Paz Oil Company Ltd. (TASE:PZOL), controlled by Zadik Bino, reported a surge in its profit in the second quarter and first half of 2015, caused by the steep drop in oil prices, which is boosting profits on oil refining.
The company's second quarter adjusted net profit totaled NIS 175 million, up 119%, compared with the corresponding quarter last year. Adjusted net profit for the first half of the year jumped 157% to NIS 342 million. Reported net profit zoomed from NIS 29 million in the second quarter of 2014 to NIS 243 million in the second quarter of 2015.
The company said, "The substantial increase in the second quarter resulted mainly from a dramatic improvement in the results in the refining sector and better results in the industrial and services division."
In addition, the company's operating profit leaded from NIS 135 million in the second quarter of last year to NIS 275 million in the second quarter of 2015. Paz CEO Yona Fogel said, "All of the group's spheres of activity - retail, industrial, and refining - are showing good performances in the quarter and the first half of the year. The refining sector's results are impressive, having been boosted by improvement in global refining profits; the drop in the prices of a barrel of oil, which cuts costs; efficient operation; and added value from the investments made. International economic companies forecast a continuation of low oil prices until at least the end of 2016, which is contributing to global economic growth, increased fuel consumption, and oil refining profits. In addition to improved profits in our divisions, we are focusing on expanding and developing the group's business, with an emphasis on improving customer service."
The company's second quarter revenue dipped 22% to NIS 3.5 billion, but the improvement in oil refining profit margins made a direct contribution to the profit line. Gross profit climbed 55% to NIS 521 million, and earnings before interest, taxes, depreciation, and amortization (EBITDA) soared 129% to NIS 334 million. The company posted NIS 67 million in financing revenue in the second quarter, compared with NIS 10 million in financing expenses in the corresponding quarter last year.
Published by Globes [online], Israel business news - www.globes-online.com - on August 23, 2015
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