A sharp decline in profitability in infrastructure activity eroded Electra’s operating profit. On the other hand, the activity of the Afikim bus company, which was united in results this year, actually helped to improve operating profitability.
Read more in Calcalist:
The increase in management expenses also contributed to a reduction in the operating profit line, which fell by 6.4% in the third quarter to NIS 99.5 million. At the same time, a 29% decrease in financing expenses (net) and a slight reduction in tax expenses moved the bottom line to a plus – the quarterly net profit rose by 4.7% to NIS 53.2 million.
Revenue for the quarter grew by 13.9% to NIS 2.27 billion, while the gross profit margin was 8.2% of revenue, compared with 8.7% in the corresponding quarter last year. Management expenses jumped by a sharp rate of 36.9% and amounted to NIS 80.7 million in the third quarter. Electra explained the increase (which was also recorded in this section in the previous two quarters) in the first consolidation of Afikim’s operations.
Electra consolidated the results of the Afikim transport company from the beginning of the year, but did not provide pro forma data that can teach how much that activity grew compared to last year. In addition, the activity of public transportation was split into two existing sectors of activity – operation and service and franchising, both of which saw an improvement in operating profit, in the face of a collapse in the field of infrastructure projects.
Division into sectors
In the construction and infrastructure projects segment in Israel, revenues decreased at a moderate rate and amounted to NIS 1.02 billion in the third quarter, compared with NIS 1.08 billion in the corresponding quarter last year. Operating profit in this area of activity fell by 89% and amounted to NIS 5.4 million in the quarter.
In the construction and infrastructure projects segment abroad, revenues in the quarter amounted to NIS 336 million, compared with NIS 345 million in the corresponding quarter last year. Operating profit in this segment decreased by 80%, and amounted to NIS 2.6 million in the quarter.
In the operating, service and maintenance segment, revenues in the quarter increased by 21.7% to NIS 625.9 million, while operating profit in this segment increased by 34.2% to NIS 58.4 million. The company stated that the increase was mainly due to the inclusion of Electra Afikim’s transportation activities as well as activities in the field of corona testing.
In the Real Estate Development and Construction segment, revenues increased by 23% in the quarter to NIS 114.4 million. The increase is mainly attributed to growth in the volume of projects in the field of residential real estate entrepreneurship, in line with the pace of progress. Operating profit in this segment increased by 52.1% in the quarter to NIS 13.8 million, compared with NIS 9.1 million in the corresponding quarter.
In the franchise segment, Electra recorded a significant increase in revenue to NIS 219.6 million, compared with NIS 24.2 million in the corresponding quarter. Operating profit in this segment was NIS 20.8 million, compared with NIS 1.5 million in the corresponding quarter. The increase was mainly due to the inclusion of aforementioned channels, as well as the first registration of income in the Netanya District Government project in Netanya.
Electra Group CEO Itamar Deutscher: “The financial results illustrate the positive contribution of our entry into the field of public transportation through the acquisition of Afikim and Egged Transport. “This activity is an important and growing leg for us, and is in fact another tier in Electra’s life cycle strategy, giving us access to a new market with significant potential, where Electra’s presence so far has been low.”
.