Alon Blue Square Israel Ltd. (NYSE:BSI) Announces The Financial Results For The First Quarter Of 2015

May 27, 2015, 16:01 ET from Alon Holdings Blue Square - Israel Ltd.

YAKUM, Israel, May 27, 2015 /PRNewswire/ --

  • The Company's revenues, net of government fess, in the first quarter of 2015 amounted to NIS 2.5 billion compared to NIS 2.7 billion in the first quarter of 2014. The decrease in revenues between periods mainly derived from a decrease in fuel prices in the Fueling and Commercial sites segment.
  • Operating profit in the first quarter of 2015 amounted to NIS 1.4 million compared to a loss of NIS 74.9 million in the fourth quarter of 2014 and a profit of NIS 10.5 million in the first quarter of 2014.
  • Cash flow from operating activities amounted to NIS 171.1 million compared to NIS 140.9 million in the corresponding quarter last year and NIS 27.5 million in the fourth quarter of 2014. The main increase in cash flows derived from changes in the working capital in the amount of NIS 33.7 million.
  • Adjusted EBITDA amounted to NIS 81.3 million in the first quarter of 2015 compared to NIS 84.8 million in the first quarter of 2014 and NIS 68.8 million in the fourth quarter of 2014.
  • In the Fueling and Commercial sites segment- in the first quarter of 2015, the results of this segment amounted to NIS 22.9 million compared to NIS 27.1 million in the first quarter of 2014. This quarter included higher inventory losses by more than NIS 9 million following the decrease in fuel prices compared to the corresponding quarter last year.
  • In the Supermarkets segment- in the first quarter of 2015, the results of this segment amounted to a loss of NIS 24.6 million compared to a loss of NIS 29.4 million (including a profit from asset realization of NIS 10 million) in the fourth quarter of 2014, the decrease in loss derived from an increase in sales of YOU chain. In the corresponding quarter last year, the results of the segment amounted to a loss of NIS 6.5 million. The increase in the loss compared to the corresponding quarter derived from a decrease in the gross profit margin following the completion of YOU chain deployment.
  • In the Real Estate segment – in the first quarter of 2015, the results of this segment amounted to NIS 26.1 million compared to NIS 44.0 million in the fourth quarter of 2014 and NIS 24.0 million in the first quarter of 2014. The fourth quarter of 2014 included higher revaluation profits due to lowering the discounting interest.
  • In the Houseware and textile segment – in the first quarter of 2015, results amounted to NIS 7.3 million compared to NIS 5.8 million in the first quarter of 2014. The increase in the results mainly derived from the Passover holiday timing.
  • Others segment
    • Diners – the Company's share in the net income of Diners amounts to NIS 4.4 million in the first quarter of 2015 compared to NIS 5.9 million in the corresponding quarter last year.
    • You Phone – a decrease in operating loss in the period at the rate of 62% compared to the corresponding period last year.
  • The net aggregate loss of the Company in the first quarter of 2015 amounted to NIS 30.5 million compared to a net loss of NIS 339.1 million in the fourth quarter of 2014 (which included amortization of tax asset in amount of NIS 141 million) and a loss of NIS 21.8 million in the first quarter of 2014.  

Consolidated profit and loss


2015

2014

Consolidated profit and loss, NIS in millions

Q1

Q4

Q3

Q2

Q1

Revenues from sales, net

2,482

2,572

2,887.5

2,886.9

2,714.9

Gross profit

591.9

523.7

650.3

644.2

601.8

Operating profit (loss) before financing

1.4

(74.9)

80.1

40.6

10.5

Net income (loss)

(30.5)

(349.1)

12.0

(19.1)

(21.8)

Adjusted EBITDA

81.3

68.8

136.5

110.4

84.8

Segment results:


2015

2014

Segment results, NIS in millions 

Q1

Q4

Q3

Q2

Q1

Fueling and Commercial sites

22.9

30.6

44.4

38.4

27.1

Supermarkets *

(24.6)

(29.4)

59.5

15.8

(6.6)

Houseware and textile 

7.3

1.0

3.0

1.7

5.8

Real Estate

26.1

44.0

12.1

22.5

24.0








* The third quarter of 2014 included a gain of NIS 28 million from realizing part of the logistic center complex in Rishon Lezion. The fourth quarter of 2014 included a gain of NIS 10 from realization of assets.  

Results for the first quarter of 20151

Gross revenues

Revenues (including government levies) in the first quarter of 2015 amounted to NIS 3,230.2 million (U.S. $811.6 million) as compared to revenues of NIS 3,448.3 million in the comparable quarter last year, a decrease of 6.3% which mainly derives from a decrease in fuel prices between periods resulting in a decline in Dor Alon sales.

Revenues from sales, net

Revenues of the Fueling and Commercial sites segment – amounted in this quarter to NIS 967.3 million (U.S. $243.0 million) as compared to NIS 1,194.2 million in the corresponding quarter last year, a decrease of 19.0%. The main decrease was due to decrease in fuel prices and was partly offset by the increase in fuel quantities sold.

Revenues of the Supermarkets segment 2– amounted in this quarter to NIS 1,369.3 million (U.S. $344.0 million) as compared to NIS 1,314.1 million in the corresponding quarter last year, an increase of 4.2%. The increase derives mainly from increase in YOU stores and the Passover holiday timing that occurred this year at the beginning of April while last year it occurred in the middle of April, increase in the sales of SSS stores in this quarter compared to the corresponding quarter last year which amounted to 3.2%.

Revenues of the Houseware and textile segment – amounted in this quarter to NIS 89.8 million (U.S. $22.6 million) compared to NIS 80.4 million in the corresponding quarter last year, an increase of 11.7%. The increase in revenues derives from the Passover holiday timing that occurred this year at the beginning of April while last year it occurred in the middle of April.   

Revenues of the Real Estate segment – increase in rental fees of 75.7% in the first quarter of 2014 from NIS 10.3 million to NIS 18.1 million (U.S. $4.5 million) in this quarter. The increase in revenues in this quarter mainly derives from increase in rented spaces to external parties compared to the corresponding period last year.

Gross profit in the first quarter of 2015 amounted to NIS 591.9 million (U.S. $148.7 million) (23.8% of revenues) as compared to gross profit of NIS 601.8 million (22.2% of revenues) in the comparable quarter last year, a decrease of 1.6%. The decrease in the gross profit compared to the corresponding quarter last year was mainly due to the decrease in gross profit in the Fueling and Commercial sites segment.

In the Fueling and Commercial sites segment, gross profit amounted to NIS 186.4 million (U.S. $46.8 million), (19.3% of revenues) compared to NIS 190.2 million in the comparable quarter last year (15.9% of revenues), a decrease of 2%. The main decrease in the gross profit mainly derived from higher inventory losses in this quarter compared to the corresponding quarter last year of NIS 9 million. Said decrease was partly offset by an increase in fuel quantities sold and sales of convenience stores.

In the Supermarkets segment, gross profit amounted to NIS 335.6 million (U.S. $84.3 million), (24.5% of revenues) compared to NIS 338.3 million in the first quarter of 2014 (25.7% of revenues), a decrease of 0.8% deriving from an increase in sales of the YOU discount format and from price reduction.

In the Houseware and textile segment, gross profit amounted to NIS 48.9 million (U.S. $12.3 million), (59.4% of revenues) compared to NIS 44.2 million in the first quarter of 2014 (62.3% of revenues), an increase of 10.6% which was derived from the increase in gross profit rate in the houseware segment and was partly offset from a decrease in gross profit rate in the textile segment.  

Selling, general and administrative expenses in the first quarter of 2015 amounted to NIS 598.7 million (U.S. $150.4 million) (24.1% of revenues), compared to expenses of NIS 602.4 million (22.2% of revenues) in the comparable quarter last year. 

In the Fueling and Commercial sites segment, these expenses amounted to NIS 165.7 million (U.S. $41.6 million) compared to NIS 163.4 million in the first quarter of 2014, an increase of 1.4% deriving from opening new sites.

In the Supermarkets segment, selling, general and administrative expenses amounted to NIS 356.1 million (U.S. $89.5 million) compared to expenses of NIS 334.5 million in the first quarter of 2014, an increase of 6.5% deriving mainly from launching YOU chain and increase in real expenses.

In the Houseware and textile segment, these expenses amounted to NIS 41.4 million (U.S. $10.4 million) compared to NIS 38.4 million in the first quarter of 2014, an increase  of 7.8% in expenses deriving mainly from expanding both areas of activity and the effect of the holiday timing.

In the Real Estate segment, these expenses amounted to NIS 6.3 million (U.S. $1.6 million) compared to NIS 5.2 million in the first quarter of 2014.

Increase in fair value of investment property in this quarter, the Company recorded a profit in the amount of NIS 14.8 million (U.S. $3.7 million) compared to a profit of NIS 10.5 million in the corresponding period last year. 

Other expenses, net other expenses in this quarter amounted to NIS 10.8 million (U.S. $2.7 million) compared to other expenses of NIS 8.7 million in the first quarter of 2014.

Share in gains of associates in this quarter amounted to NIS 4.2 million (U.S. $1.1 million) compared to NIS 9.3 million in the corresponding quarter last year.

Operating loss before financing amounted to NIS 1.4 million (U.S. $0.4 million) (0.1% of revenues) in this quarter as compared to operating profit of NIS 10.5 million (0.4% of revenues) in the first quarter of 2014. The decrease derived mainly from the Supermarkets segment.  

In the Fueling and Commercial sites segment, operating profit in this quarter amounted to NIS 22.9 million (U.S. $5.8 million) (2.4% of revenues) as compared to operating profit of NIS 27.1 million in the first quarter of 2014, a decrease of 15.5%. The main decrease in operating profit derived mainly from decrease in revenues.

In the Supermarkets segment, operating loss in this quarter amounted to NIS 25.0 million (U.S. $6.3 million) (1.8% of revenues) as compared to operating loss of NIS 6.5 million in the first quarter of 2014. The increase in operating loss derived from erosion of gross profit and increase in selling, administrative and general expenses.

In the Houseware and textile segment, operating profit in this quarter amounted to NIS 7.3 million (U.S. $1.8 million) (8.9% of revenues) as compared to operating profit of NIS 5.8 million in the first quarter of 2014. The increase in operating profit derives from increase in sales, gross profit and was partly offset from an increase in selling, general and administrative expenses.

In the Real Estate segment, operating profit in this quarter amounted to NIS 26.1 million (U.S. $6.6 million) (144.4% of revenues) as compared to operating profit of NIS 24.0 million in the first quarter of 2014, an increase of 8.8%, which mainly derives from an increase in rental income.

Finance costs, net in this quarter amounted to NIS 5.9 million (U.S. $1.5 million) as compared to net finance costs of NIS 32.7 million in the first quarter of 2014. The decrease in finance costs, net derives mainly from decrease in CPI between the periods.

Taxes on income tax expenses in this quarter amounted to NIS 26.0 million (U.S. $6.5 million) as compared to a tax benefit of NIS 3.4 million in the first quarter of 2014.

Net loss in this quarter amounted to NIS 30.5 million (U.S. $7.7 million) compared to a net loss of NIS 21.9 million in the corresponding quarter last year (which includes loss from continued operations of NIS 18.8 million and a loss from discontinued operations of NIS 3.1 million) in the first quarter of 2014. The loss of this quarter attributed to the Company's shareholders amounted to NIS 50.7 million (U.S. $12.7 million) or NIS 0.77 per share (U.S. $0.19) and the income attributed to non-controlling interests amounted to NIS 20.1 million (U.S. $5.1 million).

Cash flows for the first quarter of 2015

Cash flows from operating activities: Net cash flow provided by operating activities amounted to NIS 171.1 million (U.S. $43.0 million) in the first quarter of 2015 compared to net cash flow provided by operating activities of NIS 140.9 million in the comparable quarter last year. The main increase in cash flow provided by operating activities in this quarter compared to the corresponding quarter last year derives from changes in working capital in the amount of NIS 33.7 million (U.S. $8.5 million), which was offset from an increase in operating loss of NIS 7.4 million (U.S. $ 1.9 million) and from taxes paid in the amount of NIS 11.3 million (U.S. $2.3 million).

Cash flows used in investing activities: Net cash flows provided by investing activities amounted to NIS 131.7 million (U.S. $33.1 million) in this quarter as compared to net cash flows used in investing activities of NIS 113.7 million in the comparable quarter last year. Cash flows provided by investing activities in this quarter mainly included the proceeds from realization of property of NIS 85.2 million (U.S. $21.4 million), repayment of loans granted to interested parties and others of NIS 49.1 million (U.S. $ 12.3 million) and proceeds from realization of marketable securities, net, in the amount of NIS 67.9 million (U.S. $ 17.1 million)  offset by the purchase of investment property, property and equipment and intangible assets of total NIS 52.2 million (U.S. $13.1 million). In the first quarter of 2014 the cash flows used in investing activities mainly included the purchase of investment property, property and equipment, and intangible assets of NIS 81.6 million, grant of long term loans of NIS 46.5 million, net of proceeds from marketable securities in the amount of NIS 12.0 million, and interest received of NIS 5.4 million.

Cash flows used in financing activities: Net cash flows used in financing activities amounted to NIS 44.6 million (U.S. $11.2 million) in this quarter as compared to net cash flows used in financing activities of NIS 2.7 million in the corresponding quarter last year. The cash flows used in financing activities this quarter mainly included repayment of long term loans of NIS 67.9 million (U.S. $17.1 million), repayment of commercial papers of NIS 17.2 million (U.S. $4.4 million), decrease in short term credit of NIS 106.8 million (U.S. $26.8 million) and interest payments of NIS 33.3 million (U.S. $8.4 million),  and were offset by receiving long term loans of NIS 95.0 million (U.S. $23.9 million), purchase of shares in subsidiaries by non- controlling interest in the amount of NIS 88 million (U.S. $22.1 million). The net cash flows used in financing activities in the first quarter of 2014 included mainly repayment of long term loans of NIS 39.1 million, interest payments of NIS 41.8 million and a payment of dividend to non-controlling interest of NIS 40.3 million, and was offset by receipt of long term loan of NIS 100.0 million and increase in short term bank credit of NIS 20.8 million, net.

Additional Information

Adjusted EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization)3
In the first quarter of 2015 adjusted EBITDA was NIS 81.3 million (U.S. $20.4 million) (3.3% of revenues) compared to NIS 84.8 million (3.1% of revenues) in the first quarter of 2014.

Events during the reporting period

Fueling and Commercial sites segment

As of March 31, 2015, Dor Alon operated 212 fueling stations and 219 convenience stores in various formats.

Supermarkets segment

a.         As of March 31, 2015, Mega operated 192 supermarkets under different formats.

b.         As of March 31, 2015, the Company operated branches in a total area of 292,000 sq.m. In the first quarter of 2015, 5 branches with a total area of 6,000 sq.m were closed and commercial spaces in branches at a total area of 5,000 sq.m were reduced.

Sales per square meter in the Supermarkets segment in the first quarter of 2015 amounted to NIS 4,746 (U.S. $1,192) compared to NIS 4,312 in the corresponding quarter last year.

Houseware and textile segment

As of March 31, 2015, the Company operates 113 stores (of which 11 franchised) according to the following breakdown: Na'aman – 65 stores, Vardinon – 48 stores.

Real Estate segment

a.         On March 16, 2015, BSRE declared a dividend distribution of NIS 30 million that was paid on April 15, 2015. The Company's share was NIS 19.1 million (U.S. $ 4.9 million). 

b.         Wholesale market complex

Sale agreements with apartment purchasers

On or about the date of issuing the report, the residence company entered into commitment for 699 sale agreements with a scope of NIS 1,760 million (including VAT) and received advances of NIS 1,210 million (including VAT). In addition, with respect to 15 additional units, purchase requests were signed which are in various stages of commercial and/or legal negotiations where some of them may develop into signing sales agreements.  

Commercial spaces in the mall

As of March 31, 2015, lease agreements were signed or are to be signed for 61% of the commercial spaces.

c.         Givon Parking Lot – Tel Aviv

The parking lot was established by BSRE and a third party via a jointly controlled company and it includes 1,000 parking spaces. The parking lot was opened to the public in April 2015. The development of the square is scheduled to be completed in the second quarter of 2015.

General

1 .Sale of BSRE shares

a.       On February 8, 2015, the Company sold 5% of BSRE shares for NIS 72.3 million. After the sale the Company held 64.71% of BSRE share capital.

b.      On February 26, 2015, the Company sold 1% of BSRE shares for NIS 15.4 million. After the sale the Company holds 63.71% of BSRE share capital. The sale was carried out so as to increase the public holding in the share as defined in the stock exchange directive, over 35% on the next examination date effective February 28, 2015 and by that increase the weight of BSRE share according to indicators calculated by the stock exchange.

2. On March 10, 2015, Midroog ratified the A3 rating with negative outlook of series C bonds and lowered to P2 the rating of the Company's commercial papers.

3. In addition to the measures included in the Plan, the Company has committed to provide additional funding to support Mega in an aggregate amount not to exceed NIS 240 million to assist Mega Retail if peak temporary liquidity needs arise and if the disposal of the operations of stores is not effectuated in accordance with the schedule provided in the Plan.

Subsequent events  

a.         On April 1, 2015, Midroog lowered the rating of the Company's series C bonds from A3 to Baa1 and put the rating under review with negative –neutral implications. In addition, the rating of the Company's commercial papers remained P2 under review.

b.         On May 20, 2015, Midroog lowered the rating from Baa1 to Baa2 and left the rating under review with uncertain implications.

c.         In May 2015, the Company completed the repayment of the commercial papers.

d.         On May 20, 2015, BSRE declared a dividend distribution of NIS 30 million that will be paid on June 11, 2015.

e.         On May 27, 2015, Dor Alon completed the sale of a part of its treasury shares in amount of NIS 50.4 million. As a result, the Company's share in Dor Alon decreased to 71.17%.

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, 2015: U.S. $1.00 equals NIS 3.98. The translation was made solely for the convenience of the reader.

Alon Blue Square Israel Ltd. (hereinafter: "Alon Blue Square") operates in four reportable operating segments and is the largest retail company in the State of Israel. In the Fueling and Commercial Sites segment, Alon Blue Square through its 71.17% 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 operating a chain of 212 petrol stations and 219 convenience stores in different formats in Israel. In its supermarket segment, Alon Blue Square, as a pioneer in the modern food retail, through its 100% subsidiary, Mega Retail Ltd., currently operates 192 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 "Houseware and textile" segment, Alon Blue Square, through its TASE traded 77.51% subsidiary, Na'aman Group (NV) Ltd. operates specialist outlets in self-operation and franchises and offers a wide range of "Non-Food" products as retailer and wholesaler. In the Real Estate segment, Alon Blue Square, through its TASE traded 63.71% subsidiary Blue Square Real Estate Ltd., owns, leases and develops income producing commercial properties and projects. In addition, Alon Blue Square through its 100% subsidiary, Alon Cellular Ltd, operates an MVNO network in Israel, through Diners Club Israel Ltd., an associate held at 49%, which operates in the sector of issuance and clearance of YOU credit cards to the customer club members of the group and through Dr. Baby Marketing and Distribution 888 Ltd.  100 % held subsidiary as a retailer and wholesaler in the baby products sector. 

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, 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, uncertainties and other factors include, but are not limited to, the following: the effect of the economic conditions in Israel on the sales in our stores and of our products and on our profitability; our ability to compete effectively against low-priced supermarkets, large fuel companies and our other competitors; enactment of new laws and regulations, including the enactment of recommendations of governmental appointed committees and regulations with respect to the procurement of petroleum products by fuel companies and the price of petroleum products that are subject to regulation; quarterly fluctuations in our operating results that may cause volatility of our ADS and share price; fluctuations in the price of petroleum products and increases in excise tax rates imposed on the sale of petroleum products in Israel; 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; government policies with respect to residential building may have a negative impact on our operations in residential building, 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, 2014.  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 BLUE SQUARE ISRAEL LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF MARCH 31, 2015
(UNAUDITED)






Convenience
translation



December 31,

March 31,

March 31,



2014

2014

2015

2015



NIS

U.S. dollars



In thousands

A  s  s  e  t  s












CURRENT ASSETS:






Cash and cash equivalents


290,102

343,376

544,111

136,711

Investment in securities


362,827

487,993

336,703

84,599

Short-term bank deposits


94,307

94,376

99,587

25,022

Trade receivables


1,030,367

1,236,219

1,096,757

275,567

Other accounts  receivable including current maturities of loans receivable


430,707

571,999

464,316

116,662

Derivative financial instruments


395

777

2,156

542

Income taxes receivable


16,020

23,487

14,225

3,574

Inventories


511,661

652,992

550,184

138,237



2,736,386

3,411,219

3,108,039

780,914







NON-CURRENT ASSETS:






Investments accounted for using equity method


977,028

978,888

967,050

242,977

Derivative financial instruments


4,698

6,169

4,797

1,205

Real estate inventories


126,012

109,026

130,601

32,814

Investments in securities


59,283

63,401

59,798

15,025

Loans receivable, net of current maturities


135,171

143,316

116,553

29,285

Property and equipment, net


2,322,036

2,523,621

2,299,454

577,752

Investment property


982,619

810,148

1,014,368

254,866

Intangible assets, net


1,140,343

1,191,529

1,135,738

285,361

Other long-term receivables


52,740

30,501

50,825

12,770

Deferred taxes


27,844

189,927

29,199

7,336



5,827,774

6,046,526

5,808,383

1,459,391

Total assets


8,564,160

9,457,745

8,916,422

2,240,305







 

 

ALON BLUE SQUARE ISRAEL LTD.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF MARCH 31, 2015

 (UNAUDITED)







Convenience
translation




December 31,

March 31,

March 31,




2014

2014

2015

2015




NIS

U.S. dollars




In thousands


Liabilities and shareholders' equity














CURRENT LIABILITIES:







Credit and loans from banks and others


774,626

843,200

646,030

162,319


Current maturities of debentures and
convertible debentures


466,935

527,933

460,145

115,614


Current maturities of long-term loans from banks


283,342

269,915

297,741

74,809


Trade payables


1,195,822

1,400,109

1,422,589

357,434


Other accounts payable and accrued expenses


723,274

875,091

943,551

237,073


Customers' deposits


28,212

27,947

28,042

7,046


Derivative financial instruments


1,060

5,907

2,065

519


Income taxes payable


24,393

6,929

12,996

3,265


Provisions


67,697

50,042

51,462

12,930




3,565,361

4,007,073

3,864,621

971,009









NON CURRENT LIABILITIES:







Long-term loans from banks and others, net of current maturities


1,414,607

1,301,186

1,420,851

356,998


Convertible debentures, net of current maturities


30,738

60,862

30,078

7,557


Debentures, net of current maturities


2,011,999

2,277,830

1,987,323

499,327


Other liabilities


106,267

125,673

109,678

27,557


Derivative financial instruments


1,931

2,334

4,049

1,017


Liabilities in respect of employee benefits, net of amounts funded


58,716

58,219

60,560

15,216


Deferred taxes


232,752

195,326

251,139

63,100




3,857,010

4,021,430

3,863,678

970,772


Total liabilities


7,422,371

8,028,503

7,728,299

1,941,781









EQUITY:














Ordinary shares of NIS 1 par value


79,881

79,881

79,881

20,071


Additional paid-in capital


1,219,279

1,219,279

1,219,279

306,352


Other reserves


76,661

36,497

127,858

32,125


Accumulated deficit


(711,122)

(310,848)

(762,276)

(191,527)




664,699

1,024,809

664,742

167,021


     Non-controlling interests


477,090

404,433

523,381

131,503


Total equity


1,141,789

1,429,242

1,188,123

298,524


Total liabilities and equity


8,564,160

9,457,745

8,916,422

2,240,305












 

 

ALON BLUE SQUARE ISRAEL LTD.
CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2015

(UNAUDITED)







Convenience





translation for



Year  ended

Three months

the three months



December 31,

ended   March 31,

ended March 31,



2014

2014

2015

2015



NIS

U.S. dollars



In thousands (except per share data)

Revenues


14,048,034

3,448,418

3,230,190

811,606

Less – government levies


2,987,077

733,547

747,992

187,938

Net revenues


11,060,957

2,714,871

2,482,198

623,668

Cost of sales


8,640,992

2,113,046

1,890,310

474,951

Gross profit


2,419,965

601,825

591,888

148,717

Selling, general and administrative expenses


2,459,701

602,432

598,700

150,428

Other gains


95,036

4,056

1,414

355

Other losses


(87,344)

(12,797)

(12,171)

(3,057)

Increase in fair value of investment property, net


50,258

10,551

14,771

3,711

Share in gains of associates


37,997

9,303

4,224

1,061

Operating  profit


56,211

10,506

1,426

359

Finance income


61,791

16,086

26,027

6,539

Finance expenses


(273,043)

(48,817)

(31,957)

(8,029)

Finance expenses, net


(211,252)

(32,731)

(5,930)

(1,490)

Loss  before taxes on income


155,041

22,225

4,504

1,131

Taxes on income (tax benefit)


219,855

(3,434)

26,036

6,542







Loss from continued operations


374,896

18,791

30,540

7,673

Loss from discontinued operation


3,065

3,065

-

-



377,961

21,856

30,540

7,673

Attributable to:






Equity holders of the Company


(431,778)

(31,237)

(50,662)

(12,729)

Non-controlling interests


53,817

9,381

20,122

5,056







Profit (loss) per ordinary share or ADS attributable to equity holders of the company






     Basic and fully diluted






     Continuing operations


(6.50)

(0.42)

(0.77)

(0.19)

     Discontinued operations


(0.05)

(0.05)

-

-



(6.55)

(0.47)

(0.77)

(0.19)

Weighted average number of shares or ADSs used for
computation of earnings per share (NIS in thousands):






     Basic and fully diluted


65,954

65,954

65,954

65,954







 

 

ALON BLUE SQUARE ISRAEL LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2015

 (UNAUDITED)







Convenience






translation



Year ended

Three months ended

for the three months
ended



December 31,

March 31,

March 31,



2014

2014

2015

2015



NIS

U.S. dollars



In thousands

CASH FLOWS FROM OPERATING ACTIVITIES:






Loss  before  taxes  on  income from continuing operations


(155,041)

(22,225)

(4,504)

(1,131)

Net loss from discontinued operation (before taxes)


(3,065)

(3,065)

-

-

Income tax paid, net


(17,982)

(4,485)

(11,307)

(2,841)

Adjustments for cash generated from operations


682,006

170,737

186,867

46,949

Net cash provided by operating activities (a)


505,918

140,962

171,056

42,977

CASH FLOWS FROM INVESTING ACTIVITIES:






Purchase of property and equipment


(225,250)

(52,094)

(40,629)

(10,208)

Purchase of investment property


(72,379)

(26,703)

(6,992)

(1,757)

Purchase of intangible assets


(26,190)

(2,833)

(4,580)

(1,151)

Proceeds from collection of  short-term bank deposits, net


(504)

(573)

(5,280)

(1,327)

Proceeds from sale of property and equipment


100,940

355

85,255

21,421

Proceeds from sale of investment property


8,750

-

-

-

Proceeds from sale of  marketable securities


378,491

35,353

67,899

17,060

Investment in marketable securities


(238,239)

(23,326)

(28,346)

(7,122)

Investment and loans to associates


(7,341)

(691)

642

161

Proceeds from decrease in holding rate of an associate


-

-

9,822

2,468

Grant of long term loans


(79,580)

(64,249)

-

-

Collection of long-term loans


76,292

17,766

49,106

12,338

Discontinuance of consolidation


(2,089)

(2,089)

-

-

Interest received


12,361

5,430

4,846

1,218

Net cash used in investing activities


(74,738)

(113,654)

131,743

33,101














 

 


ALON BLUE SQUARE ISRAEL LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2015

(UNAUDITED)











Convenience






translation



Year ended

Three months ended

for  the three
 months ended



December 31,

March 31,

March 31,



2014

2014

2015

2015



NIS

U.S. dollars



In thousands

CASH FLOWS FROM FINANCING ACTIVITIES:






Dividend paid to non-controlling interests


(59,380)

(40,286)

-

-

Issuance of debentures


158,103

-

-

-

Repayment of debentures


(536,259)

(2,406)

(2,347)

(590)

Receipt of long-term loans


768,319

100,000

95,000

23,869

Repayment of long-term loans


(586,396)

(39,084)

(67,894)

(17,059)

Repayment of commercial paper


(9,139)

-

(17,222)

(4,327)

Short-term credit from banks and others, net


(36,651)

20,854

(106,835)

(26,843)

Transactions with non-controlling interests in subsidiary without loss of control


69,695

-

88,008

22,114

Settlement of forward contracts


(5,232)

-

-

-

Interest paid


(220,672)

(41,786)

(33,314)

(8,370)

Net cash used in financing activities


(457,612)

(2,708)

(44,604)

(11,206)

 

INCREASE (DECREASE)  IN CASH AND CASH  EQUIVALENTS AND BANK OVERDRAFTS


(26,432)

24,600

258,195

64,872

Translation differences on cash and cash equivalents


53

5

38

10

BALANCE OF CASH AND CASH EQUIVALENTS AND BANK OVERDRAFTS AT BEGINNING OF PERIOD


310,991

310,991

284,612

71,511

BALANCE OF CASH AND CASH EQUIVALENTS AND BANK OVERDRAFTS AT END OF PERIOD


284,612

335,596

542,845

136,393

 

 

ALON BLUE SQUARE ISRAEL LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2015

 (UNAUDITED)







Convenience






translation






the three



Year ended

Three months

months ended



December 31,

ended March 31,

March 31,



2014

2014

2015

2015



NIS

U.S. dollars



In thousands








(a)

 Net cash provided by operating activities:







Adjustments for:







Depreciation and amortization


278,526

66,214

70,642

17,749


Increase in fair value of investment
property, net


(50,258)

(10,551)

(14,771)

(3,711)


Gain from decreasing holding rate in associate


-

-

(1,611)

(405)


Share in profit of associates


(37,997)

(9,303)

(4,224)

(1,061)


Dividend received


38,000

2,725

1,506

378


Gain (loss) from sale and disposal of  property and equipment, net


(77,674)

3,308

1,501

377


Provision for impairment of property
and equipment, net


22,000

-

-

-


Loss (gain) from changes in fair value of  derivative financial instruments


(4,775)

(1,727)

1,263

317


Linkage differences on monetary assets, debentures, loans and other long
term liabilities


(2,367)

(20,950)

(36,385)

(9,142)


Employee benefit liability, net


(9,579)

(9,601)

1,844

463


Increase  in value of investment in securities, deposits and long-term receivables, net


(12,799)

473

(8,680)

(2,181)


Interest paid, net


199,771

34,887

27,124

6,815


Changes in operating assets and liabilities:







Investment in real estate inventories


(3,589)

(571)

(801)

(201)


Decrease (increase) in trade receivables and other accounts


173,619

(227,982)

(246,517)

(61,939)


Increase in trade payables
and other accounts payable


75,681

391,700

434,502

109,170


Decrease (increase) in inventories


93,447

(47,885)

(38,526)

(9,680)




682,006

170,737

186,867

46,949









(b) Supplementary information on investing and financing activities not involving cash flows:







Dividends declared to non- controlling interests


-

-

10,887

2,735


Purchase of property and equipment and investment
property on credit


4,228

11,915

1,698

427


Proceeds from sale of property and equipment on credit


90,486

-

-

-

 

 


ALON BLUE SQUARE ISRAEL LTD.

NET LIABILITIES

(UNAUIDITED)





Convenience




translation


December 31,

March 31,

March 31,


2014

2014

2015

2015


NIS

U.S. dollars


In thousands



Alon Blue Square*







Cash and cash equivalence


163,292

39,700

202,115

50,783

Investment in securities


87,858

136,912

87,116

21,888

Total assets


251,150

176,612

289,231

72,671

Short term and Long-term debt:






Short term loans from banks


94,975

100,008

93,292

23,440

Current maturities of loans from banks


17,718

17,614

17,435

4,381

Current maturities of debentures


47,913

111,760

47,148

11,846

Commercial papers


120,337

120,360

97,072

24,390

Long term loans from banks


124,115

140,910

122,470

30,771

Debentures


316,825

225,791

311,858

78,356

Total  debt


721,883

716,443

689,275

173,184

Equity:






Equity attributable to equity holders of the company:


664,699

1,024,809

664,742

167,021

Total debt, net


(470,733)

(539,831)

(400,044)

(100,513)







*    Net of grant of loans or loans received from subsidiaries 



Net liabilities, Alon Blue Square and fully owned subsidiaries

Convenience





translation



December 31,

March 31,

March 31,



2014

2014

2015

2015



NIS

U.S. dollars



In thousands



Alon Blue Square







Cash and securities


258,363

182,833

307,474

77,255

Short term debt


662,889

562,826

621,639

156,191

Long term debt


715,244

672,670

682,785

171,554







Total debt


1,378,133

1,235,496

1,304,424

327,745

Total debt, net


(1,119,770)

(1,052,663)

(996,950)

(250,490)


Repayment of loans and debentures, Alon Blue Square and fully owned subsidiaries of March 31, 2015








First year

Second year

Third year

Fourth year

Total





and thereafter



In thousands

Alon solo

62,076

62,076

62,076

310,470

496,698

Subsidiaries

70,762

69,105

61,194

119,701

320,762


132,838

131,181

123,270

430,171

817,460

 

 

ALON BLUE SQUARE ISRAEL LTD.

RECONCILIATION BETWEEN NET INCOME FOR THE PERIOD AND ADJUSTED EBITDA

FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2015

 (UNAUDITED)












Convenience






translation



Year ended

Three months

for the three months ended



December 31,

ended March 31,

March 31,



2014

2014

2015

2015



NIS in thousands

U.S. dollars
in thousands







Loss from continuing operations


(374,896)

(18,791)

(30,540)

(7,673)

Taxes on income (tax benefit)


219,855

(3,434)

26,036

6,542

Share in gains of associates


(37,997)

(9,303)

(4,224)

(1,061)

Share in adjusted EBITDA of equity accounted investees


47,916

10,101

12,825

3,222

Share in EBITDA of branches which were resolved to cease their operation


54,533

9,107

4,631

1,164

Finance expenses, net


211,252

32,731

5,930

1,490

Other losses (income), net


(7,692)

8,741

10,757

2,703

Changes in fair value of investment property


(50,258)

(10,551)

(14,771)

(3,711)

Depreciation and amortization


278,526

66,214

70,642

17,749

Proceeds from sale of property*


59,261

-

-

-

Adjusted EBITDA


400,500

84,815

81,286

20,425


*Comparative figures are represented and include gains from realization of properties. For further information see "Additional Information-Adjusted EBITDA"

 

ALON BLUE SQUARE ISRAEL LTD.
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2015
(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 reporting segments: Supermarkets – food retail, Fueling and Commercial sites, Houseware and textile, Real Estate in addition to other segment which includes mainly Cellular activity, the Company's share in the issuance and clearance activity of credit cards, the baby products sector and the logistic center in Beer Tuvia. The segments' results, as reviewed by the Chief Operating Decision Maker (CODM) include the operating profit before financial expenses from continuing operations, including the company's share in gains of associates and excluding impairment of excess costs. The segments' results for prior periods were adjusted in order to reflect the segment's results and the adjustment to the results in the consolidated report for those periods from continuing operations.

The Company's operating segments consist of the following:

(1)      Fueling and commercial 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 fueling and commercial 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 costs arising at the time of acquisition allocated to the reconciliation between the operating profit of the segment and the consolidated operating profit.

(2)      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, 2015, Mega Retail operated 192 supermarkets including branches which were resolved to cease their operation. 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). The results of branches which were resolved to cease their operation including comparative figures that were restated are included in the adjustments of segment results to consolidated profit or loss since the CODM reviews the Supermarkets segment without these branches. The allocation of costs attributed to the branches which were resolved to cease their operation was made based on direct costs and joint expenses that will be saved.

(3)      Houseware and textile –through its subsidiary, Na'aman Group (NV) Ltd. ("Na'aman"), the Company is engaged as retailer and wholesaler in houseware and textile activities. As of March 31, 2015, Na'aman operated 113 stores, some through franchisees. Effective from this quarter, the Company presents in Houseware and textile segment Na'aman Group's houseware and textile activity. Other activities which were included in this segment are presented in others. Comparative figures were classified accordingly. The segment's resultsare presented according to the published financial statements of Na'aman Group. Amortization of excess costs and impairment of goodwill included in the reconciliation between the operating profit of the segment and the consolidated operating profit.

(4)      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.

(5)      Others – Alon Blue Square through its 100% subsidiary, Alon Cellular Ltd, operates an MVNO network in Israel and through Diners Club Israel Ltd., an associate held at 49%, which operates in the sector of issuance and clearance of YOU credit cards to the customer club members of the group, by Dr. Baby Marketing and Distribution 888 Ltd.  100 % held subsidiary as a retailer and wholesaler in the baby products sector and by Bee Group Ltd.100% held subsidiary which operates the logistic center in Beer Tuvia.

 

ALON BLUE SQUARE ISRAEL LTD.

FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2015

 (UNAUDITED)



Three months ended March 31, 2015







Adjustments



Fueling and
Commercial
sites

Supermarkets

Houseware
and textile

Real
Estate

Others

Branches
resolved to cease
their operation

Other
adjustments

Total
consolidated


NIS in thousands










Net segment revenues

967,279

1,369,272

82,310

18,076

26,272

18,989

-

2,482,198

Inter segment revenues

7,789

-

7,461

-

914

-

(16,164)

-

Gross profit (loss)

186,364

335,641

48,851

18,076

314

3,419

(777)

591,888

Depreciation and amortization

23,141

41,249

1,818

-

2,573

-

1,861

70,642

Segment profit

22,861

(25,023)

7,314

26,086

(6,297)

(5,639)

(11,538)

7,764

Unallocated corporate expenses








(6,338)

Financial expenses, net








(5,930)

Loss before taxes on income








(4,504)





























Three months ended March 31, 2014







Adjustments



Fueling and
Commercial
sites

Supermarkets

Houseware
and textile

Real
Estate

Others

Branches
resolved to cease
their operation

Other
adjustments

Total
consolidated


NIS in thousands










Net segment revenues

1,194,200

1,314,059

70,958

10,288

27,568

97,799

-

2,714,872

Inter segment revenues

7,356

-

9,426

-

1,102

-

(17,884)

-

Gross profit (loss)

190,172

338,254

44,238

10,288

(2,875)

22,413

(665)

601,825

Depreciation and amortization

21,490

34,076

1,411

-

2,618

4,528

2,101

66,214

Segment profit

27,086

(6,536)

5,792

24,039

(6,509)

(15,563)

(11,448)

16,861

Unallocated corporate expenses








(6,355)

Financial expenses, net








(32,731)

Profit before taxes on income








(22,225)











 

 


ALON BLUE SQUARE ISRAEL LTD.

FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2015

 (UNAUDITED)

Note 1 - Segment reporting (continued):



Year ended December 31, 2014







Adjustments



Fueling and
Commercial
sites

Supermarkets

Houseware
and textile

Real
Estate

Others

Branches
resolved to
cease their
operation

Other
adjustments

Total
consolidated


NIS in thousands










Net segment revenues

4,859,627

5,442,942

280,888

51,158

116,949

309,393

-

11,060,957

Inter segment revenues

48,110

-

19,298

-

4,144

-

(71,552)

-

Gross profit (loss)

791,665

1,353,109

166,629

51,158

(8,741)

66,710

(565)

2,419,965

Depreciation and amortization

91,219

146,613

5,949

-

11,361

14,351

9,033

278,526

Segment profit

140,481

39,266

11,549

102,610

(28,970)

(68,885)

(105,363)

90,688

Unallocated corporate expenses








(34,477)

Financial expenses, net








(211,252)

Loss before taxes on income








(155,041)


Three months ended March 31, 2015







Adjustments



Fueling and
Commercial
sites

Supermarkets

Houseware
and textile

Real
Estate

Others

Branches
resolved to
cease their
operation

Other
adjustments

Total
consolidated


U.S dollars in thousands










Net segment revenues

243,035

344,038

20,681

4,542

6,601

4771

-

623,668

Inter segment revenues

1,957

-

1,875

-

230

-

(4,062)

-

Gross profit (loss)

46,825

84,332

12,274

4,542

79

859

(194)

148,717

Depreciation and amortization

5,814

10,364

457

-

646

-

468

17,749

Segment profit

5,744

(6,287)

1,838

6,554

(1,582)

( 1,417)

(2,899)

1,951

Unallocated corporate expenses








(1,592)

Financial expenses, net








(1,490)

Loss before taxes on income








(1,131)

 

______________________

1 The Company operates in 4 reportable segments: fueling and commercial sites, supermarkets, houseware and textile and real estate. Segment reporting is included in this report below. 

2 The segment revenues do not include branches which were resolved to cease their operations and therefore are not included in the segment.

3 Use of financial measures that are not in accordance with Generally Accepted Accounting Principles

Adjusted 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, share in gains of associates, depreciation and amortization in addition to share in adjusted EBITDA of equity accounted investees and share in EBITDA of branches which were resolved to cease their operation and accumulated revaluation profits of real estate properties that were realized in the period and capital gains from realizing real estate properties that were self-used. 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. Adjusted 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. Adjusted 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 Adjusted 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 Adjusted EBITDA which is presented in this press release.

 

Contact:
Alon Blue Square Israel Ltd.
Yehuda van der Walde, CFO
Toll-free telephone from U.S. and Canada:  888-572-4698
Telephone from rest of world: 972-9-961-8504
Fax: 972-9-961-8636
Email: cfo@bsi.co.il

SOURCE Alon Holdings Blue Square - Israel Ltd.