Thursday, November 3, 2011

Bethel Finances: Delek US moves to profit

www.bethelfinance.com

Delek Group Ltd. (TASE: DLEKG) subsidiary Delek US Holdings Inc. (NYSE:DK) posted a net profit from continuing operations of $92.5 million ($1.58 per share) for the third quarter of 2011, compared with a net loss from continuing operations of $9.9 million for the corresponding quarter of 2010.

Adjusted net profit from continuing operations was $88.8 million ($1.52 per share). The figure excludes a $3.7 million capital gain on Delek US's investment in Lion Oil Company.

Delek US had $218.7 million in cash and $424.1 million in debt at the end of September, resulting in a net debt position of $205.4 million, after reducing its debt by $35 million during the quarter.

Delek US president and CEO Uzi Yemin said that the refining business from its Tyler and El Dorado refineries in Texas and Arkansas, respectively, contributed to the company's record net profit. He added, "The integration of Lion Oil continues to proceed as planned. Our near-term focus remains on identifying and capturing acquisition-related synergies that exist between our Tyler and El Dorado refineries. During the third quarter, we began work on a series of 'quick-hit' capital projects at both refineries that we expect to be completed during the second half of 2012. We believe these projects, with an estimated cost of approximately $20 million, have the potential to generate up to $30 million of incremental contribution margin annually, given current market conditions."

Delek US's share price rose 4.1% in New York yesterday to $14.66, giving a market cap of $850 million. Delek Group's share price rose 0.4% by early afternoon on the TASE today to NIS 719.70, giving a market cap of NIS 8.2 billion

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