fell 2.5% to NIS 27.6 billion in 2013 from NIS 28.3 billion in 2012. Electricity tariffs have risen 30% since 2011.
IEC had 13,188 employees in 2013, up from 13,067 employees in 2012. There were 9,850 tenured employees. IEC's total salary cost was almost NIS 3 billion in 2013. Glickman earned NIS 1.2 million and chairman Yiftach Ron-Tal earned a similar amount. SVP strategic resources Dr. Adrian Bianu and SVP Dr. David Elmakais each earned NIS 1.1 million, and deputy CEO Yakov Hain earned NIS 1.06 million. IEC's five highest paid executives earned almost NIS 6 million last year.
Electricity consumption fell 6% to 53.5 billion kilowatt/hours in 2013 from 57 billion kilowatt/hours in 2012. IEC's financing expenses fell to NIS 2.17 billion in 2013 from NIS 2.69 billion in 2012, a reduction of NIS 521 million.
IEC's equity fell to NIS 14.8 billion at the end of 2013 from NIS 15.4 billion a year earlier. Its net financial debt was NIS 50.45 billion at the end of 2013, NIS 1.5 billion less than a year earlier. Cash flow from operations rose to NIS 5.77 billion in 2013 from NIS 1.05 billion in 2012.
Published by Globes [online], Israel business news - www.globes-online.com - on March 25, 2014
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