Delek Group Announces Consolidated Results for the First Nine Months of 2013

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PR Newswire

TEL AVIV, Israel, Nov. 28, 2013

TEL AVIV, Israel, Nov. 28, 2013 /PRNewswire/ -- Delek Group Ltd. (TASE: DLEKG, OTCQX: DGRLY) (hereinafter: "Delek Group" or "The Group") announced today its results for the three and nine month period ended September 30, 2013. The full financial statements will be available in English on Delek Group's website at: www.delek-group.com.

FIRST NINE MONTHS 2013 HIGHLIGHTS

Group operating profit of NIS 1.5 billion, an increase of 69% compared with NIS 0.9 billion in the same period last year;
Net income reached NIS 625 million for the nine month period and NIS 70 million for the third quarter;
Delek Group announced a dividend of NIS 70 million for the third quarter of 2013.

Group revenues for the first nine months of 2013 amounted to NIS 28.4 billion, a slight increase compared with NIS 28.2 billion in the first nine months of 2012.

Net income in the first nine months of 2013 totaled NIS 625 million a significant improvement compared with a net income of NIS 243 million in the first nine months of 2012. The increase is due to the sale of 3.6% of Delek US shares in the second quarter of 2013, and from the net revaluation of the investment balance following effective loss of control. Subsequently, a capital gain in the amount of NIS 467 million, net, was recorded. In addition, the insurance and financial services sector contributed a significant portion to the Group's net income, amounting to NIS 316 million in the first nine months of 2013. Net income in the third quarter of 2013 totaled NIS 70 million, after a deduction of a one off tax expense this quarter of NIS 100milion as a result of the expected increase in Corporate Tax, compared with NIS 93 million in the third quarter of 2012.

Group total assets as of September 30, 2013, amounted to NIS 125 billion, compared with NIS 123 billion as of December 31, 2012.

Commented Mr. Bartfeld, CEO of Delek Group, "Delek Group continues its strategy of increasing our focus on the upstream part of our business while at the same time successfully reducing the Group's leverage. We are very pleased with the production performance of Tamar, our natural gas discovery (together with our partners) off the coast of Israel that started producing earlier this year. Our focus is now on advancing the Leviathan project, as quickly as possible."

Continued Mr. Bartfeld, "The Supreme Court decision to reject the appeal filed against the decision of the Government of Israel with regard to the natural gas export policy, paved the way for promoting the export potential of natural gas from the reservoirs which are held by Delek Group and its gas partnerships. Consequently, the gas partnerships, together with their partners, are exploring export options to various countries in the region through pipeline, LNG facilities and/or FLNG. In addition, the partners of the Leviathan project continue their negotiations with Woodside Petroleum Ltd. over potential participation in the Leviathan project. Looking forward, we intend to continue to focus on energy and develop our activities in this area which will be a major and important accelerator of growth over the coming years."

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MAIN BUSINESS HIGHLIGHTS
*CONTRIBUTION OF PRINCIPAL OPERATIONS TO NET INCOME (NIS MILLIONS)**

	9M 2013	9M 2012	Q3 2013	Q3 2012	FY 2012
US Fuel Sector Operations	194	546	(7)	232	669
Oil and Gas Exploration	46	(6)	41	(31)	22
Delek Europe	46	66	27	26	57
Israeli Fuel Sector Operations	30	13	16	15	9
UK Service Station Sector	3	1	24	8	(16)
Insurance and Finance Operations in Israel	278	62	55	22	150
Insurance and Finance Operations in US	38	(1)	17	24	33
Automotive operations	108	27	24	(1)	77
Contribution to Net Income before Capital Gains & Others	743	709	197	295	1,001
Others and Capital Gains	(118)	(466)	(127)	(202)	(555)
Net Income attributed Group's shareholders	625	243	70	93	446

* Parts of the above table have been extracted from Delek Group's First Nine Months 2013 Directors Report.
Please review the full report available on the Group's website www.delek-group.com to view the notes for each of the items above.

ENERGY & INFRASTRUCTURE

Oil and Gas Exploration Sector Highlights

Tamar, a 10 TCF natural gas discovery off the coast of Israel; Tamar and Yam Tethys together produced 4.5 BCM in the first nine months of 2013, and 2.1 BCM in the third quarter of 2013. In addition, Tamar sold condensate at a quantity of 84 thousand of barrels in the third quarter of 2013.

In the past couple of days the Group gas subsidiaries announced that South West Tamar exploration rig has reached target – final depth of 5,340 meters below sea level, and the partners concluded that strong signs of natural gas were discovered based on logging tests while drilling that were carried out by the Operator, Noble Energy Mediterranean Ltd.

Leviathan, a 19 TCF natural gas discovery off the Northern coast of Israel; The Supreme Court in Israel made the decision on October 21, 2103, to reject the petitions concerning the decision taken by the Israeli government to adopt the Zemach Committee recommendations regarding export options for natural gas. Various production options for Leviathan are still being considered.

Aphrodite, a 5.2 TCF (Contingent & Prospective) natural gas discovery located in the Block 12 license, off the coast of Cyprus; in late September production tests at "Aphrodite A-2" in the Cyprus Block 12 License were conducted and completed successfully. This was followed by an announcement at the beginning of October that the "Aphrodite A-2" appraisal well was completed. An updated reserves report will be published on completion.

Gas Production Summary; Net income from the sector for the first nine months of 2013 was NIS 46 million, as compared to a net loss of NIS 6 million in the same period during of 2012. The increase in net income is mainly due to the recognition of revenues from the Tamar project and recognition of the profit from leasing oil and gas assets following the entry into force of the agreement granting rights to use the facilities in the Yam Tethys project.

Delek US (NYSE: DK; Delek Group holds 31% end-Q3 2013): Net income in the first nine months of 2013 was NIS 411 million compared with a net income of NIS 842 million in the first nine months of 2012. The declined profitability was due to the decrease in Gold Coast crack spreads 5-3-2 from $29.96 in the third quarter last year to $12.30 in the third quarter of 2013. Also the activity was adversely affected by changes in market conditions, whereby the oil originating in Midland Texas (WTI) was traded at a discount of approximately $0.28 per barrel in the third quarter compared with a discount of $1.74 in the third quarter of last year.

Delek – the Israel Fuel Company Ltd. (fully held by Delek Group): Net income in the first nine months of 2013 was NIS 36 million, compared with a net income of NIS 24 million in the first nine months of 2012. The increase was primarily due to inventory gains.

Delek Europe (Delek Group holds 100% indirectly)Net income in the first nine months of 2013 was NIS 46 million, compared with a net income of NIS 68 million in the first nine months of 2012. The decline was due to a decrease in the number of litres sold, which was partially offset by an increase in sales of convenience stores.

Roadchef (fully held by Delek Group).Net income for Roadchef was NIS 3 million in the first nine months of 2013 versus a net income NIS 1 million in the first nine months of last year. The increase was due to increase in operating efficiencies due to the various steps management have taken over the past year.

INSURANCE AND FINANCIAL SERVICES

The insurance and financial services sector contributed NIS 316 million to the Group's net income in the first nine months 2013, compared to a contribution of NIS 61 million in the same period last year.

DIVIDEND DISTRIBUTION

On November 27, 2013, the Board of Directors of Delek Group declared a cash dividend distribution for the third quarter of 2013 in the amount of approximately NIS 70 million (approximately NIS 5.9622 per share) to the shareholders on record as of December 22, 2013 and the dividend will be paid on January 5, 2014.

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