The company’s two-year contract with the Palestinian Authority to supply fuel to the West Bank, beginning in 2007, has come into effect.
As of today, Paz Oil Company Ltd. (TASE:PZOL) has a market cap of $940 million, slightly less than the market cap at the company’s IPO. Investors who bought the company’s stock and warrants package at the IPO have lost 2% of their investment, and investors who bought shares on the first trading day have lost almost 7%. Paz’s business includes gas stations, the Yellow convenience stores, Pazgaz Ltd. and Oil Refineries Ashdod.
Paz today announced that its two-year contract with the Palestinian Authority (PA) to supply fuel to the West Bank, beginning in 2007, has come into effect. Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) will continue to supply fuel to the Gaza Strip, in contrast to the original contract.
Paz estimates that fuel sales to the PA will amount to 13% of its consolidated revenue, including Oil Refineries Ashdod. This amounts to a total of NIS 1.7 billion a year. The company also estimates that its profit margin from its contract with the PA will be less than its profit margin from direct sales to other customers, because of the large quantities of fuel that the PA will buy.
Published by Globes [online], Israel business news - www.globes.co.il - on December 25, 2006
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