Bethel Finance: Delek US swings to profit

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Delek Group Ltd. (TASE: DLEKG) subsidiary Delek US Holdings Inc. (NYSE:DK) doubled its revenue and swung to a net profit in 2011.

Full-year revenue doubled to $7.2 billion in 2011 from $3.76 billion in 2010. Net profit from continuing operations was $158.3 million ($2.78 per share) in 2011, compared with a net loss from continuing operations of $79.9 million in 2010.

For the fourth quarter, revenue rose to $2.0 billion from $989.5 million for the corresponding quarter. GAAP-based net loss from continuing operations narrowed 12-fold to $6 million (($0.10 per share) for the fourth quarter of 2011 from $70.9 million for the corresponding quarter of 2010. Non-GAAP net loss from continuing operations was $4.5 million, or ($0.07 per share).

Delek US refining revenue from its Tyler refinery in Texas, and El Dorado in Arkansas rose to $30.7 million for the fourth quarter from $11.7 million for the corresponding quarter. Tyler refinery boosted production to 63,722 barrels per day in the fourth quarter from 55,318 barrels per day in the corresponding quarter, and boosted sales to 63,211 barrels per day from 54,405 barrels per day. El Dorado's production was 82,468 barrels per day during the fourth quarter and its sales were 75,694 barrels per day

Delek US completed three strategic acquisitions during the fourth quarter of 2011 and in early 2012: Paline Pipeline Company LLC, which owns a crude oil pipeline network in Texas for $50 million from Ergon Terminaling Inc.; the Nettleton pipeline network to the company's refinery in Tyler, Texas, for $12.3 million, and the Big Sandy product terminal and refined products pipelines in Texas for $11 million.

Delek had $225.9 million in cash and $432.6 million in debt at the end of 2011, giving a net debt of $206.7 million

Delek US president and CEO Uzi Yemin said, "During 2011, we more than doubled our production capacity with the acquisition of a second refinery and significantly increased our portfolio of logistics assets in the Mid-Continent region. Even after funding two acquisitions last year, we managed to reduce our net debt outstanding by $40 million, while continuing to return value to our shareholders through a combination of regular and special cash dividends."

Looking ahead, Yemin said, "During the first quarter 2012, Mid-Continent and Gulf Coast refining economics have improved when compared to the prior-year period, providing a solid start to what could be another strong year."

Delek US's share price rose 3.8% yesterday to $13.55 billion, giving $786 million