North Sea contributes over half Delek Group's 2018 profit

Yitzhak Tshuva Photo: Tamar Matsafi
Yitzhak Tshuva Photo: Tamar Matsafi

Delek Group posted a net profit of NIS 517 million for 2018, 57% less than in 2017.

Delek Group Ltd.'s (TASE: DLEKG) North Sea exploration and oil production activity, through Ithaca Energy, contributed a profit of NIS 238 million in 2018, 14 times the profit on this activity in 2017, according to Delek Group's financials released this morning.

Delek Group's fuels activity in Israel contributed a profit of NIS 70 million, 30% less than in 2017, following accounting write-downs in the fourth quarter.

Gas production in Israel, from the Tamar reservoir, yielded a NIS 437 million profit in 2018, 20% more than in 2017. Delek Group's holding in vehicle importer Delek Automotive Systems yielded a profit of just NIS 9 million, compared with NIS 63 million in 2017.

In total, Delek Group, controlled by Yitzhak Tshuva, posted a net profit of NIS 517 million for 2018, 57% less than for 2017, when the group benefitted from large capital gains on the sale of 9.25% of the rights in the Tamar reservoir to Tamar Petroleum. Group revenue was NIS 8.1 billion, representing growth of 19% over 2017.

In the fourth quarter of 2018, revenue grew 6% in comparison with the fourth quarter of 2017 to NIS 2 billion. Revenue from gas production in Israel grew 12% to NIS 351 million, while revenue from the fuels and convenience stores business in Israel grew 17% to NIS 13 billion, while Ithaca Energy's revenue fell NIS 262 million.

Ithaca Energy's contribution to net profit in the fourth quarter was NIS 174 million, which compares with a loss of NIS 78 million in the fourth quarter of 2017, while the contribution from the Tamar reservoir was NIS 108 million, up 31% on the fourth quarter of 2017. One-time expenses led to a loss of NIS 23 million on the fuels activity in Israel.

Delek Group posted a net loss of NIS 219 million for the quarter, among other things because of a provision of NIS 147 million for the diminution in value of the group's stake 22.5% in Delek Automotive Systems.

Delek Group declared a dividend of NIS 140 million. In the past year, the group's share price has risen 15%, giving it a market cap of NIS 7.6 billion.

Delek Group CEO Asaf Bartfeld said, "In 2018 we continued implementing the group's strategy. We completed the sale on non-core businesses. We delisted Delek Energy and turned it into a privately-held company wholly owned by the group, thus streamlining the structure of its holdings. We continued development of and investment in the energy business and in developing oil and gas assets in the Mediterranean, the North Sea, and the Gulf of Mexico. The signing of the agreement to sell Phoenix is an important and significant step for the group, and I believe that the deal will receive of the necessary approvals and will be completed in the course of 2019."

Published by Globes, Israel business news - - on March 31, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Yitzhak Tshuva Photo: Tamar Matsafi
Yitzhak Tshuva Photo: Tamar Matsafi
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