Alon Holdings Blue Square - Israel Ltd. Announces Financial Results for the First Quarter of 2012
ROSH HA'AYIN, Israel, May 29, 2012 /PRNewswire/ --
Alon Holdings Blue Square-Israel Ltd. (NYSE and TASE: BSI) today announced its financial results for the first quarter ended March 31, 2012.
- In the supermarkets segment the Company initiated significant efficacy measures including among others exiting from approximately 10 losing branches, saving operating and manpower costs, improvement and saving in the supply chain, improving the trade margins by increasing the scope of the private brand in order to improve the operating profit.
- In the commercial and fueling sites there was a massive improvement. The operating profit in this quarter amounted to NIS 33 million compared to NIS 17.5 million in the fourth quarter of 2011.
- The Non Food segment has gone through a comprehensive change from an operating loss of NIS 28 million in the fourth quarter of 2011 to a profit of NIS 4.7 million this quarter.
- BSRE continues to grow, develop and better its properties while presenting impressive results and these days it completes the purchase of the land in the wholesale market and commenced erecting the Comverse building in Ra'anana.
- In the second quarter of 2012, the Company launched cellular operations under the brand "YouPhone"
The main results of the quarter as compared to the comparable quarter:
Data in millions of NIS 1-3 2012 1-3 2011 10-12 2011
---------- ---------- ------------
Net revenues 3,178.5 3,007.1 3,039.4
Gross profit 698.6 729.5 689.4
Rate of gross profit 22.0% 24.3% 22.7%
Operating profit (before other
gains and losses and changes in
fair value of investment
property) 35.6 91.7 7.1
Rate of operating profit 1.1% 3.1% 0.2%
Finance expenses, net 43.2 40.7 41.0
Net profit (loss) for the period 2.8 37.7 (66.1)
Results for the first quarter of 2012[1]
Gross revenues
Revenues (including government levies) in the first quarter of 2012 amounted to NIS 3,896.4 million (U.S. $1,048.8 million) as compared to revenues of NIS 3,709.5 million in the comparable quarter last year, an increase of 5.0%. The main increase in revenues was due to an increase in the revenues of Dor Alon compared to the corresponding quarter last year.
Revenues from sales, net
Revenues of the Supermarkets segment - amounted in this quarter to NIS 1,626.0 million (U.S. $437.7 million) as compared to NIS 1,636.5 million in the corresponding quarter last year, a decrease of 0.6%. The decrease in revenues was due to a reduction in the same store sales (SSS) at a rate of 2.6% which was mainly due to the increasing competition and opening of commercial areas. This decrease was partially offset by the opening of 9 new branches from the beginning of the first quarter of 2011. Sales per meter amounted in the first quarter of 2012 to NIS 4,305 (U.S. $1,159) compared to NIS 4,441 in the comparable quarter last year.
Revenues of the Commercial and Fueling sites segment - amounted in this quarter to NIS 1,430.3 million (U.S. $385.0 million) as compared to NIS 1,248.2 million in the corresponding quarter last year, an increase of 14.5%. The main increase was due to an increase in the price of petrol and an increase in sales in the convenience stores.
Revenues of the non-food segment - a reduction in revenues by 1.6% from NIS 116.1 million in the first quarter of 2011 to NIS 114.2 million (U.S. $30.7 million) in the current quarter. The decrease in revenues is mainly due to a decrease in sales to franchisees which was partially offset by an increase in Naaman and Verdinon and in stores transferred from franchise to self operation.
Revenues of the real estate segment - an increase in rental income of 27.0% from NIS 6.3 million in the first quarter of 2011 to NIS 8.0 million (U.S. $2.2 million) in the current quarter. The increase is mainly due to an increase in leased space.
Gross profit in the first quarter of 2012 amounted to NIS 698.6 million (U.S. $188.1 million) (22.0% of revenues) as compared to gross profit of NIS 729.5 million (24.3% of revenues) in the comparable quarter last year and as compared to NIS 689.4 million in the fourth quarter of 2011. The decrease in the gross profit compared to the corresponding quarter last year was mainly due to the decrease in the gross profit in the commercial and fueling segment due to a reduction in the marketing margin and erosion in the gross profit of the supermarket segment resulting from increasing competition. The increase in gross profit compared to the fourth quarter of 2011 was derived from an increase in the gross profit margin in the Non Food segment.
In the Supermarkets segment, gross profit amounted to NIS 436.6 million (U.S. $117.5 million), (26.8% of revenues) compared to NIS 458.1 million in the comparable quarter last year (28.0% of revenues), a decrease of 4.7% stemming from decrease in gross profit margin due to the public protest and the increasing competition.
In the Commercial and fueling sitessegment, gross profit amounted to NIS 205.2 million (U.S. $55.2 million), (14.3% of revenues) compared to NIS 218.4 million in the comparable quarter last year (17.4% of revenues) and compared to NIS 204.0 million (15.7% of revenues) in the fourth quarter of 2011. A decrease of 6.0% compared to the corresponding quarter last year deriving from a reduction in the marketing margin of supervised gasoline and was partially offset by increase in the activity of convenience stores. An increase of 0.6% in the gross profit compared to the fourth quarter of 2011 is mainly attributable to changes in the petrol prices.
In the Non food segment, gross profit amounted to NIS 48.7 million (U.S. $13.1 million), (42.7% of revenues) compared to NIS 46.7 million in the comparable quarter last year (40.2% of revenues). The increase in gross profit mainly drives from increase in retail sales.
Selling, general and administrative expenses in the first quarter of 2012 amounted to NIS 663.0 million (U.S. $178.5 million) (20.9% of sales), compared to expenses of NIS 637.7 million (21.2% of revenues) in the comparable quarter last year, an increase of 4.0%. The main increase was recorded in the Supermarkets segment due to the costs relating to the opening of branches.
In the Supermarket segment, selling, general and administrative expenses amounted to NIS 419.9 million (U.S. $113.0 million) compared to expenses of NIS 408.5 million in the comparable quarter in 2011, an increase of 2.8% that resulted from net opening 9 new branches and was partly offset by a decrease in the expenses of SSS stores.
In the Commercial and fueling sitessegment, these expenses amounted to NIS 172.0 million (U.S. $46.3 million) compared to NIS 168 million in the first quarter of 2011, an increase of 2.4%, mainly deriving from opening new fueling sites and was offset by efficiency measures beginning from the fourth quarter of 2011.
In the Non food segment, these expenses amounted to NIS 44.4 million (U.S. $11.9 million) (an increase of 9.6%) compared to NIS 40.5 million in the comparable quarter in 2011. The increase derives from an increase in the retail activity.
Operating profit (before other gains and losses and changes in fair value of investment property) in the first quarter of 2012 amounted to NIS 35.6 million (U.S. $9.6 million) (1.1% of revenues) as compared to NIS 91.7 million (3.1% of revenues) in the comparable quarter last year, a decrease of 61.2%. The decrease in the operating profit was mainly due to increasing competition in the supermarkets segment, decrease in marketing margin in the commercial and fueling sites and the increase in selling, general and administrative expenses in the Supermarkets segment and the commercial and fueling sites, from opening new supermarkets and new commercial and fueling sites.
In the Supermarkets segment, operating profit decreased from NIS 49.6 million to NIS 17.2 million (U.S. $4.6 million) due to decrease in sales and increase in expenses as mentioned above.
In the Commercial and fueling sites segment, operating profit decreased from NIS 50.3 million in the first quarter of 2011 to NIS 33.2 million (U.S. $8.9 million) due to reducing the marketing margins.
In the Non food segment, operating profit increased from NIS 2.7 million in the comparable quarter in 2011 to NIS 4.7 million (U.S. $1.3 million) due to increase in retail sales.
In the real estate segment, operating profit decreased from NIS 2.5 million in the comparable quarter in 2011 to NIS 2.2 million (U.S. $0.6 million) due to increase in selling administrative and general expenses from marketing apartments in the wholesale market complex.
Changes in fair value of investment property in the first quarter of 2012 the Company recorded profit from the increase in the value of investment property in the amount of NIS 2.7 million (U.S. $0.7 million) compared to NIS 3.1 million in the comparable quarter last year.
Operating profit in the first quarter of 2012 amounted to NIS 38.1 million (U.S. $10.2 million) (1.2% of revenues) as compared to operating profit of NIS 92.9 million (3.1% of revenues) in the comparable quarter last year, a decrease of 59.0%.
Finance costs, net in the first quarter of 2012 amounted to NIS 43.2 million (U.S. $11.6 million) as compared to net finance costs of NIS 40.7 million in the comparable quarter last year. The increase in finance costs, net derives from decrease in finance income (last year, revenues from revaluation of Diners option that was realized in the third quarter of 2011), net of decrease in finance costs this quarter in CPI linked loans following an increase of inflation at a lower rate than last year.
Taxes on income in the first quarter of 2012 the tax benefit totaled NIS 4.3 million (U.S. $1.2 million) as compared to tax expenses totaled NIS 15.7 million in the comparable quarter last year (an effective tax rate of 29.4% as compared to the statutory rate of 24%).
Net income for the first quarter of 2012 amounted to NIS 2.8 million (U.S. $0.8 million) compared to a net income of NIS 37.7 million in the first quarter of 2011 and compared to a net loss of NIS 66.1 million in the fourth quarter of 2011. The net loss in the first quarter of 2012 attributable to equity holders of the Company amounted to NIS 6.3 million (U.S. $1.7 million) or NIS 0.10 per share (U.S. $0.03) and the profit attributable to the non-controlling interests amounted to NIS 9.1 million (U.S. $2.5 million).
Cash flows for the first quarter of 2012
Cash flows from operating activities: Net cash flow from operating activities amounted to NIS 162.8 million (U.S. $43.8 million) in the first quarter of 2012 compared to NIS 216.0 million from operating activities in the comparable quarter last year. The decrease in this quarter cash flows from operating activities compared to the comparable quarter is characterized by a decrease in operating profit, the timing of receiving advances from purchasers of apartments of NIS 86.1 million in the comparable quarter compared to NIS 6.4 million in this quarter, increase in working capital needs due to increase in petrol prices that was partly offset by a partial advance of credit cards balances.
Cash flows used in investing activities: Net cash flows used in investing activities amounted to NIS 156.2 million (U.S. $42.0 million) in the first quarter of 2012 as compared to net cash used in investing activities of NIS 216.4 million in the comparable quarter. Cash flows used in investing activities in the first quarter of 2012 mainly included the purchase of property and equipment, investment property and intangible assets of total NIS 98.6 million as well as the grant of long term loans of NIS 23.6 million mainly to the controlling shareholder, investment in restricted deposits of NIS 8.9 million and investments in securities of NIS 95.2 million, net of proceeds from realization of securities of NIS 65.2 million and decrease in short term bank deposits of NIS 6.5 million.
In the first quarter of 2011 the cash flows used in investing activities mainly included the purchase of property and equipment, investment property and intangible assets of total NIS 90.9 million as well as the grant of short term loans of NIS 61.7 million mainly to the controlling shareholders, investment in advances from purchasers of apartments of NIS 87.2 million and investments in securities of NIS 21.7 million, net of proceeds from realization of securities of NIS 19.6 million.
Cash flows from financing activities: Net cash flows from financing activities amounted to NIS 20.8 million (U.S. $5.6 million) in the first quarter of 2012 as compared to net cash flows from financing activities of NIS 10.1 million in the corresponding quarter last year. The cash flows from financing activities in the first quarter of 2012 mainly included issuance of bonds of NIS 264.2 million that was offset by interest payments of NIS 56.9 million and the repayment of loans of NIS 119.8 million and decrease in short term credit from banks of NIS 62.7 million. The net cash flows provided by financing activities in the first quarter of 2011 included mainly, the payment of interest of NIS 55.7 million and repayment of loans of NIS 59.6 million, net of the increase in short term credit from banks of NIS 137.3 million.
Comments of Management
Mr. David Weissman, Chairman of the Board of Directors and Chief Business Officer - A great effort was invested in this quarter in the activities of the Non-food group BEE, which operates about 250 stores, and we are delighted that the BEE group underwent a change over from an operating loss of approximately NIS 28 million in the fourth quarter of 2011 to an operating income of NIS 4.7 million, and if it were not for events of one-time negative nature, the profit would be even higher.
Dor Alon has proven again to be the best and leading company in the industry and after the fourth quarter, in which the State nationalized a large part of revenues in the industry, the group once again presented positive results above and beyond other competitors in the market.
"Etz Ha'alon" ("Oak Tree") of the group, BSRE, continues to show excellent financial results and a continued impressive growth including the involvement in major projects in Israel, the Wholesale Market in Tel Aviv (once in a century), the Kiryat Hasharon Mall in Netanya and the Ra'anana Comverse building.
The YOU Loyalty Club expanded and has recently launched the cellular operations under the brand YOUPHONE, introducing the ultimate "Triple", food, fuel and communications as a single economic package for families. We are confident in the success of the Company and we can already feel its feedback from the market. The YOU club is the main component in leading the group synergy.
Currently, the Mega chain is undergoing significant changes in order to return to a profitable path.
This is the place to thank all of the Group's employees, more than 10,000, for their recruitment and contribution to our success."
Regarding the Supermarket segment Mr. Zeev Vurembrand, CEO, said: "This quarter was characterized by continued increased competition and accelerated opening of new commercial areas. Actions that were taken in the first quarter, by way of price reductions, resulted in decrease of profitability.
The Company takes several commercial measures and measures to improve operating efficiency that will result in increased operating profit gradually. In the first quarter, the dismissal of 50 employees, of all management levels in the Company's headquarters was completed, while implementing organizational change, as well as cutting down on 300 employees in the stores in the second quarter.
In addition, the Company took several efficiency measures on selling, operating and advertising expenses.
These measures shall result in savings of NIS 80 million in annual terms.
In addition, we currently consider exiting from 10 losing supermarkets in a total area of 20,000 sq.m.
Following the annual strategic development plan, we intend to open during the year 9 additional branches, most of which are in the "Mega in Town" format and that in addition to 5 branches we opened since the beginning of the year.
After a long preparation of over a year and the success of the pilot, Mega Retail commenced in May the transfer to self stewarding system in 30 of its branches. The move to self stewarding shall be performed gradually according to geographic division which is scheduled to reach a full operation until the beginning of 2013. We believe that the move to self stewarding shall result in improving the sales floor process, improve operating expenses and rendering an immediate and full service to our customers.
Additional Information
- As of March 31, 2012, the Company operated 215 supermarkets divided as follows: Mega In Town -117; Mega Bool - 70; Shefa Shuk - 17; Eden Teva Market -20 of which 9 Eden within Mega, Dor Alon - 198 fueling stations and 200 convenience stores and the Bee Group operates 249 branches (some franchised).
- EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization)[2]in the first quarter of 2012 EBITDA was NIS 105.9 million (U.S. $28.5 million) (3.3% of revenues) compared to NIS 160.8 million (5.3% of revenues) in the comparable quarter of 2011.
Events during the reporting period
- Effective January 2012, the Company applies the amendment to IAS 12, Taxes on Income - deferred taxes on investment property. The adoption of the standard was made retrospectively. The effect of the above change on the presented comparative figures are decrease in provisions for deferred taxes of NIS 3 million and increase in accumulated earnings of NIS 2.4 million and increase in non controlling interests of NIS 0.6 million. The above amendment had no material effect on the statement of income.
- On January 25, 2012, Midroog announced on lowering its rating on bonds (series A and C) issued by the Company, from A1 to A2 with stable outlook. In addition, Midroog granted A2 rating with stable outlook for bonds up to NIS 200 million par value the Company intends to issue by expanding Series C or by issuance of new Series with a duration up to 6 years.
- Issuance of bonds:
* On January 4, 2012, the bonds series of BSRE (Series D) was expanded by a private offering of NIS 150,000 thousand par value of bonds (Series D) to institutional investors for 98.5% of their par value, reflecting a return of 5.8%.
* On February 15, 2012, the bonds series of Dor Alon (Series D) was expanded by a private offering of NIS 119,900 thousand par value of bonds (Series D) to institutional investors for 100.95% of their par value, reflecting a return of 6.9%.
4. Commitment for establishing a power plant
On February 8, 2012, a corporation controlled by Dor Alon (55% held) entered into a detailed agreement with Sugat Sugar Refineries Ltd. (Sugat) under which the corporation shall establish a power plant on its premises with total capacity of up to 124 Mega Watt. Under the agreement, the power plant shall provide the energy needs of Sugat for 24 years and 11 months and in addition, the corporation may sell steam and electricity to third parties.
It was further agreed that in the stage preceding the first stage, the corporation shall connect the Sugat plant to the natural gas transmission systems, shall convert the existing energy plant of Sugat to a dual system enabling the operation by fuel oil and natural gas and shall operate and maintain for Sugat its existing energy plant, all as determined in the detailed agreement.
On March 1, 2012, the corporation entered into an agreement with Israel Natural Gas Lines Ltd. ("INGL") to connect Sugat to the national transmission system for natural gas and to provide natural gas transmission services by INGL (the agreement).
Pursuant to the agreement, INGL shall establish the infrastructures that include, inter alia, the transmission piping and the facilities necessary to connect the Sugat plant to natural gas and shall install the infrastructures necessary for natural gas transmission to the power plant which is planned to be built by the corporation on the Sugat plant premises.
The agreement is for a period until July 31, 2029 with a renewal option of five additional years.
Pursuant to the agreement, the corporation shall bear the connecting expenses to the transmission system which is estimated at NIS 15 million. In addition the corporation is committed to pay the current annual payments to INGL for transmission services until the end of the agreement term in an immaterial amount, regardless of whether the corporation uses the transmission services or not.
Post balance sheet events
- On April 11, 2012, the bonds series of the Company, Series C, was expanded by a private offering of NIS 35,000 thousand par value of bonds Series C to institutional investors for 89.5% of their par value, reflecting a return of 5.7%.
- On April 18, 2012, Bee Group informed that it had reached an agreement with a franchisee (which operates together with others 24 stores in the non-food segment - hereafter the franchisee) which experiences financial difficulties. Based on the franchise terms with the franchisee and the said agreement, Bee Group will take over the majority of the stores and the inventory in exchange for the debt. Following the agreement and based on the value of the assets that Bee Group will assume, the Company recorded a provision for impairment of trade receivables in the statement of financial position for the year ended December 31, 2011 in the amount of NIS 11.2 million.
- On May 3, 2012, Alon Central Energy LP, a subsidiary of Dor Alon, in which Dor holds a 55% interest and a third party holds a 45% interest, entered into a memorandum of understanding with Chiram Epsilon Ltd. ("Chiram"). Pursuant to the memorandum of understanding, Alon Central Energy LP will invest NIS 75 million in exchange for the issuance by Chiram's of shares reflecting 36.2% of Chiram's outstanding shares following issuance. Chiram holds 36.7% of the outstanding shares of Dalia Power Energy Ltd, which is engaged in the construction of a private power plant with an output 870 megawatts.
- On May 13, 2012, BSRE signed a memorandum of understanding with a third party, pursuant to which the Company agreed to erect a 23,000 square-meter structure on real property it owns in Ra'anana and also to construct a 2,300 square-meter basement (the structure), both of which will be leased to the lessee for 10 years with a renewal option for an additional 5 years for monthly rental fees of NIS 1,660 thousand linked to the CPI. BSRE has undertaken to erect a surrounding structure estimated to cost NIS 200 million and committed to perform, upon request by the lessee to be performed by BSRE, finishing work estimated at a cost of NIS 75 million. If finishing work will be performed by BSRE, BSRE will be entitled to receive an annual payment from the lessee equal to 7.5% of the cost of the finishing work in addition to monthly rental fees.
BSRE has undertaken to finish the construction work and to transfer the building at the end of the final quarter of 2014. BSRE and the lessee have determined acceptable compensation mechanisms. - During the second quarter of 2012, Alon Cellular launched its operations under the brand "YouPhone" and has begun operating and providing services to customers. At the same time, the Company acquired the full ownership of Alon Cellular.
- On May 23, 2012, Midroog rating agency announced that it had assigned a "P-1" rating to commercial paper of up to NIS 170 million nominal value, which may be issued in the future by the Company.
NOTE A: Convenience Translation to Dollars
The convenience translation of New Israeli Shekel (NIS) into U.S. dollars was made at the exchange rate prevailing at March 31, 2012: U.S. $1.00 equals NIS 3.715. The translation was made solely for the convenience of the reader.
Alon Holdings Blue Square- Israel Ltd. (hereinafter: "Alon Holdings") is the leading retail company in the State of Israel and operates in four reporting segments: In its supermarket segment, Alon Holdings, through its 100% subsidiary, Mega Retail Ltd., currently operates 215 supermarkets under different formats, each offering a wide range of food products, "Near Food" products and "Non-Food" products at varying levels of service and pricing. In its "Non-Food" segment, Alon Holdings, through its 100% subsidiary BEE Group Retail Ltd., operates specialist outlets in self operation and franchises and offers a wide range of "Non-Food" products as retailer and wholesaler. In the Commercial and Fueling Sites segment, through its 78.38% subsidiary, which is listed on the Tel Aviv stock exchange ("TASE"), Dor Alon Energy in Israel (1988) Ltd is one of the four largest fuel retail companies in Israel based on the number of petrol stations and a leader in the field of convenience stores. Dor Alon operates a chain of 198 petrol stations and 200 convenience stores in different formats in Israel. In its Real Estate segment, Alon Holdings, through its TASE traded 78.22% subsidiary Blue Square Real Estate Ltd., owns, leases and develops yield generating commercial properties and projects.
Forward-looking statements
This press release contains forward-looking statements within the meaning of safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, plans or projections about our business and our future revenues, expenses and profitability. Forward-looking statements may be, but are not necessarily, identified by the use of forward-looking terminology such as "may," "anticipates," "estimates," "expects," "intends," "plans," "believes," and words and terms of similar substance. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual events, results, performance, circumstance and achievements to be materially different from any future events, results, performance, circumstance and achievements expressed or implied by such forward-looking statements. These risks, uncertaintiesand other factors include, but are not limited to, the following: the effect of the recession in Israel on the sales in our stores and on our profitability; our ability to compete effectively against low-priced supermarkets and other competitors; quarterly fluctuations in our operating results that may cause volatility of our ADS and share price; risks associated with our dependence on a limited number of key suppliers for products that we sell in our stores; the effect of an increase in the minimum wage in Israel on our operating results; the effect of any actions taken by the Israeli Antitrust Authority on our ability to execute our business strategy and on our profitability; the effect of increases in oil, raw material and product prices in recent years; the effects of damage to our reputation or to the reputation of our store brands due to reports in the media or otherwise; and other risks, uncertainties and factors disclosed in our filings with the U.S. Securities and Exchange Commission (SEC), including, but not limited to, risks, uncertainties and factors identified under the heading "Risk Factors" in our annual report on Form 20-F for the year ended December 31, 2011. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except for our ongoing obligations to disclose material information under the applicable securities laws, we undertake no obligation to update the forward-looking information contained in this press release.
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF MARCH 31, 2012
(UNAUDITED)
Convenience
translation
March 31,
December 31, ---------------------------- March 31,
2011 2011 2012 2012
------------ ------------- ------------- -----------
NIS U.S. dollars
------------ ------------- ------------- -----------
In thousands
-------------------------------------------------------
A s s e t s
CURRENT
ASSETS:
Cash and
cash
equivalents 76,451 127,572 110,818 29,830
Investment
in
securities 300,053 297,356 330,950 89,085
Short-term
bank
deposits 103,942 91,977 97,399 26,218
Trade
receivables 1,576,150 1,826,626 1,708,027 459,765
Other
accounts
receivable
including
current
maturities
of loans
receivable 291,790 455,939 578,212 155,643
Derivative
financial
instruments 2,543 - - -
Assets
classified
as held for
sale 3,610 - - -
Income
taxes
receivable 125,789 70,714 129,765 34,930
Inventories 676,590 751,852 784,118 211,068
------------ ------------- ------------- -----------
3,156,918 3,622,036 3,739,289 1,006,539
------------ ------------- ------------- -----------
NON-CURRENT
ASSETS:
Investments
in
associates 202,653 7,270 206,257 55,520
Derivative
financial
instruments 896 87,773 1,312 353
Real estate
inventories 100,035 84,844 99,686 26,833
Payments on
account of
real estate 191,600 168,652 214,199 57,658
Investments
in
securities 33,159 32,083 36,419 9,803
Loans
receivable,
net of
current
maturities 182,654 176,074 140,362 37,783
Property
and
equipment,
net 2,942,487 2,917,719 2,955,655 795,600
Investment
property 576,093 573,907 585,923 157,718
Intangible
assets, net 1,461,070 1,482,750 1,461,774 393,479
Other
long-term
receivables 142,331 113,740 184,371 49,629
Deferred
taxes 104,321 69,240 113,605 30,580
------------ ------------- ------------- -----------
5,937,299 5,714,052 5,999,563 1,614,956
------------ ------------- ------------- -----------
Total
assets 9,094,217 9,336,088 9,738,852 2,621,495
============ ============= ============= ===========
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF MARCH 31, 2012
(UNAUDITED)
Convenience
translation
March 31,
December 31, ---------------------------- March 31,
2011 2011 2012 2012
------------ ------------- ------------- -----------
NIS U.S. dollars
------------------------------------------ -----------
In thousands
-------------------------------------------------------
Liabilities and
shareholders'
equity
CURRENT
LIABILITIES:
Credit and loans
from banks and
others 1,036,928 600,153 982,027 264,341
Current maturities
of debentures and
convertible
debentures 212,726 204,878 212,173 57,112
Current maturities
of long-term loans
from banks 311,642 322,863 270,648 72,853
Trade payables 1,243,914 1,513,644 1,609,005 433,110
Other accounts
payable and accrued
expenses 730,985 917,880 922,031 248,191
Customers' deposits 27,733 28,772 27,692 7,454
Derivative
financial
instruments 2,814 12,103 11,002 2,962
Income taxes
payable 6,311 4,161 5,067 1,364
Provisions 78,266 68,026 70,816 19,062
------------ ----------- ----------- -----------
3,651,319 3,672,480 4,110,461 1,106,449
------------ ----------- ----------- -----------
NON CURRENT
LIABILITIES:
Long-term loans
from banks and others,
net of current
maturities 1,240,487 1,324,824 1,162,182 312,835
Convertible
debentures, net of
current maturities 118,826 118,549 118,671 31,944
Debentures, net of
current maturities 2,034,047 2,188,203 2,296,088 618,059
Other liabilities 264,597 259,851 269,682 72,593
Derivative
financial
instruments 16,701 9,321 13,787 3,711
Liabilities in
respect of employee
benefits, net of
amounts funded 62,245 52,265 60,112 16,181
Deferred taxes *159,769 *116,887 158,773 42,738
------------ ----------- ----------- -----------
3,896,672 4,069,900 4,079,295 1,098,061
------------ ----------- ----------- -----------
Total liabilities 7,547,991 7,742,380 8,189,756 2,204,510
------------ ----------- ----------- -----------
EQUITY:
Equity attributed
to equity holders
of the Company:
Ordinary shares of
NIS 1 par value 79,881 79,835 79,881 21,502
Additional paid-in
capital 1,219,279 1,218,409 1,219,279 328,204
Other reserves (9,672) (19,472) (10,321) (2,778)
Accumulated deficit *(106,434) *(56,280) (112,317) (30,233)
------------ ----------- ----------- -----------
1,183,054 1,222,492 1,176,522 316,695
Non-controlling
interests *363,172 *371,216 372,574 100,290
------------ ----------- ----------- -----------
Total equity 1,546,226 1,593,708 1,549,096 416,985
------------ ----------- ----------- -----------
Total liabilities
and equity 9,094,217 9,336,088 9,738,852 2,621,495
============ =========== =========== ===========
* Retroactive application, see events during the reporting period
ALON HOLDINGS BLUE SQUARE
- ISRAEL LTD.
CONSOLIDATED STATEMENTS OF INCOME
Convenience
translation
for the
three
Three months months
Year ended ended March 31, ended March
December 31, ------------------- 31,
2011 2011 2012 2012
----------- --------- --------- ----------
In thousands (except per share data)
-------------------------------------------
Revenues 15,296,255 3,709,468 3,896,382 1,048,824
Less - government levies (2,813,671) 702,349 717,857 193,232
----------- --------- --------- ----------
Net revenues 12,482,584 3,007,119 3,178,525 855,592
Cost of sales 9,566,876 2,277,642 2,479,901 667,537
----------- --------- --------- ----------
Gross profit 2,915,708 729,477 698,624 188,055
Selling, general and
administrative expenses 2,638,845 637,731 663,050 178,479
----------- --------- --------- ----------
Operating profit before other
gains and losses and changes
in fair value of investment
property 276,863 91,746 35,574 9,576
Other gains 1,358 1,000 - -
Other losses (19,577) (2,909) (172) (46)
Increase in fair value of
investment property, net 41,913 3,055 2,685 723
----------- --------- --------- ----------
Operating profit 300,557 92,892 38,087 10,253
Finance income 156,837 45,001 19,694 5,301
Finance expenses (332,839) (85,742) (62,925) (16,938)
----------- --------- --------- ----------
Finance expenses, net (176,002) (40,740) (43,231) (11,637)
Share in gains (losses) of
associates 5,746 1,213 3,603 970
----------- --------- --------- ----------
Income before taxes on income 130,301 53,365 (1,541) (414)
Taxes on income 46,588 15,691 (4,324) (1,164)
----------- --------- --------- ----------
Net income for the period 83,713 37,674 2,783 750
=========== ========= ========= ==========
Attributable to:
Equity holders of the Company 59,513 29,988 ( 6,345) (1,708)
----------- --------- --------- ----------
Non-controlling interests 24,200 7,686 9,128 2,458
----------- --------- --------- ----------
Earnings per ordinary share
or ADS attributable to equity
holders of the company
Basic 0.90 0.46 (0.10) (0.03)
----------- --------- --------- ----------
Fully diluted 0.79 0.45 (0.10) (0.03)
----------- --------- --------- ----------
Weighted average number of
shares or ADSs used for
computation of earnings per
share:
Basic 65,940 65,903 65,954 65,954
----------- --------- --------- ----------
Fully diluted 66,167 66,138 65,954 65,954
----------- --------- --------- ----------
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2012
(UNAUDITED)
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2012
(UNAUDITED)
Convenience
translation
for the
Three months ended three months
Year ended March 31, ended
December 31, --------------------- March 31,
2011 2011 2012 2012
--------- ---------- --------- ------------
---------------------------------- U.S. dollars
NIS in thousands in thousands
---------------------------------- ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Income before taxes on
income 130,301 53,365 (1,541) (414)
Income tax paid, net (79,368) (19,680) (10,580) (2,848)
Adjusments for cash
generated from operations 576,664 182,339 174,972 47,098
--------- ---------- --------- ------------
Net cash provided by
operating activities 627,597 216,024 162,851 43,836
--------- ---------- --------- ------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and
equipment (261,101) (65,534) (76,805) (20,674)
Purchase of investment
property (55,524) (20,341) (5,275) (1,420)
Purchase of intangible
assets (30,717) (4,993) (16,524) (4,448)
Proceeds from collection
of (investment in)
short-term bank deposits,
net (5,858) 6,107 6,543 1,761
Proceeds from sale of
property and equipment 12,864 11,090 438 118
Proceeds from sale of
investment property 50,600 - - -
Investment in restricted
use deposits (102,603) (87,277) (8,929) (2,403)
Proceeds from sale of
marketable securities 118,957 19,601 65,246 17,563
Investment in marketable
securities (122,646) (21,672) (95,191) (25,623)
Acquisition of
subsidiaries - - - -
Acquisition of equity
accounted investee (36,415) - - -
Grant of loans to jointly
controlled companies (200) (61,733) - -
Grant of loans to
controlling shareholders (144,962) - (23,583) (6,348)
Payments on account of
real estate (9,187) - (10,505) (2,828)
Collection of long-term
loans 22,885 3,027 3,370 907
Interest received 16,552 5,341 5,051 1,360
--------- ---------- --------- ------------
Net cash provided by
(used in) investing
activities (547,355) (216,384) (156,164) (42,035)
--------- ---------- --------- ------------
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2012
(UNAUDITED)
Convenience
translation
for the
Three months ended three months
Year ended March 31, ended
December 31, --------------------- March 31,
2011 2011 2012 2012
--------- ---------- --------- ------------
---------------------------------- U.S. dollars
NIS in thousands in thousands
---------------------------------- ------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Purchase of treasury
shares (4,035) (3,953) - -
Dividends paid (75,000) - - -
Dividend paid to
non-controlling interests (30,669) - - -
Repayment of debentures (174,955) (2,305) (3,907) (1,052)
Transactions with
non-controlling interests
in subsidiary without
loss of control (15,217) (7,927) - -
Issuance of debentures - - 264,242 71,128
Receipt of long-term
loans 213,648 2,547 500 135
Repayment of long-term
loans (382,557) (59,559) (119,803) (32,249)
Repayment of long term
credit from trade
payables (1,750) (435) - -
Short-term credit from
banks and others, net 582,503 137,322 (62,711) (16,881)
Receipt of loans from
interested party - - - -
Proceeds from issue of
shares relating to share
based payments in the
company and a subsidiary 143 124 (682) (183)
Interest paid (222,771) (55,711) (56,880) (15,311)
--------- ---------- --------- ------------
Net cash provided by
(used in) financing
activities (110,660) 10,103 20,759 5,587
--------- ---------- --------- ------------
INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS
AND BANK OVERDRAFTS (30,418) 9,743 27,446 7,388
Translation differences
on cash and cash
equivalents 37 (12) (4) (1)
--------- ---------- --------- ------------
BALANCE OF CASH AND CASH
EQUIVALENTS AND BANK
OVERDRAFTS AT BEGINNING
OF PERIOD 104,131 104,131 73,750 19,852
--------- ---------- --------- ------------
BALANCE OF CASH AND CASH
EQUIVALENTS AND BANK
OVERDRAFTS AT END OF
PERIOD 73,750 113,862 101,192 27,239
========= ========== ========= ============
(Continued - 2)
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2012
(UNAUDITED)
Convenience
translation
for the
Three months ended three months
Year ended March 31, ended
December 31, --------------------- March 31,
2011 2011 2012 2012
--------- ---------- --------- ------------
NIS U.S. dollars
---------------------------------- ------------
in thousands
-----------------------------------------------
Net cash provided by
operating
(a) activities:
Adjustments for:
Depreciation and
amortization 273,746 67,938 69,870 18,808
Increase in fair
value of investment
property, net (41,913) (3,055) (2,685) (723)
Share in gains of
associates (5,309) (777) (3,603) (970)
Share based payment 3,270 1,114 463 125
Loss from sale and
disposal of property
and equipment, net 2,448 (647) 32 9
Provision for
impairment of
property and
equipment, net 7,815 377 189 51
Loss (gain) from
changes in fair
value of derivative
financial
instruments (107,553) (26,197) 7,583 2,041
Linkage differences
on monetary assets,
debentures, loans
and other long term
liabilities 71,465 28,350 442 119
Employee benefit
liability, net 177 773 (2,136) (575)
Decrease (increase)
in value of
investment in
securities, deposits
and long-term
receivables, net 1,190 1,480 (846) (228)
Interest paid, net 184,963 44,460 47,631 12,821
Changes in operating
assets and
liabilities:
Decrease (increase)
in trade receivables
and other accounts 104,743 (323,715) (387,225) (104,233)
Increase in advances
from purchasers of
apartments 102,603 86,092 6,429 1,730
Increase (decrease)
in trade payables
and other accounts
payable (10,198) 380,750 557,569 150,086
Investment in real
estate inventories (5,637) (1,983) (823) (222)
Payments on account
of real estate
inventories (8,852) (1,065) (10,390) (2,797)
Decrease (increase)
in inventories 3,706 (71,556) (107,528) (28,944)
--------- ---------- --------- ------------
576,664 182,339 174,972 47,098
========= ========== ========= ============
(Concluded - 3)
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2012
(UNAUDITED)
Convenience
translation
for the
Three months ended three months
Year ended March 31, ended
December 31, --------------------- March 31,
2011 2011 2012 2012
--------- ---------- --------- ------------
NIS U.S. dollars
---------------------------------- ------------
in thousands
-----------------------------------------------
(b) Supplementary
information on
investing and
financing
activities not
involving cash
flows:
Issue of shares
upon conversion
of convertible
debentures 896 - - -
========= ========== ========= ============
Purchase of
property and
equipment on
credit 10,769 5,870 4,930 1,327
========= ========== ========= ============
Dividends
declared to
non-controlling
interests - 15,760 - -
========= ========== ========= ============
Advances from
customers
deposited in
restricted use
deposit - 21,357 1,524 410
========= ========== ========= ============
Issue of shares
against
acquisition of
shares in
subsidiary 154,433 - - -
========= ========== ========= ============
Convenience
March 31, translation
December 31, ------------------- March 31,
2011 2011 2012 2012
-------------- -------- --------- -----------
NIS U.S. dollars
--------------------------------- ------------
In thousands
-----------------------------------------------
Alon Holdings
-----------------------------------------------
Cash and cash
equivalence 1,909 1,583 1,942 523
Investment in securities 64,657 62,391 66,345 17,859
----------- -------- --------- -----------
Total assets 66,566 63,974 68,287 18,382
----------- -------- --------- -----------
Short term and Long-term
debt:
Short term loans from
banks 195,764 69,428 167,533 45,096
Long term loans from
banks 171,555 185,626 171,569 46,183
Debentures 232,341 312,231 233,286 62,796
----------- -------- --------- -----------
Total long-term debt 599,660 567,285 572,388 154,075
----------- -------- --------- -----------
Equity:
Equity attributable to
equity holders of the
company: 1,183,054 1,222,134 1,176,522 316,695
----------- ---------- ---------- -----------
Total debt, net (1,716,148) (1,725,445) (1,680,623) (452,388)
=========== ========== ========== ===========
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
RECONCILIATION BETWEEN NET INCOME FOR THE PERIOD AND EBITDA
FOR THE THREE MONTH PERIOD ENDED MARCH31, 2012
(UNAUDITED)
Convenience
translation
Three months for the three
Year ended ended March 31, months ended
December 31, ------------------ March 31,
2011 2011 2012 2012
-------- ------- --------- -------------
U.S. dollars
NIS in thousands in thousands
---------------------------- -------------
Net income for the period 83,713 37,674 2,783 750
Taxes on income 46,588 15,691 (4,324) (1,164)
Share in gains of
associates ( 5,746) (1,213) (3,603) (970)
Finance expenses, net 176,002 40,740 43,231 11,637
Other losses, net 18,219 1,909 172 46
Changes in fair value of
investment property (41,913) (3,055) (2,685) (723)
Depreciation and
amortization 273,746 67,938 69,870 18,808
Share based payment 3,270 1,114 463 125
-------- ------- --------- -------------
EBITDA 553,879 160,798 105,907 28,509
-------- ------- --------- -------------
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2012
(UNAUDITED)
Note 1 - Segment reporting
The Company includes segment information according to IFRS 8. The reporting is based on the Company's organizational structure, the internal reporting, the allocation of resources and the decision-making process. The Company presents four segments: Supermarkets, Commercial and fueling sites, Non-food Retail and Wholesale and Real estate.
The Company's four operating segments consist of the following:
- Supermarkets - The Company operates the second largest food retail chain in Israel. Through its subsidiary, Mega Retail Ltd. ("Mega Retail"), which operates Supermarket branches, the Company offers a wide range of food and beverage products and "Non-food" items, such as houseware, toys, small electrical appliances, computers and computer accessories, entertainment and leisure products and textile products and "Near-Food" products, such as health and beauty aids, products for infants, cosmetics and hygiene products. As of March 31, 2012, Mega Retail operated 215 supermarkets. This segment also includes properties owned through Blue Square Real Estate ("BSRE"), in connection with the supermarket operation of Mega Retail's stores (including warehouses and offices).
- Commercial and fueling sites - Through its subsidiary Dor-Alon the Company is engaged in the development, construction and operation of vehicle fueling stations, adjacent commercial centers and independent convenience stores, marketing of fuel products and other products through the fueling stations and convenience stores and direct marketing of distillates to customers. The commercial and fueling sites segment is presented according to the published financial statements of Dor-Alon, with reclassification of credit card fees and with the amortization of the excess of cost arising at the time of acquisition allocated to the reconciliation between the operating profit of the segment and the total operating profit.
- Non-food (Retail and Wholesale) -Through its subsidiary, BEE Group Retail Ltd. ("BEE Group"), the Company is engaged in non-food retail and wholesale activities. As of March 31, 2012, BEE Group operated 249 non-food retail outlets, mostly through franchisees, with specialties in houseware and home textile, toys, leisure, and infant.
- Real Estate - Through its subsidiary BSRE the Company is engaged in generating yield from commercial centers, logistics centers and offices, land for the purpose of capital appreciation and deriving long-term yield as well as in the development of the "Wholesale Market" residency project.
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2012
(UNAUDITED)
Note 1 - Segment reporting (continued)
Three months ended March 31, 2012
---------------------------------------------------------------------
Real Commercial and Total
Supermarkets Non-food estate fueling sites Adjustments consolidated
------------ -------- ------ -------------- ----------- ------------
NIS in thousands
---------------------------------------------------------------------
Net segment
sales 1,626,018 114,162 8,056 1,430,289 - 3,178,525
Inter
segment
sales - 12,127 - 8,677 (20,804) -
Depreciation
and
amortization 41,947 2,652 - 23,642 1,629 69,870
Operating
profit
(loss)
before other
gains and
losses net
and changes
in fair
value of
investment
property 17,204 4,657 2,176 33,198 (14,819) 42,416
Segment
profit 16,932 4,530 4,862 33,424 (14,819) 44,929
Unallocated
corporate
expenses (6,842)
Financial
expenses,
net (43,231)
Share in
gains of
associates,
net 3,603
--------
Loss before
taxes on
income (1,541)
--------
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2012
(UNAUDITED)
Note 1 - Segment reporting (continued)
Three months ended March 31, 2011
--------------------------------------------------------------------------
Real Commercial and Total
Supermarkets Non-food estate fueling sites Adjustments consolidated
------------ -------- ------ -------------- ----------- ------------
NIS in thousands
--------------------------------------------------------------------------
Net segment
sales 1,636,535 116,072 6,272 1,248,240 - 3,007,119
Inter
segment
sales - 9,816 - 7,483 (17,299) -
Depreciation
and
amortization 39,749 3,507 - 22,242 2,440 67,938
Operating
profit
(loss)
before other
gains and
losses net
and changes
in fair
value of
investment
property 49,572 2,739 2,513 50,329 (7,464) 97,689
Segment
profit 49,572 847 5,569 50,329 (7,482) 98,835
Unallocated
corporate
expenses (5,943)
Financial
expenses,
net (40,740)
Share in
gains of
associates,
net 1,213
--------
Income
before taxes
on income 53,365
========
Three months ended March 31, 2011
--------------------------------------------------------------------------
Real Commercial and Total
Supermarkets Non-food estate fueling sites Adjustments consolidated
------------ -------- ------ -------------- ----------- ------------
NIS in thousands
--------------------------------------------------------------------------
Net segment
sales 6,723,845 425,853 31,021 5,301,865 - 12,482,584
Inter
segment
sales - 31,810 - 36,087 (67,897) -
Depreciation
and
amortization 159,601 12,011 - 96,130 6,004 273,746
Operating
profit
(loss)
before other
gains and
losses net
and changes
in fair
value of
investment
property 177,346 (34,915) 15,395 173,681 (31,933) 299,574
Segment
profit 169,697 (45,382) 57,307 173,578 (31,933) 323,267
Unallocated
corporate
expenses (22,710)
Financial
expenses,
net (176,002)
Share in
gains of
associates,
net 5,746
Income
before taxes
on income 130,301
Three months ended March 31, 2012
--------------------------------------------------------------------------
Real Commercial and Total
Supermarkets Non-food estate fueling sites Adjustments consolidated
------------ -------- ------ -------------- ----------- ------------
NIS in thousands
--------------------------------------------------------------------------
Net segment
sales 437,690 30,729 2,169 385,004 - 855,592
Inter
segment
sales - 3,264 - 2,336 (5,600) -
Depreciation
and
amortization 11,291 714 - 6,364 439 18,808
Operating
profit
(loss)
before other
gains and
losses net
and changes
in fair
value of
investment
property 4,631 1,254 586 8,936 (3,989) 11,418
Segment
profit 4,558 1,220 1,309 8,997 (3,989) 12,095
Unallocated
corporate
expenses (1,842)
Financial
expenses,
net (11,637)
Share in
gains of
associates,
net 970
--------
Income
before taxes
on income (414)
========
1. The Company operates in four segments: Supermarkets, Commercial and fueling sites, Non Food retail and wholesale and Real Estate. Segmental information is included in this report below.
2. Use of financial measures that are not in accordance with Generally Accepted Accounting Principles
EBITDA is a measure that is not in accordance with Generally Accepted Accounting Principles (Non-GAAP) and is defined as income before financial income (expenses) net, other gains (losses) net, changes in fair value of investment property, taxes, depreciation and amortization. It is an accepted ratio in the retail industry. It is presented as an additional performance measure, since it enables comparisons of operating performances between periods and companies while neutralizing potential differences resulting from changes in capital structures, taxes, age of property and equipment and its related depreciation expenses. EBITDA, however, should not be related to as a single measure or as an alternative to operating income, another performance indicator and to cash flow information, which are prepared using Generally Accepted Accounting Principles (GAAP) as indicators of profit or liquidity. EBITDA does not take the costs of servicing debt and other liabilities into account, including capital expenditures and therefore it does not necessarily indicate the amounts that may be available to the use of the company and in addition EBITDA should not be compared to other indicators with similar names reported by other companies because of differences in the calculation of these indicators. See the reconciliation between our net income and EBITDA which is presented in this press release.
Contact:
Alon Holdings Blue Square-Israel Ltd.
Dror Moran, CFO
Toll-free telephone from U.S. and Canada: 888-572-4698
Telephone from rest of world: +972-3-928-2220
Fax: +972-3-928-2299
Email: [email protected]
SOURCE Alon Holdings Blue Square-Israel Ltd
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