Delek Motors, which imports Mazda and Ford cars, today published its third quarter results, showing a steep decline in car sales, especially Ford models. The company's net profit also slid, after having gained hundreds of millions of shekels last year from the revaluation and sale of shares in auto safety systems producer Mobileye(NYSE: MBLY), which held its IPO in the US.
Delek Motors' third quarter net profit was down nearly 80% to NIS 57 million, and declined 50% to NIS 343 million in the first nine months of the year. During the corresponding periods last year, Delek Motors benefited from NIS 244 million and NIS 527 million in financing revenue, respectively, mostly from Mobileye shares.
In current activity, Delek Motors' sales of cars were down 23% to 5,100 in the third quarter. Sales consisted mostly of Mazda cars, with the remainder being Ford and BMW models. The company's market share fell from 11% to 8%. Most of the sales lost in the quarter were from the Ford brand, sales of which plummeted nearly 70% to less than 650, compared with over 2,000 Ford cars sold in the corresponding quarter last year.
The precipitous drop in sales of Ford cars puts its sales behind those of BMW, which exceeded 700, 10% more than in the third quarter of 2014. Sales of Mazda cars also fell 5.5% to 3,700 cars. Delek Motors' car sales dropped 19% to 18,746 in the first nine months of 2015, and 74% of its sales were Mazda cars, which remained constant at 13,900. Ford car sales also plunged 70% to 2,163 in the first nine months of the year, also fewer than BMW sales, which surged 48% to 2,675. Delek Motors' market share fell from 12% to 9% in January-September 2015.
The decline in sales and market share is particularly prominent, given the prosperity in the Israel auto market, which is breaking sales records. In January-September, activity in this market rose 6% to 203,560 cars. In its reports, Delek Motors commented briefly on the Ford brand results, explaining that the fall "resulted from that fact that vehicles during this period were sold mainly from the existing inventory, which was quite limited." The report added, "In the coming weeks, investments in cars of the new Ford Focus, Edge, and Explorer brands are planned."
The negative trend in vehicle sales is reflected in the top row, with third quarter sales declining 14.5% to NIS 776 million and January-September sales down 11% to NIS 2.7 billion. On the other hand, Delek Motors' quarterly gross profit was up 4% to NIS 167 million, and the ratio of gross profit to sales also rose - a trend attributable to a change in the composition of the cars sold. In the first nine months of the year, gross profit dipped 2% to NIS 558 million. Together with its reports, Delek Motors announced the distribution of a NIS 65 million dividend to its shareholders. The Delek Motors share price has climbed 20% since the beginning of the year, reflected a NIS 3.4 billion market cap.
Published by Globes [online], Israel business news - www.globes-online.com - on November 19, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015