Natural gas sales from the Tamar field boosted the operating profit of Delek Group Ltd. (TASE: DLEKG) for the third quarter of 2013 by 30%, but revenue fell, and a non-recurring tax expense slashed the net profit by a fifth.
Revenue fell 3% to NIS 9.64 billion for the third quarter from NIS 9.94 billion for the corresponding quarter. Operating profit rose to NIS 555 million from NIS 428 million, but the net profit fell to NIS 70 million from NIS 93 million. Delek Group paid a NIS 100 million non-recurring tax expense for the companies tax hike.
The Tamar and Yam Tethys gas fields produced 2.1 billion cubic meters (BCM) of gas in the third quarter, and 4.5 BCM in January-September. Tamar also sold 84,000 barrels of condensate in the third quarter.
"Delek Group continues its strategy of increasing our focus on the upstream part of our business while at the same time successfully reducing the group's leverage. We are very pleased with the production performance of Tamar, our natural gas discovery (together with our partners) off the coast of Israel that started producing earlier this year. Our focus is now on advancing the Leviathan project, as quickly as possible," said Delek Group CEO Asi Bartfeld.
"The Supreme Court decision to reject the appeal filed against the decision of the government of Israel with regard to the natural gas export policy, paved the way for promoting the export potential of natural gas from the reservoirs which are held by Delek Group and its gas partnerships. Consequently, the gas partnerships, together with their partners, are exploring export options to various countries in the region through pipeline, LNG facilities and/or FLNG. In addition, the partners of the Leviathan project continue their negotiations with Woodside Petroleum Ltd. (ASX: WPL) over potential participation in the Leviathan project. Looking forward, we intend to continue to focus on energy and develop our activities in this area which will be a major and important accelerator of growth over the coming years."
Published by Globes [online], Israel business news - www.globes-online.com - on November 28, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013
Delek Group's net profit rose 157% to NIS 625 million in January-September from NIS 243 million in the corresponding period of last year. Net profit from gas exploration was NIS 46 million in January-September, compared with a net loss of NIS 6 million in the corresponding period, due to the recognition of revenue from the Tamar project and profits from leasing oil and gas assets following the entry into force of the agreement granting rights to use the facilities at Yam Tethys.
The net profit contribution from Delek's insurance and financial subsidiaries rose to NIS 316 million in January-September NIS 61 million from the corresponding quarter. However, the contribution from Delek Group Ltd. (TASE: DLEKG) was halved to NIS 411 million from NIS 842 million, due to lower crack spreads, and the contribution from Delek Europe NV fell to NIS 46 million from NIS 68 million, due to reduced fuel sales, but the contribution from Delek Israel Fuel Company Ltd. rose to NIS 36 million from NIS 24 million.
Published by Globes [online], Israel business news - www.globes-online.com - on November 28, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013