Procurement News Notice |
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| PNN | 4414 |
| Work Detail | Shikun & Binui Ltd. (TASE:SKBN.TA), a global construction and infrastructure company headquartered in Israel, today reported its financial results for the first half and second quarter ended June 30, 2016. Business highlights: Concessions: Financial Closing of Project SH-288 in Texas: On April 29, 2016, the Company completed fundraising for the SH-288 project to build an express lane in Houston, Texas. The Company holds 21.62% of the project's Concessionaire and 50% of its General Contractor. On May 9, 2016, the Financial Closing was completed and the first tranche of capital was drawn. The total value of the project (100%) is expected to reach approximately USD 1 billion. Financial Closing of Colombia Toll Roads Project: On May 25, 2016, Financial Closing was achieved for a project to finance, build, upgrade and maintain toll roads in Colombia. As of the reporting date, the total value of the project is USD 640 million and the Company holds 100% of its Concessionaire and Building Contractor. Sale of the Operating Company of the Hadera Desalination Plant: On March 31, 2016, the Company completed the sale of its holdings in the operating company of the Hadera Desalination Plant, for NIS 78 million. The Company recorded net income of NIS 87 million in respect of the deal. Sale of Part of the Company's Holdings in the Gilboa Pumped Storage Project: On March 29, 2016, the Company signed an agreement to sell 49% of its holdings in the Developer of the Gilboa Pumped Storage project. Upon completion of the deal (which is contingent upon the fulfillment of certain conditions), the Company expects NIS 92 million for its share and to record NIS 20 million in net profit. Financial Closing of Project SH-288 in Texas: On April 29, 2016, the Company completed fundraising for the SH-288 project to build an express lane in Houston, Texas. The Company holds 21.62% of the project's Concessionaire and 50% of its General Contractor. On May 9, 2016, the Financial Closing was completed and the first tranche of capital was drawn. The total value of the project (100%) is expected to reach approximately USD 1 billion. Financial Closing of Colombia Toll Roads Project: On May 25, 2016, Financial Closing was achieved for a project to finance, build, upgrade and maintain toll roads in Colombia. As of the reporting date, the total value of the project is USD 640 million and the Company holds 100% of its Concessionaire and Building Contractor. Sale of the Operating Company of the Hadera Desalination Plant: On March 31, 2016, the Company completed the sale of its holdings in the operating company of the Hadera Desalination Plant, for NIS 78 million. The Company recorded net income of NIS 87 million in respect of the deal. Sale of Part of the Company's Holdings in the Gilboa Pumped Storage Project: On March 29, 2016, the Company signed an agreement to sell 49% of its holdings in the Developer of the Gilboa Pumped Storage project. Upon completion of the deal (which is contingent upon the fulfillment of certain conditions), the Company expects NIS 92 million for its share and to record NIS 20 million in net profit. SBI–Shikun & Binui International Infrastructure Contracting: Backlog: As of June 30, 2016, SBI's project backlog totaled NIS 9 billion. Nigeria: During the reporting period, the Nigerian government approved its 2016 budget and its Office of Public Works paid most of the USD 90 million debt (Naira 24 million) which was owed to SBI. After receipt of this payment, the Company renewed work on most of its Nigerian civil projects. On June 20, 2016, the Central Bank of Nigeria cancelled the fixed naira-dollar exchange rate, resulting in significant exchange rate volatility and a devaluation of the naira exchange rate from approximately 200 naira per dollar to approximately 280 naira per dollar (as of June 30, 2016). The effect on SBI's financial results resulted in its posting a net loss of USD 18 million for the second quarter. Backlog: As of June 30, 2016, SBI's project backlog totaled NIS 9 billion. Nigeria: During the reporting period, the Nigerian government approved its 2016 budget and its Office of Public Works paid most of the USD 90 million debt (Naira 24 million) which was owed to SBI. After receipt of this payment, the Company renewed work on most of its Nigerian civil projects. On June 20, 2016, the Central Bank of Nigeria cancelled the fixed naira-dollar exchange rate, resulting in significant exchange rate volatility and a devaluation of the naira exchange rate from approximately 200 naira per dollar to approximately 280 naira per dollar (as of June 30, 2016). The effect on SBI's financial results resulted in its posting a net loss of USD 18 million for the second quarter. Shikun & Binui Infrastructure Contracting in Israel: Backlog: As of June 30, 2016, the project backlog of the Israel Construction and Infrastructure segment stood at NIS 5.4 billion. It is noted that the backlog does not include NIS 1.2 billion in additional projects that the company recently won but that had not been entered into the backlog as of the end of the second quarter. Backlog: As of June 30, 2016, the project backlog of the Israel Construction and Infrastructure segment stood at NIS 5.4 billion. It is noted that the backlog does not include NIS 1.2 billion in additional projects that the company recently won but that had not been entered into the backlog as of the end of the second quarter. Shikun & Binui Israel Real Estate: Sold approximately 456 housing units during the first six months of the year, see table below. Sale of land from the Hadera Agrobank Project: On June 30, 2016, the Company completed the sale of Shikun & Binui Real Estate's rights in the Hadera Agrobank Project, which resulted in a pre-tax profit of NIS 47 million. Sold approximately 456 housing units during the first six months of the year, see table below. Sale of land from the Hadera Agrobank Project: On June 30, 2016, the Company completed the sale of Shikun & Binui Real Estate's rights in the Hadera Agrobank Project, which resulted in a pre-tax profit of NIS 47 million. Shikun & Binui International Real Estate: RED - Sale of Apartments and Purchase of Land: Sold 149 housing units and purchase land with potential for 3,600 housing units, during the first six months of the year. ADO – Public Share Offerings: In January 2016, ADO sold shares raising NIS 83 million, and in April 2016 it carried out a secondary share offering, raising an additional NIS 65 million. As of June 30, 2016, the Company's share of ADO totaled 41.9%. RED - Sale of Apartments and Purchase of Land: Sold 149 housing units and purchase land with potential for 3,600 housing units, during the first six months of the year. ADO – Public Share Offerings: In January 2016, ADO sold shares raising NIS 83 million, and in April 2016 it carried out a secondary share offering, raising an additional NIS 65 million. As of June 30, 2016, the Company's share of ADO totaled 41.9%. Renewable Energy: Ashalim Project: On April 21, 2016, the Company signed an agreement for the exit of Abengoa from the Ashalim Project and increased its total holdings to 67.5%. The Company's holding in the project's Concessionaire and Operator has remained unchanged. On August 2, 2016, the deal was completed after the receipt of the required governmental and lender approvals. The Company believes that these developments will not alter the project's original timetable or its ability to carry out the work. Update of Rating by Ma'alot: On May 17, 2016, Ma'alot updated the Company's rating from IL+ with a negative outlook to ILA with a developing outlook due to its restructuring of the interest of its Series 6, 7 and 8 bonds, upping their interest by 0.25%. Ashalim Project: On April 21, 2016, the Company signed an agreement for the exit of Abengoa from the Ashalim Project and increased its total holdings to 67.5%. The Company's holding in the project's Concessionaire and Operator has remained unchanged. On August 2, 2016, the deal was completed after the receipt of the required governmental and lender approvals. The Company believes that these developments will not alter the project's original timetable or its ability to carry out the work. Update of Rating by Ma'alot: On May 17, 2016, Ma'alot updated the Company's rating from IL+ with a negative outlook to ILA with a developing outlook due to its restructuring of the interest of its Series 6, 7 and 8 bonds, upping their interest by 0.25%. Financial Results for the First Half of 2016: Revenues: the Group's revenues for the first half of 2016 totaled NIS 2,184 million compared with NIS 2,507 million for the first half of 2015, a decline of NIS 323 million (12.9%). The decrease was due primarily from a reduction in the revenues of the International Construction & Infrastructure segment (NIS 440 million), reflecting the decline in its Nigerian activities (NIS 98 million) and the effect of the devaluation of the naira-dollar exchange rate (approximately USD 7.5 million). After the Nigerian government approved its 2016 budget, it paid most of its outstanding debt to the Company (approximately USD 90 million), and the Company renewed its work on most of its Nigerian civic projects. During the reporting period, the Company also recorded revenue declines from Togo, Ghana and Kenya, countered by increased revenues from Uganda, Guatemala and Colombia. The reporting quarter's 1.18% decline in the average US dollar/shekel exchange rate compared with its level in the first half of 2015 further reduced revenues by NIS 8 million. For the second quarter of 2016, the Group recorded a NIS 172 million decline in revenues compared to the parallel quarter of 2015, due primarily to the slowdown of its work in Nigeria (USD 42 million), as explained above. First half 2016 revenues from the Israel Construction & Infrastructure segment declined by NIS 93 million during the quarter, due primarily to a NIS 65 million reduction in revenues from apartments delivered and a NIS 32 million decrease in revenues from work performed on the Tel Aviv Student Dormitory project. During the first half of 2016, the Company delivered 194 apartments compared to 255 during the first half of 2015, but at a higher average price (NIS 1.4 million before VAT for the first half of 2016, compared with NIS 1.3 million before VAT for the first half of 2015). During the second quarter, the Company delivered 57 apartments, compared with 69 apartments in Q2 2015, at an average price of NIS 1.6 million per apartment compared with NIS 1.7 million for Q2 2015. In addition, revenues from the Renewable Energy segment declined by NIS 102 million during the first half as compared with the first half of 2015, due primarily to a decrease in the pace of construction of photo-voltaic installations. This was countered by the Israel Construction & Infrastructure segment, which posted a NIS 349 million increase in revenues compared with the first half of 2015, NIS 211 million of which represented an increase in road activities due primarily to work on the Tel Aviv Light Rail project, and NIS 91 million of which derived from building activities, including work mainly performed on projects such as the Ashalim project, the Dream Gardens Park project in Petach Tikva and the Generi Government Building project in Jerusalem. In addition, the Concessions segment posted a NIS 58 million increase in revenues, including NIS 30 million from activities related to the Generi Government Building in Jerusalem and NIS 28 million from the initiation of construction and operation of the project in Colombia. Gross profit: the Group's gross profit for the first half of 2016 totaled NIS 277 million (12.7% of revenues) compared with NIS 467 million for the first half of 2015 (18.6% of revenues). The NIS 190 million decline was primarily due to the International Construction and Infrastructure segment (down NIS 158 million), reflecting the events described above. The segment's gross margin decreased to 18% in the reporting period from 25% in the first half of 2015, a period during which the gross profit was especially high due to final project settlements. In addition, the Israel Real Estate segment recorded a NIS 25 million decline in gross profit during the period and a decrease in its gross margin from 22% to 21%. This was countered by the Israel Construction & Infrastructure segment, which posted an NIS 8 million increase in gross profit for the first half and a NIS 13 million increase for the second quarter, due primarily to an increase in the pace of its work for the Tel Aviv Light Rail. |
| Country | Israel , Western Asia |
| Industry | Financial Services |
| Entry Date | 03 Sep 2016 |
| Source | http://finance.yahoo.com/news/shikun-binui-announces-financial-results-212000166.html |
