Yitzhak Tshuva, Idan Wells (pexels photo, Flash 90, from the Delek Group website)
It seems that businessman Yitzhak Tshuva has emerged from the crisis in which the Delek Group found itself in 2020. The process was not simple and even very complex – but successful. The person who led this process in the Delek Group was Adin Wells, the group’s young CEO, and if we were a little skeptical about the results of Wells’ moves, then the 2021 reports came and the picture is even better than we thought before.
Let’s get into the dry numbers for a moment: The group’s net profit in 2021 jumped to NIS 1.4 billion, compared to a loss of NIS 1.8 billion in the corresponding period last year. NIS 6.67 billion in the corresponding period last year.
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Operating profit for 2021 increased to NIS 4.63 billion, compared with a loss of NIS 94 million in the corresponding period last year. Revenue in the fourth quarter of 2021 was NIS 2.26 billion, compared to NIS 1.63 billion in the corresponding period last year and net profit in the fourth quarter was NIS 628 million, compared to net profit of NIS 1.1 billion in the corresponding period (mainly due to one-time revenue recorded by the group in 2020). Of about NIS 900 million, from the cancellation of the impairment of Ithaca’s oil and gas assets).
Idan Wells, CEO of Delek Group, said in publishing the financial statements that: “2021 was an excellent year for Delek Group with record results in all of the group’s core activities. The company’s strong financial results speak for themselves, and are proof of the past successful business year. The group.
“We intend to take advantage of the existing historical momentum in the global energy markets to advance our strategy for 2022, which focuses on leading business moves that will strengthen activity in the group’s core assets: Ithaca, which operates in the North Sea, and New-Med Energy, which operates in the Mediterranean. fuel”.
Delek Group’s main holding is Ithaca, which is benefiting from the rise in oil prices. Ithaca ended 2021 with a net profit of $ 400 million compared to a loss of $ 286 million in the same period last year. Ithaca’s revenues in 2021 totaled approximately $ 1.470 billion in 2021, compared to $ 1.176 billion in 2020. In the fourth quarter of 2021, revenues totaled approximately $ 486 million compared to $ 285 million in the corresponding quarter last year.
Ithaca’s EBITDAX grew by about 40% in 2021 and amounted to about $ 1.03 billion, compared to $ 745 million in the corresponding period in light of the high increase in gas and oil prices, and despite the decrease in daily output in 2021 to about 56,000 oil barrels per day. (BOEd), compared to 66,000 equivalent of barrels of oil per day (BOE) in 2020.
The decrease was recorded, among other things, due to extensive maintenance work carried out in the summer of 2021 in the transmission network, as well as maintenance work that was postponed from 2020 due to the corona epidemic. After the balance sheet date and up to the date of publication of the reports, Ithaca’s production was about 70,000 barrels per day. The cost of production in 2021 was about $ 18 compared to $ 16 per barrel in the same period last year, mainly in light of the decline in daily production during 2021.
The Delek Group states that during the period of the report, Ithaca received approval from the local gas and oil authority, and began the second phase of developing the Captain reservoir, using a polymer flow method designed to stimulate oil production from the reservoir. 2024 for a number of years.
In addition, production from the Abigail Reservoir, located in the GSA area, is expected to begin in the third quarter of 2022.
Another interesting statistic that emerges from Delek Group’s reports is the valuation of Itka by an external appraiser (KROLL Duff & Phelps), according to which the value of Itka (net debt) as of the end of 2021 is about $ 3.1 billion, compared to a value of 1,878 $ 1 billion in 2020. This is an increase of about $ 1.23 billion, which reflects a 72% increase in the value of Ithaca, based on energy prices in the markets as of the end of 2021, and without taking into account the additional value of the Rubni deal, which it completed. Ithaca during the first quarter of 2022.
In Israel, Delek Group’s significant holding is Newmed Energy, which is better known by its previous name – Delek Drilling, which presented a net profit attributable to the group’s shareholders of NIS 362 million in 2021, compared with NIS 117 million in 2020. In the fourth quarter of 2021 The group’s shareholders amounted to NIS 58 million, compared with NIS 43 million in the corresponding quarter last year.
As you may recall, in 2021, the Delek Group completed a series of actions designed to significantly reduce debt and increase its liquidity. At the end of the day, the Delek Group made early repayments of NIS 2.1 billion; Making an exchange purchase offer, lowering the financial debt (net) and raising the group rating. In the past year, the Delek Group completed a process of offering the exchange purchase (switching from the LA series to the LD series) in the amount of NIS 832 million, the nominal value of the LA series, which led to an extension of the said debt for an additional two years.
These significant actions helped the Group reduce its financial (net) debt by half a billion NIS to 3.8 billion as of the end of the year, compared with a financial (net) debt of NIS 4.3 billion, as of the end of the year.
In addition, the significant improvement in the group’s financial profile led to the fact that in November 2021, the rating company Midroog, from the Moody Group, published a rating for the group’s bonds at a stable Baa3.il level, and in December 2021, the credit rating company S&P Maalot raised the group’s credit rating. To the level of BBB minus with a stable forecast.
At the same time, the company announced that Chairman Gabi Lest will end his term as chairman of the Delek Group from the end of the first quarter and will continue to serve as chairman of New-Med Energy (Delek Drilling). Udi Erez will serve as interim chairman.