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Israel's Shikun & Binui Posts First-Quarter Profit of $48 Million

Israel's Shikun & Binui Posts First-Quarter Profit of $48 Million

Warsaw-Poland-2.jpg Operating from headquarters in one of the tiniest countries in the Mideast for the past 24 years, Israel-based Shikun & Binui Ltd. (TASE: SKBN.TA) has posted a first-quarter profit of $48 million (NIS 166 million), or 36 percent higher than first quarter 2011.

(NIS stands for New Israeli Shekel.  One NIS equals 25 cents U.S. TASE is Tel Aviv Stock Exchange.)

Shikun & Binui is considered Israel's leading infrastructure and real estate company; It is a member of the Arison Group.

In a news release, the company states revenues from projects and sales grew by 28.5% compared with Q1 of 2011 to a total of NIS 1.7 billion

The company has cash and cash equivalents balances totaling NIS 1.1 billion  ($250 million U.S.) and an unutilized credit facility totaling NIS 490 million.

Total assets in the balance sheet amounted to NIS 9.9 billion ($2.55 billion U.S.)

Company directors announced a dividend of NIS 65 million - NIS 0.16 per share

"The Group continues to expand its activities in all of its growth engines despite the upheaval in the global economy and in the real estate market in Israel," says Ofer Kotler, CEO of Shikun & Binui  "The Group has the knowledge and abilities to enable further expansion of its activities and create value for shareholders."

However, one slow growth segment was the company's real estate development area.  Revenues of this segment decreased by 6.5% compared with Q1 of 2011 to NIS 281 million.  In the first quarter of last year, the company sold lots for private construction, but no sales of lots were recorded in the current quarter.

Gross profit totaled NIS 335 million (20% of revenues), growth of 3.8% compared with the first quarter of 2011 (24.3% of revenues).  Gross profit of the infrastructure and construction outside of Israel segment posted growth of 16%, reaching NIS 199 million.  In the first quarter, the effect of the dollar exchange rate was additional gross profit of NIS 10 million.

Operating income totaled NIS 263 million (15.4% of revenues), 8.7% higher than in the first quarter of last year (18.2% of revenues).  Operating income of the infrastructure and construction outside of Israel segment increased by 17.7%.

Net financing costs totaled NIS 34 million in the quarter, compared with NIS 39 million in the first quarter of last year.  Long-term financing costs totaled NIS 66 million, compared with NIS 77 million in Q1 of 2011.  The decrease was driven by the increase of 0.87% in the CPI, compared with no change in the same period of 2011.

Shikun & Binui RED acquired control (67%) of a company that owns companies operating in Poland, which had been accounted for previously by the equity method.  With the transfer of control, and as a result of the revaluation of the investment to fair value, the Group recognized a gain of NIS 12 million.

The Group is seeking new investments in Poland.

Revenues from projects and sales totaled NIS 1.7 billion, growth of 28.5% compared with the first quarter of last year.

The growth was driven by expansion of operations in the countries in which the company operates and the entry into a new country - Tanzania.

Revenues from the infrastructure and construction in Israel segment grew by 32.3% compared with the same quarter last year, reaching NIS 459 million.

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