Delek Group Ltd. (TASE: DLEKG) subsidiary Delek Israel Fuel Corporation Ltd. (TASE: DLKIS) has published its financial report for the second quarter of 2007, its first since it floated on the Tel Aviv Stock Exchange (TASE) a month ago. Delek Israel posted a gross profit of NIS 152 million, 2.7% higher than in the corresponding quarter of 2006. The increase resulted principally from improved margins, due to an improvement in trading terms with suppliers, especially importers.
Operating profit totaled NIS 51 million, 46% higher than in the corresponding quarter, as a result of operating efficiency measures and lowers provisions for doubtful debts. Excluding a provision for an options package to Delek Israel's CEO, operating profit totaled NIS 57 million.
Delek Israel posted a net profit of NIS 39.6 million, up 65% on the NIS 24 million in the corresponding quarter of 2006. Earnings before Interest, Taxation, Depreciation and Amortization (EBITDA) totaled NIS 70 million, 46% higher than in the corresponding quarter.
Total sales fell 1% to NIS 1.2 billion, as a result of lower fuel prices compared with the corresponding quarter. Revenue from fueling and commercial activity totaled NIS 630 million, 3.5% down on the corresponding quarter.
Delek Israel CEO Eyal Lapidot today announced that the company would develop retail compounds adjacent to its gas stations. The company will also establish mini-gas stations and acquire ownership of gas stations that it currently rents. The company has already established retail compounds in Kiryat Ata, Hod Hasharon, Hadera, Afikim, Kiryat Malakhi, Nir David, Lod, and Tiberias.
Lapidot said, “Retail is one of the company’s four growth engines. Convenience stores will generate the bulk of profits at gas stations. Thousands of people visit gas stations and spend a maximum of a few dozen shekels at Menta convenience stores. The gas stations have potential for building 500-3,000 sq.m. of retail space, which can include dozens of stores. 60% of customers also buy fuel at the gas stations, and I’m sure that most of the purchases will be made there because of the availability. Customers will come regularly, and no special parking will be necessary.”
Published by Globes [online], Israel business news - www.globes.co.il - on August 26, 2007
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