Did the Egged deal pay off? These are the profits that Keystone enjoyed

Keystone, under the management of Navot Bar, which invests in assets in the infrastructure world, reports today (Monday) its results for the third quarter and the first nine months of 2022 and records a significant increase in dividend income and receipts due to investments, loans and interest, in profit and cash flow from current operations.

Keystone’s income from dividends, investment receipts, loans and interest amounted in the first nine months of 2022 to approximately NIS 134.1 million, compared to approximately NIS 39.3 million in the corresponding period last year.

The net profit in the period rose sharply to a total of approximately NIS 97.1 million, compared to a loss in the corresponding period last year. The cash generated from current activities during the reporting period totaled approximately NIS 106.8 million in the period, more than 3 times compared to the corresponding period last year.

Keystone’s investments as of September 30, 2022 amount to approximately NIS 2.6 billion and the equity capital amounted to approximately NIS 1.5 billion. During the reporting period, Keystone distributed a dividend of approximately NIS 40 million which reflected a return of approximately 4% to the equity capital.

Significant events for the nine months of 2022:

– Acquisition of 60% of “Egged” shares – by a partnership in which Keystone owns approximately 80.8%, in exchange for approximately NIS 2.8 billion, and financed by a banking consortium in the amount of approximately NIS 1.44 billion. Completion of the Egged transaction was carried out after the balance sheet date. Keystone’s financial statements include the amount of cash invested by Keystone in the purchasing partnership, which amounted to approximately 1.1 billion NIS.

– Completion of the purchase of 34% of the IPM power plant – the purchase of Keren Noi, the Phoenix and Omi Partners’ shares in the IPM power plant in Be’er Tovia as well as the “Phoenix loan” in exchange for approximately NIS 600 million. The plant operates with a capacity of 451 MW and in accordance with the 914 regulation, so that – 85% of the electricity produced there is sold to the electricity grid, and the rest to private consumers. A first payment of approximately NIS 220 million was paid during 2021, the rest of the amount was paid upon completion of the deal in February 2022.

-Provision of loans (partly converted) for the purchase of the Hagit power plant, the company provided loans, partly converted, to the Adeltec group in the amount of approximately NIS 108 million to finance its share in the purchase of the Hagit power plant located in the north of the country and having an aggregate production capacity of approximately 660 megawatts. Part of the loans is expected to be converted to investment, when the holdings after the conversion will reflect a holding of about 16.33% in the chain in the capital of the partnership that owns the station.

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Navot Bar, CEO of Keystone: “The results are evidence of the successful implementation of the fund’s investment strategy, which combines a diverse base of quality yielding assets alongside assets under construction and investments that will be engines of growth. Keystone, anticipating an electricity market with shortages, has worked in the last two years to significantly establish itself in the electricity production market through investments in private power plants including IPM, Ramat Hovav and Hagit. Looking ahead, Keystone believes that the public transportation market will experience growth, which was the basis of our recent investment in Agad.