Alon Holdings Blue Square - Israel Ltd. Announces Financial Results for the First Quarter of 2011
The Steps the Company is Taking are Beginning to Show
ROSH HA'AYIN, Israel, May 25, 2011 /PRNewswire-FirstCall/ -- Alon Holdings Blue Square-Israel Ltd. (NYSE and TASE: BSI) today announced its financial results for the first quarter ended March 31, 2011.
- The operating profit this quarter was NIS 92 million which represents an increase of 26% compared to the corresponding quarter last year and an increase of 86% compared to the previous quarter, which includes the results of Dor Alon for the first time.
- The same store sales (SSS) in the Supermarket segment reduced by 2.1% due to the effect of the timing of the Passover festival. However, adjusted for the timing of the festival, they increased by 2.5%.
- Eden Teva Briut reached operating profits and continues its accelerated development program.
- Dor Alon's operating profit increased 28% in the first quarter of 2011 compared to the fourth quarter of 2010.
- The reorganization in the BEE Group is beginning to bear fruit, with the operating profit of the segment moving from an operating loss of NIS 20 million in the previous quarter to a profit of NIS 2.7 million this quarter. The company is still in the process of the move to its new logistics center - a process that continues to cause additional expenses.
- BSRE's NOI for the first quarter of 2011 was NIS 50.3 million as compared to NIS 44.5 million in the corresponding quarter last year, an increase of 13%.
- During the second quarter the Company exercised its rights and acquired 49% of the shares of Diners Israel.
The main results of the quarter as compared to the previous quarter (Q4
2010):
Data in millions of NIS 1-3 2011 10-12 2010 Rate of change
Net revenues 3,007.1 2,983.5 0.8%
Gross profit 729.5 738.6 (1.2%)
Rate of gross profit 24.3% 28.1%
Operating profit (before other
gains and losses and changes
in fair value of investment
property)
91.7 49.2 86.3%
Rate of operating profit 3.1% 1.7%
Finance expenses, net 40.7 42.5 (4.1%)
Net profit for the period 37.7 1.4 2,592.8%
Results for the first quarter of 2011[1]
Gross revenues
Revenues (including government levies) in the first quarter of 2011 amounted to NIS 3,709.5 million (U.S. $1,065.6 million) as compared to revenues of NIS 1,830.8 million in the comparable quarter last year, an increase of 102.6%. The main increase in revenues was due to the inclusion of the results of Dor Alon. Dor Alon's sales in the first quarter, including government levies of NIS 702.3 million (U.S. $201.8 million) amounted to NIS 1,950.6 million (U.S. $560.4 million).
Revenues from sales, net
The Supermarket and non-food segment were affected by the timing of the Passover festival that fell during the second quarter this year where last year it fell in the first quarter.
Revenues of the Supermarkets segment - amounted to NIS 1,636.5 million (U.S. $470.1 million) in the current quarter as compared to NIS 1,689.9 million in the corresponding quarter last year, a decrease of 3.2%. The decrease in revenues was due to a reduction in the same store sales SSS) at a rate of 2.1% which was mainly due to the timing of the Passover festival as discussed above and partly offset by the opening of 11 stores and the closure of 5 stores from the beginning of 2010. Excluding the effect of the timing of the Passover festival the SSS increased by 2.5%.
Revenues of the Commercial and Fueling sites segment - amounted to NIS 1,255.7 million (U.S. $360.7 million) as compared to NIS 993 million in the corresponding quarter last year[2], an increase of 26.5%. The main increase compared to the corresponding quarter was due to the increase in sales in the fueling sites, an increase in sales in the convenience stores and an increase in the price of petrol.
Revenues of the non-food segment - a reduction in revenues by 14.3% from NIS 135.5 million in the first quarter of 2010 to NIS 116.1 million (U.S. $33.3 million) in the current quarter. The decrease in revenues is mainly due to the timing of the Passover festival as discussed above.
Revenues of the real estate segment - an increase in rental income of 16.7% from NIS 5.4 million in the first quarter of 2010 to NIS 6.3 million (U.S. $1.8 million) in the current quarter. The increase is mainly due to an increase in leased space.
Gross profit in the first quarter of 2011 amounted to NIS 729.5 million (U.S. $209.6 million) (24.3% of revenues) as compared to gross profit of NIS 513.8 million (28.1% of revenues) in the comparable quarter last year. Excluding the effect of Dor Alon's results, the gross profit decreased by NIS 2.7 million (U.S. $0.7 million) (0.5%). The decrease in the gross profit was mainly due to the decrease in sales in the non-food segment which was mainly due to the timing of the Passover festival, as discussed.
Selling, general and administrative expenses in the first quarter of 2011 amounted to NIS 637.7 million (U.S. $183.2 million) (21.2% of sales), compared to expenses of NIS 441.2 million (24.1% of revenues) in the comparable quarter last year, an increase of 44.6%. Excluding the effect of Dor Alon's results the selling, general and administrative expenses increased by NIS 18.3 million (U.S. $5.2 million) (4.1%). The main increase was recorded in the Supermarkets segment due to the costs relating to the opening and closing of stores and an increase in municipal taxes and electricity expenses.
Operating profit (before other gains and losses and changes in fair value of investment property) in the first quarter of 2011 amounted to NIS 91.7 million (U.S. $26.4 million) (3.1% of revenues) as compared to NIS 72.6 million (4% of revenues) in the comparable quarter last year, an increase of 26.3%. In the previous quarter, that included the results of Dor Alon for the first time, the operating profit amounted to NIS 49.2 million. Excluding the effect of Dor Alon's results the operating profit (before other gains and losses and changes in fair value of investment property) decreased by NIS 17.9 million (U.S. $5.1 million) (24.6%). The decrease in the operating profit was mainly due to the timing of the Passover festival as discussed, the increase in selling, general and administrative expenses in the Supermarkets segment and from the decrease in sales in the non-food segment.
Changes in fair value of investment property in the first quarter of 2011 the Company recorded profit from the increase in the value of investment property in the amount of NIS 3.1 million (U.S. $0.9 million) compared to NIS 2.3 million in the comparable quarter last year.
Operating profit in the first quarter of 2011 amounted to NIS 92.9 million (U.S. $26.7 million) (3.1% of revenues) as compared to operating profit of NIS 73.6 million (4% of revenues) in the comparable quarter last year, an increase of 26.2%. In the previous quarter the operating profit amounted to NIS 49.6 million.
Finance costs, net in the first quarter of 2011 amounted to NIS 40.7 million (U.S. $11.7 million) as compared to net finance costs of NIS 14.4 million in the comparable quarter last year. Excluding the effect of the results of Dor Alon the finance expenses increased by NIS 14.8 million (U.S. $4.3 million). The increase was mainly due to the increase of 0.9% in the Israeli CPI this quarter as compared to a decrease of 0.95% in the Israeli CPI in the corresponding period and an increase in the Company's net debt as a result of the acquisition of Dor Alon and the investments of Blue Square Real Estate. The increase in finance costs was partly netted of by the finance income from the revaluation of the option to acquire shares in Diners Israel.
Taxes on income in the first quarter of 2011 totaled NIS 15.7 million (U.S. $4.5 million) (an effective tax rate of 29.4% as compared to the statutory tax rate of 24%) as compared to NIS 21.5 million (an effective tax rate of 36.7% as compared to the statutory rate of 25%) in the comparable quarter last year.
Net income for the first quarter of 2011 amounted to NIS 37.7 million (U.S. $10.8 million) as compared to net income of NIS 37.1 million in the comparable quarter last year and net profit of NIS 1.4 million in the fourth quarter of 2010. The net profit in the first quarter of 2011 attributable to equity holders of the Company amounted to NIS 30 million (U.S. $8.6 million) or NIS 0.46 per share (U.S. $0.13) and the part attributable to the non-controlling interests amounted to NIS 7.7 million (U.S. $2.2 million).
Cash flows for the first quarter of 2011
Cash flows from operating activities: Net cash flow from operating activities amounted to NIS 216.0 million (U.S. $62.1 million) in the first quarter of 2011 compared to NIS 21.5 million from operating activities in the comparable quarter last year. The cash flows from operating activities is mainly due to the increase in trade payables and other accounts payable of NIS 380.8 million due to improvements in the terms of trade, advances from purchasers of apartments of NIS 86 million and the acquisition of Dor Alon which provided cash flows from operating activities in the first quarter of NIS 64.7 million net of the increase in trade receivables and other accounts receivable of NIS 323.7 million and an increase in inventories of NIS 71.6 million.
Cash flows used in investing activities: Net cash flows used in investing activities amounted to NIS 216.3 million (U.S. $62.1 million) in the first quarter of 2011 as compared to net cash used in investing activities of NIS 49.5 million in the comparable quarter. Cash flows used in investing activities in the first quarter of 2011 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 shareholder, increases 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.
In the first quarter of 2010 the cash flows used in investing activities mainly included the acquisition of property and equipment, investment property and intangible assets of NIS 38.7 million as well as investment in securities of NIS 60.7 million net of the proceeds from sale of securities of NIS 44.5 million.
Cash flows from financing activities: Net cash flows from financing activities amounted to NIS 10.1 million (U.S. $2.9 million) in the first quarter of 2011 as compared to net cash flows used in financing activities of NIS 63.0 million in the corresponding quarter last year. The cash flows from financing activities in the first quarter of 2011 mainly included the repayment of loans of NIS 59.6 million, the payment of interest of NIS 55.8 million net of the increase in short term credit from banks of NIS 137.3 million. The net cash flows used in financing activities in the first quarter of 2010 included mainly dividends paid of NIS 75 million, repayment of long term loans of NIS 38.7 million and the payment of interest of NIS 38.6 million, net of the increase in short term credit from banks of NIS 107.7 million.
Comments of Management
Mr. David Weissman, Chairman of the Board of Directors and Chief Business Officer - "From the fourth quarter of 2010 the Company operates in four segments and is engaged in steps to develop the segments and to generate synergy between them.
In the second quarter as part of the strengthening of the retail and financial arms of the Company we signed an amendment in principle to our agreement to acquire 49% of the shares of Diners Israel from C.A.L. of the Discount Group allowing us full partnership rights (49%) in the profits of Diners Israel. The numbers of credit cards held by YOU customers is, at the moment, 135 thousand and we intend to double the number of cards within 3 years. The current total number of our loyalty club customers is 900 thousand.
Dor Alon leads in its market after entering a new modern world as the first to open and operate convenience stores, first in self-service fuelling and first to identify the potential of coffee shops with its foundation of the Segafredo chain and these days we lead the environment friendly market and continue to show impressive growth.
In the real estate sector the Company, through BSRE, its property managing real estate arm, develops and achieves its vision to become a leading company in the yield earning real estate market.
Alon Cellular is currently completing its business plan and is preparing to launch its operation towards the end of the year.
Through the BEE Group the Company operates in the non-food area and is completing its move to the logistics center which combines all the Group's non-food operations.
All the above together makes our Group the largest retail group in Israel"
Commenting on the financial results, the CEO, Mr. Zeev Vurembrand said:
"We conclude the first quarter of 2011 today, in which we saw the effects of the strategic steps we took to deal with the increased level of competition in the supermarket and non-food segment. This quarter was characterized by the competition mainly in the market outside the cities as a result of the conversion in the format of competitor's stores and the opening of new stores by the private chains. This quarter we adhered to a strategy of maintaining our market share and we attained the goals we set. This strategy resulted in an increase in advertising and marketing and other costs, partly of a one-off character.
The Passover festival falls in the second quarter this year, in contrast to last year, and therefore a comparison between the two quarters, both in the Supermarkets and the non-food segments is not representative. Despite this, the same store sales this quarter reduced by 2.1%. However, if the effect of the Passover festival was neutralized it showed an increase of 2.5%.
In this period we are continuing the second stage of our strategic plan, which as a central plank includes the accelerated opening of 30 new stores with a total floor space of approximately 27 thousand square meters in the next two years. About 25 of these stores will be of the local 'Mega in Town' format. We want to maintain the 50% share of sales for this local format.
Eden Teva Briut presents, for the first time since its foundation, an operating profit this quarter. These results were attained on the basis of its leading position in the healthy - organic food retail market. We intend to accelerate the opening of Eden in Mega sections in Mega stores so that by the end of 2012 this chain will count approximately 30, half independent and half Eden in Mega of the Shop-in-Shop format, stores.
BEE Group completed its senior management resource reorganization and from this quarter we see a big improvement in the results and we expect this improvement to continue in future quarters. "
Additional Information
1. As of March 31, 2011, the Company operated 209 supermarkets divided as follows: Mega In Town -119; Mega Bool - 61; Mega - 6; Shefa Shuk - 12; Eden Teva Market -14 of which 3 Eden within Mega, Dor Alon - 190 fueling stations and 182 convenience stores and the Bee Group operates 280 branches (some franchised).
2. EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization)[3]in the first quarter of 2011 EBITDA was NIS 160.8 million (U.S. $ 46.2 million) (5.3 % of revenues) compared to NIS 117.7 million (6.4% of revenues) in the comparable quarter of 2010.
Post balance sheet events
On May 25, 2011 the Company's Board of Management agreed an amendment to the agreement of principles between C.A.L. and the Company, Dor Alon Energy in Israel (1988) Ltd. and the Blue Square Dor Alon loyalty plan partnership, which details changes to the existing agreement between the parties relating to the joint operation of Diners Israel and extends the YOU loyalty club agreement to the end of 2015.
According to the amendment to the agreement the Company and its subsidiary will have the right to their full share (amounting to 49%) of the profits of Diners Israel Ltd. and the loan granted by C.A.L. will be repaid by them.
The amendment is subject to the approval of the Boards of Directors of the parties to the transactions.
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 209 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 190 petrol stations and 185 convenience stores in different formats in Israel. In its Real Estate segment, Alon Holdings, through its TASE traded 78.26% subsidiary Blue Square Real Estate Ltd., owns, leases and develops yield generating commercial properties and projects.
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, uncertainties and 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 shelf offering report filed in Israel, portions of which were submitted to the SEC on Form 6-K on November 8, 2010. 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, 2011
(UNAUDITED)
Convenience
translation
December
31, March 31, March 31,
--------------------------
2010 2010 2011 2011
-------- -------- -------- --------
NIS U.S. dollars
------------------------------------------------
In thousands
------------------------------------------------
A s s e t s
CURRENT ASSETS:
Cash and cash
equivalents 125,956 523,489 127,572 36,648
Investment in
securities 310,237 226,783 297,356 85,423
Short-term bank
deposits 98,084 - 91,977 26,423
Trade receivables 1,731,747 854,229 1,826,626 524,742
Related parties 31,099 - 105,242 30,234
Other accounts
receivable including
current maturities of
loans receivable 131,500 328,472 350,697 100,745
Derivative financial
instruments - 7,391 - -
Income taxes receivable 64,094 51,629 70,714 20,314
Inventories 680,296 550,948 751,852 215,987
--------- --------- --------- ---------
3,173,013 2,542,941 3,622,036 1,040,516
--------- --------- --------- ---------
NON-CURRENT ASSETS:
Investments in
associates 6,012 4,303 7,270 2,088
Derivative financial
instruments 56,078 16,976 87,773 25,215
Real estate inventories 83,337 - 84,844 24,373
Payments on account of
real estate 164,132 - 168,652 48,449
Financial assets
available for sale 30,327 - 32,083 9,217
Loans receivable, net
of current maturities 176,043 - 176,074 50,581
Property and equipment,
net 2,915,516 1,954,758 2,917,719 838,184
Investment property 558,488 423,804 573,907 164,868
Intangible assets, net 1,494,147 410,527 1,482,750 425,955
Other long-term
receivables 47,097 5,926 113,740 32,675
Deferred taxes 66,018 41,901 69,240 19,891
--------- --------- --------- ---------
5,597,195 2,858,195 5,714,052 1,641,496
--------- --------- --------- ---------
Total assets 8,770,208 5,401,136 9,336,088 2,682,013
--------- --------- --------- ---------
--------- --------- --------- ---------
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF MARCH 31, 2011
(UNAUDITED)
Convenience
translation
December
31, March 31, March 31,
--------------------------
2010 2010 2011 2011
-------- -------- -------- --------
NIS U.S. dollars
------------------------------------------------
In thousands
------------------------------------------------
Liabilities and
shareholders' equity
CURRENT LIABILITIES:
Credit and loans from
banks and others 470,284 252,974 600,153 172,408
Current maturities of
debentures and
convertible debentures 202,769 75,234 204,878 58,856
Current maturities of
long-term loans from
banks 297,771 118,916 322,863 92,750
Trade payables 1,342,763 938,421 1,513,644 434,830
Other accounts payable
and accrued expenses 686,633 704,689 917,881 263,683
Customers' deposits 30,405 - 28,772 8,265
Derivative financial
instruments 7,700 - 12,103 3,477
Income taxes payable 7,431 3,905 4,161 1,195
Provisions 68,870 45,676 68,026 19,542
--------- --------- --------- ---------
3,114,626 2,139,815 3,672,480 1,055,007
--------- --------- --------- ---------
NON CURRENT LIABILITIES:
Long-term loans from
banks, net of current
maturities 1,270,159 568,428 1,195,824 343,529
Convertible debentures,
net of current
maturities 117,801 135,245 118,549 34,056
Debentures, net of
current maturities 2,183,093 1,244,196 2,188,203 628,613
Other liabilities 199,983 16,118 259,851 74,648
Derivative financial
instruments 9,151 5,845 9,321 2,678
Liabilities in respect
of employee benefits,
net of amounts funded 51,492 48,584 52,265 15,014
Loan from related party 129,000 - 129,000 37,058
Deferred taxes 112,764 58,864 119,913 34,448
--------- --------- --------- ---------
4,073,443 2,077,280 4,072,926 1,170,045
--------- --------- --------- ---------
Total liabilities 7,188,069 4,217,095 7,745,406 2,225,052
--------- --------- --------- ---------
EQUITY:
Equity attributed to
equity holders of the
Company:
Ordinary shares of NIS 1
par value 79,711 58,357 79,835 22,934
Additional paid-in
capital 1,218,409 1,042,364 1,218,409 350,017
Other reserves (12,538) 4,896 (19,472) (5,594)
Accumulated deficit (85,760) (109,797) (58,647) (16,847)
--------- --------- --------- ---------
1,199,822 995,820 1,220,125 350,510
Non-controlling
interests 382,317 188,221 370,557 106,451
--------- --------- --------- ---------
Total equity 1,582,139 1,184,041 1,590,682 456,961
Total liabilities and
equity 8,770,208 5,401,136 9,336,088 2,682,013
--------- --------- --------- ---------
--------- --------- --------- ---------
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
CONSOLIDATED STATEMENTS OF INCOME
Convenience
translation
for the
Year ended Three months three months
ended March
December 31, ended March 31, 31,
------------------
2010 2010 2011 2011
------- ------- ------- -------
In thousands (except per share data)
----------------------------------------------
Revenues 9,227,453 1,830,824 3,709,468 1,065,633
Less - government levies 723,709 - 702,349 201,766
------- ------- ------- -------
Net revenues 8,503,744 1,830,824 3,007,119 863,867
Cost of sales 6,192,352 1,317,070 2,277,642 654,307
------- ------- ------- -------
Gross profit 2,311,392 513,754 729,477 209,560
Selling, general and
administrative expenses 2,069,970 441,170 637,731 183,203
------- ------- ------- -------
Operating profit before
other gains and losses
and changes in fair
value of investment
property 241,422 72,584 91,746 26,356
Other gains 3,258 956 1,000 287
Other losses (28,188) (2,187) (2,909) (836)
Changes in fair value of
investment
property, net 32,917 2,274 3,055 878
------- ------- ------- -------
Operating profit 249,409 73,627 92,892 26,685
Finance income 85,852 14,955 45,001 12,928
Finance expenses (235,847) (29,379) (85,742) (24,631)
------- ------- ------- -------
Finance expenses, net (149,995) (14,424) (40,740) (11,704)
Share in gains (losses)
of associates (518) (576) 1,213 348
------- ------- ------- -------
Income before taxes on
income 98,896 58,627 53,365 15,330
Taxes on income 36,287 21,533 15,691 4,507
------- ------- ------- -------
Net income for the
period 62,609 37,094 37,674 10,823
------- ------- ------- -------
------- ------- ------- -------
Attributable to:
Equity holders of the
Company 47,839 28,756 29,988 8,615
------- ------- ------- -------
Non-controlling
interests 14,770 8,338 7,686 2,208
------- ------- ------- -------
Earnings per ordinary
share or ADS
attributable to equity
holders of the company
Basic 0.96 0.65 0.46 0.13
------- ------- ------- -------
Fully diluted 0.96 0.65 0.45 0.13
------- ------- ------- -------
Weighted average number
of shares or ADSs used
for computation of
earnings per share:
Basic 49,590 43,987 65,903 65,903
------- ------- ------- -------
Fully diluted 49,814 44,505 66,138 66,138
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2011
(UNAUDITED)
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2011
(UNAUDITED)
Convenience
translation
Year ended Three months for the three
December ended months ended
31, March 31, March 31,
--------------------------
2010 2010 2011 2011
-------- -------- -------- --------
NIS in thousands U.S. dollars
in thousands
---------------------------------- ------------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Income before taxes on
income 98,896 58,627 53,365 15,330
Income tax paid
(received), net 5,741 15,712 (19,680) (5,654)
Net cash provided by
operating activities
(a) 101,192 (52,821) 182,339 52,381
-------- -------- -------- --------
Net cash provided by
operating activities 205,829 21,518 216,024 62,057
-------- -------- -------- --------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Purchase of property
and equipment (193,474) (31,261) (65,534) (18,826)
Purchase of investment
property (20,720) (342) (20,341) (5,843)
Purchase of intangible
assets (34,133) (7,119) (4,993) (1,434)
Proceeds from
collection of
short-term bank
deposits, net 12,401 67 6,107 1,754
Proceeds from sale of
property and equipment 1,306 - 11,090 3,186
Investment in
restricted use deposits - - (87,277) (25,072)
Proceeds from sale of
marketable securities 373,040 44,449 19,601 5,631
Investment in
marketable securities (365,091) (60,686) (21,672) (6,226)
Acquisition of
subsidiaries 87,219 - - -
Grant of loans to
jointly controlled
companies (31,442) - (61,733) (17,734)
Payments on account of
real estate (76,884) - - -
Redemption of long-term
loans 1,565 - 3,027 870
Interest received 18,331 5,420 5,340 1,534
-------- -------- -------- --------
Net cash provided by
(used in) investing
activities (227,882) (49,472)(216,384) (62,161)
-------- -------- -------- --------
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2011
(UNAUDITED)
Convenience
translation
Year ended Three months for the three
December ended months ended
31, March 31, March 31,
--------------------------
2010 2010 2011 2011
-------- -------- -------- --------
NIS in thousands U.S. dollars
in thousands
---------------------------------- ------------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Dividends paid (875,000) (75,000) - -
Issuance of
debentures 205,035 - - -
Transactions with
non-controlling
interests in
subsidiary without
loss of control 17,197 - - -
Dividend paid to
non-controlling
interests (17,619) (14,298) - -
Receipt of long-term
loans 470,600 - 2,547 732
Repayment of
long-term loans (165,014) (38,637) (59,559) (17,110)
Repayment of long
term credit from
trade payables (1,740) (435) (435) (125)
Repayment of
debentures (2,155) - (2,305) (662)
Short-term credit
from banks and
others, net (52,404) 107,691 137,322 39,449
Receipt of loans from
interested party 90,000 - - -
Proceeds from issue
of shares relating to
share based payments
in the company and a
subsidiary 758 630 124 36
Acquisition of shares
from non-controlling
interests (24,557) - (7,927) (2,277)
Settlement of forward
contracts 21,247 - - -
Purchase of treasury
shares 4,295) (4,295) (3,953) (1,136)
Interest paid (147,532) (38,646) (55,711) (16,004)
-------- -------- -------- --------
Net cash provided by
used in) financing
activities (485,479) (62,990) 10,103 2,902
-------- -------- -------- --------
INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS AND
BANK OVERDRAFTS (507,532) (90,944) 9,743 2,799
Translation
differences on cash
and cash
equivalents (71) - (12) (4)
-------- -------- -------- --------
BALANCE OF CASH AND
CASH EQUIVALENTS
AND BANK OVERDRAFTS
AT BEGINNING OF
PERIOD 611,734 611,734 104,131 29,914
-------- -------- -------- --------
BALANCE OF CASH AND
CASH EQUIVALENTS
AND BANK OVERDRAFTS
AT END OF PERIOD 104,131 520,790 113,862 32,709
-------- -------- -------- --------
-------- -------- -------- --------
(Continued - 2)
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2011
(UNAUDITED)
Convenience
translation
Year ended Three months for the three
December ended months ended
31, March 31, March 31,
--------------------------
2010 2010 2011 2011
-------- -------- -------- --------
NIS U.S. dollars
---------------------------------- ------------
In thousands
------------------------------------------------
(a) Net cash provided
by operating
activities:
Adjustments for:
Depreciation and
amortization 206,945 43,205 67,938 19,517
Increase in fair
value of
investment
property, net (32,917) (2,274) (3,055) (878)
Share in (gains)
losses of
associates 518 576 (777) (223)
Share based
payment 6,834 1,901 1,114 320
Loss from sale and
disposal of
property and
equipment, net 5,962 148 (647) (186)
Provision for
impairment of
property and
equipment, net 946 124 377 108
Loss (gain) from
changes in fair
value of
derivative
financial
instruments (8,029) 3,023 (26,197) (7,526)
Linkage
differences on
monetary assets,
debentures, loans
and other long
term liabilities 57,626 (12,063) 28,350 8,144
Employee benefit
liability, net 2,371 1,335 773 222
Decrease
(increase) in
value of
investment in
securities,
deposits and
long-term
receivables, net (15,013) 629 1,480 425
Interest paid, net 118,311 33,226 44,460 12,772
Changes in
operating assets
and liabilities:
Investment in real
estate inventories (87,092) - (1,983) (570)
Payments on
account of real
estate inventories (71,564) - (1,065) (306)
Increase in trade
receivables and
other accounts
receivable (53,264) (308,014) (323,715) (92,995)
Increase in
inventories (49,910) (36,090) (71,556) (20,556)
Increase in
advances from
purchasers of
apartments - - 86,092 24,732
Increase
(decrease) in
trade payables and
other accounts
payable 19,468 221,453 380,752 109,380
-------- -------- -------- --------
101,192 (52,821) 182,339 52,381
-------- -------- -------- --------
(Concluded - 3)
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2011
(UNAUDITED)
Convenience
translation
Year ended Three months for the three
December ended months ended
31, March 31, March 31,
--------------------------
2010 2010 2011 2011
-------- -------- -------- --------
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 43,895 12,394 - -
Purchase of
property and
equipment on
credit 37,084 3,678 (5,870) (1,686)
Issue of shares
against
acquisition of
shares in
subsidiary 965,770 - - -
Dividends
declared to
non-controlling
interests - - 15,760 4,527
Advances from
customers
deposited in
restricted use
deposit 22,428 - (21,357) (6,135)
-------- -------- -------- --------
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
SELECTED OPERATING DATA
FOR THE THREE MONTH PERIOD
ENDED MARCH 31, 2011
(UNAUDITED)
Convenience
translation
Year ended Three months for the three
December ended months ended
31, March 31, March 31,
--------------------------
2010 2010 2011 2011
-------- -------- -------- --------
In the consolidated
report:
Gross revenues (in
millions) 9,227 1,831 3,709 1,065
Net revenues 8,504 1,831 3,007 864
Operating profit before
other gains and losses
and changes in fair
value of investment
property (in millions) 241 73 92 26
EBITDA (in millions) 455 118 161 46
EBITDA margin 5.3% 6.4% 5.3% 5.3%
In the Supermarkets
segment:
Increase (decrease) in
same store sales (0.8%) 1.2% (2.1%) N.A.
Number of stores at end
of period 206 206 209 N.A.
Stores opened during the
period 7 3 4 N.A.
Stores closed during the
period 4 - 1 N.A.
Total square meters at
end of period 366,200 370,700 369,600 N.A.
Square meters added
during the period, net 1,200 5,700 3,400 N.A.
Sales per square meter 18,692 4,578 4,441 1,276
Sales per employee (in
thousands) 1,000 248 232 67
Openings - square meters 8,100 5,700 4,100 N.A.
Closings - square meters (6,900) - (700) N.A.
-------- -------- --------
Net openings 1,200 5,700 3,400
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
RECONCILIATION BETWEEN NET INCOME FOR THE PERIOD AND EBITDA
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2011
(UNAUDITED)
Convenience
translation
Year ended Three months for the three
December ended months ended
31, March 31, March 31,
--------------------------
2010 2010 2011 2011
-------- -------- -------- --------
NIS U.S. dollars
---------------------------------- ------------
In thousands
------------------------------------------------
Net income for the period 62,609 37,094 37,674 10,819
Taxes on income 36,287 21,533 15,691 4,507
Share in gains (losses) of
associates 518 576 (1,213) (348)
Finance expenses, net 149,995 14,424 40,740 11,704
Other losses, net 24,930 1,231 1,909 549
Changes in fair value of
investment property (32,917) (2,274) (3,055) (878)
Depreciation and
amortization 206,945 43,205 67,938 19,517
Share based payment 6,834 1,901 1,114 320
-------- -------- -------- --------
EBITDA 455,201 117,690 160,798 46,190
-------- -------- -------- --------
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2011
(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:
(1) 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, 2011, Mega Retail operated 209 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).
(2) 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.
(3) 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, 2011, BEE Group operated 280 non-food retail outlets, mostly through franchisees, with specialties in houseware and home textile, toys, leisure, and infant.
(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.
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2011
(UNAUDITED)
Note 1 - Segment reporting (continued)
Three months ended March 31, 2011
-------------------------------------------------------------
Commercial
and
Real fueling Total
Supermarkets Non-food estate sites Adjustments consol
-idated
-------------------------------------------------------------
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
Rate of
operating
profit
(loss)before
other gains
and losses
net and
changes in
fair value
of
investment
property 3.0% 2.2% 40.1% 4.0% 3.2%
Segment
profit 49,572 847 5,569 50,329 (7,482) 98,835
Unallocated
corporate
expenses (5,943)
-----------
Operating
profit 92,892
-----------
Three months ended March 31, 2010
-------------------------------------------------------------
Commercial
and
Real fueling Total
Supermarkets Non-food estate sites Adjustments consol
-idated
-------------------------------------------------------------
NIS in thousands
-------------------------------------------------------------
Net segment
sales 1,689,895 135,515 5,414 - - 1,830,824
Inter
segment
sales - 16,755 - - (16,755) -
Depreciation
and
amortization 39,434 3,771 - - - 43,205
Operating
profit
(loss)
before other
gains and
losses net
and changes
in fair
value of
investment
property 59,617 18,505 970 - (1,223) 77,869
Rate of
operating
profit
before other
gains and
losses net
and changes
in fair
value of
investment
property 3.5% 12.2% 17.9% - 4.3%
Segment
profit 58,363 18,529 3,243 - (1,223) 78,912
Unallocated
corporate
expenses (5,285)
Operating -----------
profit 73,627
-----------
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2011
(UNAUDITED)
Note 1 - Segment reporting (continued)
Year ended December 31, 2010
-------------------------------------------------------------
Commercial
and
Real fueling Total
Supermarkets Non-food estate sites Adjustments consol
-idated
-------------------------------------------------------------
NIS in thousands
-------------------------------------------------------------
Net segment
sales 6,894,978 438,623 25,162 1,144,981 - 8,503,744
Inter
segment
sales - 43,444 - 8,339 (51,783) -
Depreciation
and
amortization 163,020 15,156 - 27,328 1,441 206,945
Operating
profit
(loss)
before other
gains and
losses net
and changes
in fair
value of
investment
property 241,942 (7,189) (4,843) 42,936 (9,424) 263,422
Rate of
operating
profit
before other
gains and
losses net
and changes
in fair
value of
investment
property 3.5% (1.5%) (19.2%) 3.7% 3.1%
Segment
profit 232,944 (19,519) 28,074 39,333 (9,424) 271,409
Unallocated
corporate
expenses (22,000)
Operating -----------
profit 294,409
-----------
Three months ended March 31, 2011
-------------------------------------------------------------
Commercial
and
Real fueling Total
Supermarkets Non-food estate sites Adjustments consol
-idated
-------------------------------------------------------------
U.S. dollars in thousands
-------------------------------------------------------------
Net segment
sales 470,134 33,344 1,802 358,587 - 863,867
Inter
segment
sales - 2,820 - 2,150 (4,969) -
Depreciation
and
amortization 11,419 1,007 - 6,390 701 19,517
Operating
profit
(loss)
before other
gains and
losses net
and changes
in fair
value of
investment
property 14,241 787 722 14,458 (2,144) 28,064
Rate of
operating
profit
(loss)before
other gains
and losses
net and
changes in
fair value
of
investment
property 3.0% 2.2% 40.1% 4.0% 3.2%
Segment
profit 14,241 243 1,600 14,458 (2,149) 28,393
Unallocated
corporate
expenses (1,707)
Operating ---------
profit 26,686
---------
[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] The results of Dor Alon were included with the Company's results from October 3, 2010. Data for the first quarter of 2010 were included in this report in order to allow comparison and identification of the trends in the segment.
[3] 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: +1-888-572-4698
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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