Delek Group
Group fuel
+6.32%
Base:34,800
opening:36,400
High:37,000
low:35,570
change:25,784,332
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continues its trend of improvement. Just two weeks ago, it returned to paying a dividend, for the first time since mid-2019, in the amount of NIS 450 million, with a dividend yield of 6.8%, certainly respectable. Delek is indeed the energy company, but in practice it is already considered a holding company – it owns Ithaca (89%) which operates in the North Sea region near Great Britain, New-Med Energy (formerly Delek Drilling) which looks for gas and oil in Israel and the Mediterranean Sea and carries out drilling, Delek Drilling (54%) which holds the rights to the Leviathan gas field, as well as a 25% stake in Delek, 25% in Delek Properties and it also has real estate assets. Most of Delek’s holdings are public, so the Delek Group’s value is higher, the one controlled by Yitzhak Tshuva (50%) should mainly look at the performance of the subsidiaries. An increase in their value will have a positive effect on fuel, and vice versa on decreases.
Delek paid off its previous bond series amounting to NIS 2.7 billion, and replaced them with new series. The yields say it all: during the great Corona crisis, the yields jumped to 150%, while now the yields on the new series (La, Lu, Lez, at 2.9, 3.2, 3.95 respectively) are traded at a yield of only 7.7%. Definitely impressive.
And what about the subsidiaries? Ithaca has plunged 30% since the IPO. Ithaca was only recently issued at a value significantly lower than what Delek had hoped for – 2.9 billion dollars instead of 4-6 billion dollars as the company wanted (the company, by the way, rejected the reports that were spread about this in the world and said that the issuance in the current market conditions – is a success).
But Ithaca is expected to enter the Potsi 250 index. Although it is not London’s largest index (the Potsi 100 is the largest), it is definitely good news for Ithaca and in any case also for Delek. Entering the indices creates demand and will allow the increase in the marketability of the stock, and this will of course be linked to the fuel up as well. In addition to the distribution of future dividends of Ithaca. Beyond that, Delek issued only 10 of the company and we are sure that it is currently underpriced. They thought that the issue itself was at a discount, since then the stock has fallen so that if Delek is right and the market is wrong – the stock has another significant upside. But as always in markets – the question is who is at fault.
Delek’s share price currently stands on the stock exchange at NIS 348 per share with a market value of NIS 6.61 billion. In the last 12 months, the stock is down 9%, but that’s after the meteoric rise in the stock since the 2020 recession, a 500% jump in two years. In those days, probably not many would sign this comeback – but Delek managed to meet the task. They certainly aspired to the answer and also to Idan Wells, the CEO, and thanks also to the oil prices that skyrocketed.
The CEO of Delek Idan Wells was chosen as this year’s Man of the Year by BizPortal surfers. In an interview at the Israel Investment Conference, he spoke about Delek’s success in the past year, about turning Yitzhak Tshuva’s vision into reality, about the Ithaca IPO – and the plans for the future – “We are only at the first step to exploit the tremendous potential in Ithaca” he said (for the full interview).
Yitzhak Tshuva himself was chosen as “the man of Israel’s vision”. In an interview following his election, he talked about his plans for the future: to build a water canal from the Red Sea to the Dead Sea, which will also provide sources of employment and make the Negev flourish. “I used to have no money for a movie. The message to young people – believe in yourself” (for the full interview)
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