Noble Energy to procure services from Israel Shipyards

Israel Shipyards has signed an agreement to provide logistical services to US oil and gas company Noble Energy for NIS 29 million a year, not including special tasks. The agreement is for 34 months with extension options totaling up to three years.

The information comes from Gold Bond Group Ltd. (TASE:GOLD), controlled by Shlomo Fogel and the Schmeltzer family. Gold Bond holds 25% of Israel Shipyards' shares. In its 2016 financial statements, Israel Shipyards said that it was in negotiations for signing a new agreement with Noble Energy.

Israel Shipyards' previous service agreement with Noble Energy ended in May 2015, and Israel Shipyards resumed its work with Noble Energy on a limited scale in the second half of 2016, "following the approval of Israel's gas plan." Noble Energy is a partner in the Tamar and Leviathan natural gas reservoirs, and operates them.

Gold Bond's partners in Israel Shipyards are chairman Samy Katsav and Sko-Car (a private company owned by Fogel and the Schmeltzer family). They signed an agreement last April to acquire the 19% stake owned by Clal Industries, controlled by billionaire Len Blavatnik, for NIS 140 million, reflecting a company value of NIS 700 million for Israel Shipyards.

Israel Shipyards' primary business is the planning, construction, maintenance, and providing of services for vessels, mainly naval, but also civilian (the marine sector). Israel Shipyards also loads and unloads cargo and provides port services (port sector), and began cement production in 2016. The company, which has 450 employees, also provides logistical services to oil and gas exploration companies, "especially in potential marine strata." In its annual reports, Israel Shipyards reported a renewed upswing in its business in this sector, "following the approval of the gas plan by Israel."

Israel Shipyards had a tough year in 2016, following a substantial decline in its core business of constructing ships and providing services for them (the marine sector). The company's revenue dipped 2% to NIS 505 million, while its profit plummeted 40% to NIS 28 million. An analysis of the company's results shows that most of the downturn was in the marine sector, where revenue plunged 50% to NIS 215 million and gross profit was off 30%.

In its report, Israel Shipyards wrote that its revenue and gross profit from construction of military vessels accounted for over 90% of its total in the marine sector. The company's orders backlog in the marine sector was NIS 782 million as of the end of 2016, and the company expected to post NIS 550 million of this amount as income in 2017.

Published by Globes [online], Israel Business News - www.globes-online.com - on July 19, 2017