Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, reported a 2,400% increase in net profit to NIS 625 million in 2016, compared with NIS 25 million in 2015. The main contributions to the group's profit were profits from oil and gas exploration in Israel and the sale of its holdings in the Karish and Tanin natural gas reservoirs.
The group announced the distribution of a NIS 200 million dividend, after having distributed nearly NIS 1 billion in 2015-2016.
Delek Group CEO Asi Bartfeld said, "Delek is reporting an excellent year and quarter. In 2017, we will continue consolidating the group's international presence, while considering structural changes for the sake of implementing the group's strategy of focusing on its energy activity and becoming a key player in global markets."
Delek Group reported a 9% increase in its revenue from oil and gas exploration and production, which helped boost its net profit in this category to NIS 413 million, thanks to sales of gas from the Tamar reservoir.
Last December, Delek Group completed the sale of its holdings in the Karish and Tanin licenses in the framework of the natural gas plan, which allows the group to continue holding the Leviathan reservoir, while it will have to sell its holdings in the Tamar reservoir at a later date. As part of this, the group recognized a NIS 253 million profit on the sale of Karish and Tanin in the fourth quarter of 2016.
Quarterly profit leaps 600%
Delek Group made it clear that the group plans to sell its holdings in the IDE desalinization company, of which it owns 50%, with Israel Chemicals (TASE: ICL: NYSE: ICL) owning the other 50%. Delek Group has signed an agreement for the sale of its controlling share in The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) to Chinese corporation Yango Investment. The period of exclusivity for the agreement between Delek Group and Yango will expire tomorrow, so that starting tomorrow, "Both parties to the agreement have the right to announce its cancellation."
Delek also sold US company Republic Group in 2016, posting a NIS 16 million profit on the deal. The group also received early repayment of a loan it granted when it sold Delek Europe, giving it a first quarter profit of NIS 116 million. Its total fourth quarter profit soared nearly 600% to NIS 375 million.
Delek Group's portfolio of financial investments in the shares of foreign energy companies was worth NIS 600 million, as of the end of 2016. This figure is bound to change, however, because the group sold the majority of its stakes in Woodside and Noble Energy, on which it posted a NIS 60 million profit in 2016.
Published by Globes [online], Israel Business News - www.globes-online.com - on March 30, 2017
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