Shai Dahan, co-CEO of Alden (photo of the company’s website)
Eldan Transportation, one of the leading leasing and car rental companies in the economy, published its financial reports for the third quarter and the first nine months of 2022, which show an increase in gross and operating profitability, and a sharp increase in net and total profit. In Moked: revenues in the third quarter amounted to approximately NIS 353.9 million , compared to approximately NIS 408.6 million in the corresponding quarter last year.
In the operational leasing sector, revenues from external customers totaled approximately NIS 280 million, compared to approximately NIS 299.6 million in the corresponding quarter last year. The change in income resulted from a decrease in income from the sale of vehicles used for the sector’s activity as a result of a decrease in the amount of vehicles sold, offsetting an increase in the average value for the vehicle. On the other hand, there was an increase in the rental income attributed to the sector’s activity as a result of an increase in the average price for the car, offsetting a decrease in the number of rental days for the sector’s customers. The sector’s profits rose in the quarter to approximately NIS 78.9 million, compared to approximately NIS 54.1 million in the corresponding quarter last year.
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In the vehicle rental sector, revenues from external customers increased to approximately NIS 65.5 million, compared to approximately NIS 61.2 million in the corresponding quarter last year. The increase in income was due to an increase in rental income attributed to the sector as a result of an increase in the average value for the vehicle, offsetting a decrease in the number of rental days for the sector’s customers. The sector’s profits doubled to approximately NIS 15.4 million, compared to approximately NIS 7.3 million in the corresponding quarter last year.
In the trade sector, revenues from external customers amounted to approximately NIS 6.6 million, compared to approximately NIS 46.1 million in the corresponding quarter last year. The decrease was due to a decrease in the amount of vehicles sold to the customers of the sector, mainly as a result of the global shortage in the supply of vehicles. The segment’s profits amounted to approximately NIS 0.4 million compared to approximately NIS 1.2 million in the corresponding quarter last year. Gross profit in the quarter grew by approximately 37.7% to approximately NIS 122.5 million (approximately 32.7% of revenues), compared to approximately NIS 89 million in the corresponding quarter last year (approximately -21% of revenues). The improvement was mainly due to a decrease in depreciation expenses following the decrease in the company’s vehicle fleet.
The operating profit increased in the quarter by approximately 55.5% to approximately NIS 82.5 million (approximately 23.3% of revenues), compared to approximately NIS 53.1 million (approximately 13% of revenues) in the corresponding quarter last year. Net financing expenses in the quarter amounted to approximately NIS 24.7 million, compared to approximately NIS 21.4 million in the corresponding quarter last year. The company recorded an increase of about 77% in total profit in the third quarter of 2022 to about NIS 44.5 million, compared to about NIS 25.1 million in the corresponding quarter last year. The utilization of the vehicle fleet (average occupancy rate) amounted to about 87.2% in the quarter, compared to about 84.9% in the corresponding quarter last year.
Revenues during the first nine months of 2022 amounted to approximately NIS 1.06 billion, compared to approximately NIS 1.19 billion in the corresponding period last year. The decrease is mainly due to a decrease in revenues from the sale of vehicles due to a decrease in the amount of vehicles sold. The aforementioned decrease was partially offset by the increase in revenues from the car rental segment. The gross profit in the period increased by approximately 38.5% to approximately NIS 346.5 million (approximately 32.7% of revenues), compared to approximately NIS 250.2 million (approximately 21% of revenues) in the corresponding period last year. Operating profit in the period grew by approximately 58.1% to approximately NIS 230.8 million (approximately 21.8% of revenues), compared to approximately NIS 146 million (approximately 12.3% of revenues) in the corresponding period last year.
Net financing expenses in the period amounted to approximately NIS 69.2 million, compared to approximately NIS 61.7 million in the corresponding period last year. The company recorded an increase of approximately 89.8% in total profit during the period to approximately NIS 125.9 million, compared to a profit of approximately NIS 66.3 million in the corresponding period last year.
The utilization of the vehicle fleet (average occupancy rate) amounted in the first nine months of 2022 to approximately 88.2%, compared to approximately 86.4% in the corresponding period last year. The company’s equity as of September 30, 2022 increased to approximately NIS 633 million and constitutes approximately 22.7% of the company’s balance sheet. As of September 30, 2022, the company has cash and cash equivalents totaling approximately NIS 209.5 million.
In October 2022, the company’s long-term rating was raised to ‘ilA’ and the short-term rating was set to ilA-1′ The company’s guaranteed senior debt rating is ‘ilA+1’. The rating increase was made due to an improvement in the company’s financial profile. Rating forecast – stable. In October 2022, the company completed the expansion of Series G bonds to the extent of approximately NIS 195 million, by way of a private placement to classified investors. In June 2022, the company completed the expansion of Series E bonds to the extent of approximately NIS 92.5 million, by means of a public offering private for classified investors.
In February 2022, the company raised approximately NIS 224 million as part of the issuance of a new series of bonds – Series 7. In light of the high demand, the raising was locked at a price that reflects a return of approximately 0.71%, with an MOR of approximately 3.8 years. On the eve of the issuance, the bond series received an A rating by the rating company S&P Maalot. In June 2022, the company completed the expansion of the said bond in the amount of 38.5 million shekels, by way of a private offering to classified investors. In January 2022, the company entered into a cooperation agreement with the Direct Financing Company to establish a joint venture, 70% of which will be held by Aldan and the balance by the Direct Financing Company, to provide loans to customers who purchase vehicles from Alden or other companies on which Aldan and Direct Financing will agree.
In February, the company completed the issuance of the new series of bonds, series 7. In the institutional stage, the company received high demands amounting to approximately NIS 553 million, and in total (institutional and public together) chose to raise an amount of approximately NIS 224 million at an annual interest rate of approximately 1%, at a price of 1011 agoras. In light of the high demands, the fundraising was closed At a price that reflects an effective indexed return of about 0.71%, at an interest rate of about 3.8 years.
Shai Dahan, joint CEO of Alden: “We conclude the third quarter of 2022 with good results as a continuation of the trend of the previous quarters. Also, we continue to improve the activity alongside business development and strengthening Alden’s positive reputation. The good results that we have consistently presented in recent years are the result of the maturation of strategic processes that we have led in the company, as well as the supportive but also challenging business environment. As we have done for many years, we make sure to adapt the company’s activities to the latest trends in the automobile market, when today the emphasis is in the field of electric vehicles, Alden is a leader in this field both in the leasing market, in the car rental market and in the sale of new and used electric vehicles. We will continue to implement the company’s strategy while maintaining the company’s financial strength and flexibility.”
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