Alon Holdings Blue Square - Israel Ltd. Announces Financial Results for the Fourth Quarter of 2011 and the Year Ended 2011
ROSH HA'AYIN, Israel, March 22, 2012 /PRNewswire/ --
Alon Holdings Blue Square-Israel Ltd. (NYSE and TASE: BSI) today announced its financial results for the year and fourth quarter ended December 31, 2011.
Year ended 2011
- The sales in 2011 amounted to NIS 12,482 million (U.S. $3,267 million) compared to NIS 8,504 million in 2010* (an increase of 47%) and the operating profit amounted to NIS 287 million (U.S. $75 million) (an increase of 19% compared to the corresponding period last year.
Fourth Quarter of 2011
- The sales in the fourth quarter amounted to NIS 3,039 million (U.S. $795.3 million) (an increase of 1.9%) and the operating profit amounted to NIS 17 million (U.S. $4.4 million) compared to NIS 49 million in the comparable quarter last year.
- In the fourth quarter of 2011 the Company recorded onetime tax expenses of NIS 34.5 million (U.S. $9.0 million) due to legislative changes in increased Corporate tax rates to 25%.
KEY FIGURES for the year and the fourth quarter compared to the comparable periods last year:
The
rate The
Data in NIS of rate of
(millions) 1-12 2010 1-12 2011 change 10-12/2010 10-12/2011 change
Net revenues 8,504 12,482 46.8% 2,983 3,039 1.9%
Gross profit 2,311 2,916 26.2% 739 689 (6.8%)
Rate of gross
profit 27.1% 23.4% 24.8% 22.7%
Operating income
(before other
gains and losses
and changes in
fair value of
investment
property) 241 287 19.1% 49 17 (65.3%)
Rate of operating
income 2.8% 2.3% 1.6% 0.6%
Financial
expenses, net 150 176 17.3% 42 41 (2.4%)
Income before
taxes on income 98.9 140.3 41.9% 7.2 (21.6)
Taxes on income 36.3 46.8 28.9% 5.8 34.5 493%
Rate of taxes on
income 37% 33% 81%
Net income (loss)
for the period 63 94 49.2% 1 (56)
Results for the year 2011[1]
Gross revenues
Revenues (including government levies) in 2011 were NIS 15,296.2 million(U.S. $4,003.2 million), compared to NIS 9,227.4 million in 2010 - an increase of 65.8%. The main increase in revenues was due to the inclusion of the results of Dor Alon. Dor Alon's revenues in 2011, including government levies of NIS 2,813.6 million (U.S. $736.3 million) amounted to NIS 8,151.6 million (U.S. $2,133.3 million).
Revenues from sales, net
Supermarkets segment revenues, net - in 2011 amounted to NIS 6,723.8 million (U.S. $1,759.7 million) as opposed to NIS 6,895.0 million in 2010, a decrease of 2.5%, (Decrease in sales of SSS stores of 2.7%). The main decrease was due to the public protest in Israel that commenced at the end of the second quarter this year which caused a decrease in selling prices to consumers, a decrease in demands and an acceleration of competition in the sector which impaired the sales in the Supermarkets segment. Sales per square meter amounted to NIS 18,090 (U.S. $4,734) in 2011, compared to NIS 18,692 in 2010.
Revenues of the Commercial and Fueling sites segment in 2011 amounted to NIS 5,301.9 million (U.S. $1,387.5 million) as compared to NIS 4,329.9 million in 2010[2], an increase of 22.4%. The main increase stems from increase in the quantitative sales as a result of opening new fueling sites, an increase in sales in the convenience stores and an increase in the price of petrol between the periods.
Non-food segment - a decrease in revenues of approximately 2.9% from NIS 438.6 million in 2010 to NIS 425.8 million (U.S. $111.4 million) in 2011. The decrease in revenues was mainly due to a decrease in sales to franchises stemming in the home and leisure sectors from increased competition in the sector and was partly offset by increase in sales of home textile.
Real estate segment - increase in revenues of approximately 23.0% from NIS 25.2 million in 2010 to NIS 31.0 million (U.S. $8.1 million) in 2011. The increase in revenues is mainly due to the increase in leased premises and from the effect of the increase of CPI.
Gross Profit in 2011 amounted to approximately NIS 2,915.7 million (U.S. $763.0 million) (approximately 23.3% of revenues) compared to gross profit of approximately NIS 2,311.4 million (27.2% of revenues) in 2010. The decrease in the gross profit rate derives from including Dor Alon's results fully in 2011 while in 2010 Dor Alon's results were included in the fourth quarter.
In the Supermarkets segment, gross profit amounted to NIS 1,850.7 million (U.S. $484.4 million), (27.5% of revenues) compared to NIS 1,889.7 million in 2010 (27.4% of revenues), a decrease of 2.1% stemming from decrease in sales.
In the Commercial and fueling sites segment, gross profit amounted to NIS 876 million (U.S. $229.2 million), (16.5% of revenues) compared to NIS 862 million in 2010[2] (19.9% of revenues), an increase of 1.6% that derived from increase in fuel prices and increase in the sales of convenience stores.
In the Non food segment, gross profit amounted to NIS 157.8 million (U.S. $41.3 million), (37.1% of revenues) compared to NIS 164.1 million in 2010 (37.4% of revenues) a decrease of 3.8% that derived from decrease in sales.
Selling, general, and administrative expenses in 2011 amounted to approximately NIS 2,628.8 million (U.S. $688.0 million) compared to NIS 2,070.0 million in 2010, an increase of 26.9%. The majority of the increase derives from including the results of Dor Alon as mentioned above.
In the Supermarket segment, selling, general and administrative expenses amounted to NIS 1,693.4 million (U.S. $443.2 million) an increase of 2.6% that resulted from opening new branches and increase in payroll and CPI linked expenses such as rent and municipality taxes.
In the Commercial and fueling sites segment, these expenses amounted to NIS 702.3 million (U.S. $183.8 million) an increase of 3.5% deriving from opening new fueling sites and legislative changes in the payroll sector.
In the Non food segment, these expenses amounted to NIS 167.4 million (U.S. $43.8 million) a decrease of 1.7%.
In the real estate segment, these expenses amounted to NIS 15.6 million (U.S. $4.1 million) a decrease of 47.9% deriving from decrease in advertising expenses that included last year advertising and marketing expenses in respect of the residential project in the wholesale market in Tel Aviv.
Operating profit (before other gains and losses and increase in the fair value of investment property) in 2011 amounted to approximately NIS 286.9 million (U.S. $75.0 million) compared to operating income of NIS 241.4 million in 2010, an increase of 18.8%.
In the Supermarkets segment, operating profit decreased from NIS 241.9 million in 2010 to NIS 177.3 million (U.S. $ 46.4 million) due to decrease in sales and increase in expenses as mentioned above.
In the Commercial and fueling sites segment, operating profit decreased from NIS 180.7 million in 2010[2] to NIS 173.6 million (U.S. $45.4 million) due to reducing the marketing margins.
In the Non food segment, operating loss increased from NIS 7.2 million in 2010 to NIS 24.9 million (U.S. $6.5 million) due to a decrease in sales to franchisees in the home and leisure sector as a result of an increase of competition in this segment and an increase in the provisions for doubtful accounts.
In the real estate segment, transition from operating loss of NIS 4.8 million in 2010 to operating profit of NIS 15.4 million (U.S. $4.0 million) due to increase in leased premises and decrease in selling administrative and general expenses.
Increase in fair value of investment property in 2011, the Company recorded profit from the increase in the value of investment property in the amount of NIS 41.9 million (U.S. $10.9 million) including NIS 18.4 million (U.S. $4.8 million) from revaluation of property in Kiryat Hasharon, Netanya, half of which was sold and NIS 7.5 million (U.S. $1.9 million) from revaluation of "Hadar mall" in Jerusalem. In 2010 the Company recorded a gain from increase in value of investment property in the amount of NIS 32.9 million.
Other income and expenses, net in 2011 the Company recorded other expenses, net in the amount of NIS 18.2 million (U.S. $4.8 million) compared to net expenses of NIS 24.9 million in 2010. These expenses included costs relating to the relocation of part of the BEE group companies to the new logistic center in Beer Tuvia and disposal and impairment of property and equipment in the supermarket segment.
Operating profit in 2011 was NIS 310.6 million (U.S. $81.3 million) compared to operating profit of NIS 249.4 million in 2010, an increase of 24.5%. Excluding the effect of Dor Alon's results the operating profit decreased by NIS 43.8 million (U.S. $11.5 million).
Financial Expenses, Net in 2011 were NIS 176.0 million (U.S. $46.1 million) compared to financial expenses, net of NIS 150.0 million in 2010. Excluding the effect of the results of Dor Alon the finance expenses decreased by NIS 26.3 million (U.S. $6.9 million). The decrease was mainly a result of finance income from the revaluation of the option to purchase shares of Diners and capitalization of borrowing costs of projects under construction in the real estate segment that was partly offset by an increase in the Company's indebtedness following the purchase of Dor Alon and the increase of the Israeli CPI (the CPI increased in 2011 by 2.55% compared to increase of 2.28% in 2010).
Taxes on Income in 2011 were approximately NIS 46.6 million (U.S. $12.2 million) (33.1% effective tax rate compared to a statutory tax rate of 24%) compared to NIS 36.3 million (effective tax rate of 37% compared to a statutory tax rate of 25%) in 2010. The increase in tax expenses this year stems mainly from increase in the tax rates following the Tranchtenberg Committee and from losses of the Group companies in respect of which, no deferred taxes were recorded and was partly offset by recording a liability for deferred taxes in the statements of income.
Net Income in 2011 was NIS 93.7 million (U.S. $24.5 million) compared to net income of NIS 62.6 million in 2010. The increase in net income in this period compared to the corresponding period last year mainly derives from including Dor Alon's results, the impact of the option revaluation of Diners and tax benefit on exercising the option. The net income in 2011 attributable to the equity holders of the company was NIS 69.5 million (U.S. $18.2 million), or NIS 1.05 per share (U.S. $0.27), while the portion attributable to the non-controlling interests was NIS 24.2 million (U.S. $6.3 million).
Cash Flows in 2011
Cash Flows from Operating Activities: Net cash flows deriving from operating activities in 2011 amounted to NIS 627.6 million (U.S. $164.2 million) compared to cash flows from operating activities of NIS 205.8 million in 2010. The inclusion of Dor Alon's results contributed to the cash flow from operating activities in 2011, the amount of NIS 136.3 million.
The increase in cash flows from operating activities is mainly due to a decrease in working capital in the Supermarket segment, from advancing receipts from credit card companies of NIS 203.4 million (U.S. $53.2 million), from the increase in advances from purchasers of apartments of NIS 102.6 million (U.S. $26.8 million) net off increase in tax payments of NIS 85.1 million (U.S. $22.3 million).
Cash Flows from Investing Activities: Net Cash flows used in investing activities in 2011 amounted to approximately NIS 547.3 million (U.S. $143.2 million) compared to net cash flows of NIS 227.9 million used in investing activities in 2010. Cash flows used in 2011 included mainly purchases of property and equipment, investment property and intangible assets, in a total amount of NIS 347.3 million (U.S. $90.9 million), the grant of long term loans of NIS 144.9 million, (U.S. $37.9 million), mainly to controlling shareholders, investment in restricted deposits in the amount of NIS 102.6 million (U.S. $26.8 million) and an investment in an associate (Diners) of NIS 36.4 million (U.S. $9.5 million). Cash flows used in investing activities in 2010 included mainly purchases of property and equipment, intangible assets, investment property and payments on account of real estate in a total amount of NIS 325.2 million, net off the net cash received from the acquisition of a company consolidated for the first time in the amount of NIS 87.2 million.
Cash Flows from Financing Activities: Net Cash flows used in financing activities in 2011 amounted to NIS 110.6 million (U.S. $28.9 million) compared to net cash flow used in financing activities of NIS 485.5 million in 2010. Cash flows used in financing activities in 2011 included mainly repayment of bonds in the amount of NIS 174.9 million (U.S. $45.8 million), repayment of loans in the amount of NIS 382.5 million (U.S. $100.1 million), and payments of interest in the amount of NIS 222.7 million (U.S. $58.3 million), this was offset by an increase in short term bank credit in the amount of NIS 582.5 million (U.S. $152.4 million) and receiving loans in the amount of NIS 213.7 million (U.S. $55.9 million). Net Cash flows used in financing activities in 2010 included payment of dividends of NIS 875.0 million and an increase of NIS 77.2 million from the inclusion of the results of Dor Alon for the first time. These items were offset by the receipt of long term loans of NIS 470.6 million and the issue of debentures of NIS 205.0 million.
Comments of Management
Mr. David Weisman Active Chairman and Chief Business manager - "In 2011, we commenced the group reorganization with the purchase of Dor Alon at the end of 2010 and we took several measures to exercise synergy in the group which include tender for joint acquisition and merger of IT systems etc. In 2011, which was a difficult year for the Israeli economy in general, retail segments, in which we engage, were adversely affected. In the food and non-food segments, the public protest, in the fuels segment, an unprecedented regulatory action impaired the operating profit. As we look forward, we intend to focus in 2012 on the improvement of the operating efficiency of the companies, adapting to the market condition and developing new segments. We shall expand in 2012 the You Club while relying on the collaboration with Diners, in which our interest is 49%. In addition, we shall launch in the first half of 2012 the cellular operations that will reflect the Company's power as the largest retail group in Israel. Dor Alon, which ended the year with EBITDA profit of NIS 270 million (U.S. $70.6 million) and net income of NIS 60.2 million (U.S. $15.7 million) has achieved a milestone in itself, an organized plan for efficiency, reducing discounts for the institutional market, expanding the operations of the convenience stores "Alonit" and "AM-PM" which are the largest and most profitable in their segment in Israel and entering into other segments.
BSRE "Etz Ha'alon" ("Oak Tree") upon which the entire retail is based, expanded its operations and is highly appreciated and extremely successful in its segment. The Company has an income of NIS 200 million (U.S. $52.3 million) from earning assets (including assets leased to Group's Companies), tens of thousands of sq. meters of construction rights in different stages of design and construction in the partnership of the residential project in the wholesale market complex in Tel Aviv (50%). The Company has over NIS 2 billion (U.S. $526 million) earning assets (including assets leased to Group's Companies) without any lien".
Mr. Zeev Vurembrand, CEO, said: "In the food segment, the year 2011 can be divided into two parts, where each half was characterized differently. In the first half the company improved its performance and number of operating parameters while the second half was marked by the public protest and deepening the competition by opening commercial spaces. The actions taken in the second half, using campaigns and discounts adversely affected sales and profitability in the second half of this year. The Company is taking several actions to gradually improve the operating profit. These days, we finalize the cut back of 15% of headquarters personnel in all levels of management. In addition, the Company initiated several efficiency measures in selling, operating and advertising expenses compared to last year. In our view, these measures will yield fruits in 2012. The Company intends to continue its efficiency measures and sell, already in this year, 6 losing branches. 14 new branches with a total area of 17,000 sq. meters will be opened this year, most of which are in "Mega in Town" format. This format led the company's performance in the previous year compared to the relatively slow activity of "Mega Bool" for which measures will be taken to improve the performance in the coming year. "Eden Teva Market" completed the second stage of the strategic plan and has 20 branches - 9 of which are in Eden in Mega Format. In the coming year most emphasis shall be put on improving the chain and its operating performance. The private brand "Mega" represents 15% of the sale and the company intends to expand the product variety and the categories in this line. In the non food segment, during 2011, Bee Retail completed reorganization procedures and relocation to a one of a kind modern logistic center, which had a considerably negative effect on performance as a result of recording a one-time expense of NIS 20 million. The company redefined the synergetic and non synergetic activities. The synergetic activities of Naaman, Vardinon and Sheshet are successful and a strategic partner was admitted to the non synergetic activities and a chain manager to "Kfar Hashashuim" and "Hakol Bedollar". In 2012, we shall consider exitting channels which are not synergetic to the group's activity. In addition, in the second quarter of 2012, we shall launch cellular operations under the brand of "You Phone" that shall operate on the basis of the customers "You" club which will grant a unique benefit system to club members. This act shall reflect the Company's strength, in its operating channels, as the largest retail group in Israel.
Results for the fourth quarter of the year 2011
Gross Revenues (including government levies) for the fourth quarter of 2011 were NIS 3,740.6 million(U.S. $978.9 million) compared to revenues of approximately NIS 3,707.2 million in the comparable quarter last year, an increase of 0.9%.
Supermarket segment revenues, net- a decrease in revenues of 5.3% from NIS 1,740.0 million in the fourth quarter of 2010 to NIS 1,647.7 million (U.S. $431.2 million) in the current quarter. The decrease in revenues was mainly due to a decrease in same store sales (SSS) at a rate of 6.4%, as explained above. Sales per square meter amounted to NIS 4,394 (U.S. $1,150) in the fourth quarter of 2011 compared to NIS 4,756 in the comparable quarter last year.
Revenues of the Commercial and Fueling sites segment - an increase of 13.5% in revenues for the fourth quarter of 2011 from NIS 1,145.0 million to NIS 1,299.7 million (U.S. $340.1 million) The increase in revenues derives from increase in fuel prices.
Non - Food segment revenues - a decrease in revenues of 9.2% from NIS 91.3 million in the fourth quarter of 2010 to NIS 82.9 million (U.S. $21.7 million) in the current quarter. The decrease mainly derived from the reasons described in the analysis of the results for 2011.
Real Estate segment revenues - rental fees from external parties of NIS 7.2 million in the fourth quarter of 2010 compared to NIS 9.1 million (U.S. $2.4 million) in the current quarter, an increase of 26.4%. The increase in revenues derives from the same reasons described in the analysis of 2011 results.
Gross Profit in the fourth quarter of 2011 amounted to approximately NIS 689.4 million (U.S. $180.4 million) compared to gross profit of approximately NIS 738.6 million in the comparable quarter.
In the Supermarket segment, gross profit amounted to NIS 444.6 million (U.S. $116.3 million) (26.9% of revenues) compared to NIS 477.5 million (27.4% of revenues), a decrease of 6.9% compared to the corresponding quarter in 2010 that derived from decrease in sales. The erosion of the gross profit rate derives from an increase in competition and in discounts and campaigns.
In the Commercial and Fueling sites segment, gross profit amounted to NIS 204 million (U.S. $53.4 million) (15.7% of revenues) a decrease of 11.8% compared to the corresponding quarter in 2010 that derived from reducing marketing margins.
In the Non food segment, gross profit amounted to NIS 31.6 million (U.S. $8.3 million) (38.1% of revenues) an increase of 46.7% compared to the corresponding quarter that derived from increase in retail sales and decrease in sales to franchisees.
Selling, General and Administrative Expenses in the fourth quarter of 2011 amounted to NIS 672.2 million (U.S. $175.9 million) compared to approximately NIS 689.4 million in the comparable quarter, a decrease of approximately 2.5%.
In the Supermarket segment, these expenses amounted to NIS 425.9 million (U.S. $111.5 million), an increase of 1%.
In the Commercial and Fueling sites segment, these expenses amounted to NIS 196.3 million (U.S. $53.4 million), a decrease of 1.7%.
In the Non food segment, these expenses amounted to NIS 43.8 million (U.S. $11.5 million), an increase of 3.4%.
In the Real estate segment, these expenses amounted to NIS 4.1 million (U.S. $1.1 million), a decrease of 76.1% that derived from decrease in advertising expenses that included last year advertising and marketing expenses in respect of the residential project in the wholesale market complex.
Operating Profit (before other gains and losses and increases in the fair value of investment property) in the fourth quarter of 2011 amounted to NIS 17.1 million (U.S. $4.5 million) (net off NIS 5.1 million (U.S. $1.3 million) of unattributed headquarters expenses) compared to NIS 49.2 million in the fourth quarter of 2010, a decrease of 65.2%.
In the Supermarket segment, operating profit decreased from NIS 52.6 million in the fourth quarter of 2010 to NIS 25.8 million (U.S. $6.7 million) due to decrease in sales.
In the Commercial and Fueling sites segment, operating profit decreased from NIS 42.9 million in the fourth quarter of 2010 to NIS 17.5 million (U.S. $4.6 million) due to reducing marketing margins.
In the Non food segment, operating loss decreased from NIS 20.4 million in the fourth quarter of 2010 to NIS 17.7 million (U.S. $4.6 million) from increase in retail sales and decrease in sales to franchisees.
In the Real estate segment, transition from operating loss of NIS 9.9 million in the fourth quarter in 2010 to operating profit of NIS 5.0 million (U.S. $1.3 million) due to decrease in selling administrative and general expenses.
Increase in the Fair Value of Investment Property In the fourth quarter of 2011, the Company recorded gain from appreciation of investment property in the amount of NIS 13.8 million (U.S. $3.6 million). In the fourth quarter of 2010, the Company recorded a gain from increase in value of investment property amounting to NIS 14.1 million.
Other income and expenses, Net In the fourth quarter of 2011, the Company recorded other expenses, net of NIS 11.1 million (U.S. $2.9 million), compared to net expenses of NIS 13.7 million in the comparable quarter. The expenses this quarter included costs relating to the transfer of certain BEE Group companies to the new logistic center in Beer Tuvia, impairment and disposal of the property and equipment in the Supermarket segment of NIS 5.1 million (U.S. $1.3 million).
Operating Profit amounted to approximately NIS 19.8 million (U.S. $5.2 million) compared to operating profit of NIS 49.6 million in the fourth quarter of 2010.
Financial Expenses, net, for the fourth quarter of 2011 were NIS 41.0 million (U.S. $10.7 million) compared to financial expenses, net of NIS 42.5 million in the comparable quarter last year. The decrease in net financial expenses this quarter compared with comparable quarter last year derives mainly from decrease of the CPI (the CPI decreased in the fourth quarter of 2011 by 0.19% compared to an increase of 0.65% in the comparable period last year) and from capitalization of financial costs in the real estate segment and was partially offset from an increase in the Company's indebtedness from the purchase of Dor Alon.
Taxes on Income in the fourth quarter of 2011 tax expenses amounted to NIS 34.5 million (U.S. $9.0 million) compared to theoretical tax benefit of NIS 5.2 million (U.S. $1.4 million) in accordance with a statutory tax rate of 24%. The increase in tax expenses this quarter stems mainly from increase in the tax rates following the Tranchtenberg Committee and from losses of the Group companies in respect of which, no deferred taxes were recorded. In the comparable quarter last year tax expenses amounted to NIS 5.8 million (effective tax rate of 81% compared to a statutory tax rate of 25%. The difference between statutory and effective tax rate derives from expenses in respect of which, no deferred taxes were recorded).
Net loss in the fourth quarter of 2011 amounted to NIS 56.1 million (U.S. $14.7 million) compared to a net income of NIS 1.4 million in the fourth quarter of 2010. The transition from net income in the corresponding quarter last year derived mainly from erosion of the gross profit and operating profit and from one time increase in tax expenses as explained above. The net loss in the fourth quarter of 2011 attributable to equity holders of the Company, was NIS 59.3 million (U.S. $15.5 million), or NIS 0.9 per share (U.S. $0.23), while the portion attributable to the non-controlling interests was NIS 3.2 million (U.S. $0.8 million).
Cash Flows in the fourth quarter of 2011
Cash Flows from Operating Activities: Net cash flows deriving from operating activities, amounted to NIS 141.4 million (U.S. $37 million) in the fourth quarter of 2011 compared to NIS 1.1 million in the comparable quarter last year. The increase in cash flows from operating activities was mainly due to advancing proceeds from credit card companies of NIS 203.4 million (U.S. $53.2 million) and was partially offset by decrease in operating profit and increase in tax payments.
Cash Flows from Investing Activities: Net Cash flows used in investing activities in the fourth quarter of 2011 amounted to NIS 69.9 million (U.S. $18.3 million) compared to net cash flows of NIS 235.3 million from investing activities in the corresponding quarter of last year. The cash flows used in investing activities in the fourth quarter of 2011 mainly included the purchase of property and equipment, intangible assets and investment property of NIS 74.5 million (U.S. $19.5 million), investments in restricted deposits of NIS 4.3 million (U.S. $1.1 million), and investment in marketable securities, net of NIS 9.7 million (U.S. $2.5 million). Cash used in investing activities in the fourth quarter of 2010 mainly included proceeds from sales of marketable securities, net off NIS 228.6 million and cash from consolidation of Dor Alon for the first time of NIS 87.2 million, net of acquisition of property and equipment, intangible assets and investment property of NIS 96.5 million.
Cash Flows used in Financing Activities: Net Cash flows used in financing activities amounted to NIS 93.9 million (U.S. $24.5 million) in the fourth quarter of 2011 as compared to net cash used in financing activities of NIS 403.1 million in the comparable quarter last year. Cash flows used in financing activities in the fourth quarter of 2011 included mainly payment of long term loans of NIS 200.8 million (U.S. $52.5 million), payment of a dividend of NIS 75 million U.S. $ 19.6 million) and was offset by long term loans received of NIS 81.1 million (U.S. $21.2 million) and change in short term credit of NIS 209.4 million (U.S. $54.8 million). Cash flows used in financing activities in the fourth quarter of 2010 included mainly the payment of a dividend of NIS 800 million and NIS 77.2 million deriving from the acquisition of Dor Alon net of receipt of long term loans of NIS 467.0 million and the issuance of debentures of NIS 96.4 million.
Additional Information
1. As of December 31, 2011, the Company operated 211 supermarkets divided as follows: Mega In Town -119; Mega Bool - 65; Zol BeShefa - 16 and Eden Teva Market -17 of which 6 Eden within Mega. Dor Alon operated 196 fueling stations and 198 convenience stores in various formats and 16 coffee shops. In the Non-food segment, the Company operated 248 branches (most are franchised).
2. EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization)[3] in 2011 was NIS 563.8 million (U.S. $147.5 million) (4.5% of revenues) compared to NIS 454.7 million (5.3% of revenues) in 2010.
EBITDA in the fourth quarter of 2011 was NIS 87.8 million (U.S. $22.9 million) (2.9% of revenues) compared to NIS 121.4 million (4.1% of revenues) in the comparable quarter of 2010.
3. Diners transaction
In May 2011, Alon Holdings and Dor Alon (thereafter - the buyers) and Cal (thereafter - Cal) signed an exercise of the agreement to purchase 49% of Diners held by Cal in exchange for a loan granted by Cal to the buyers.
In July, the Company completed the conditions and the buyers paid the loan in the amount of NIS 36 million which Cal granted them.
Alon Holdings and Dor Alon handled in their financial statements the agreement to buy Diners as option for purchasing stock options and recorded in the period income before taxes from revaluation of approximately NIS 102 million (U.S. $26.7 million). In the third quarter, upon the consummation of the purchase, the Company recorded in the statements of income liability in respect of deferred income taxes of NIS 37 million (U.S. $9.7 million) attributed to the revaluation gains from the option.
As of the date of this report, the Company has not yet completed the attribution of the purchase cost to the portion purchased in identifiable assets and liabilities of Diners. The attribution of the purchase cost, as above, was performed on the basis of an initial recognition and therefore, in the following reporting periods some adjustments may be necessary for this attribution.
4. Legislative amendments
a. Reduction of marketing margin on fuels:
In September of this year, the fuel administration reduced the marketing margin
on supervised fuels by 11.5 - 18.4 Agorot per liter;
b. Legislative amendments - changes in Corporate tax rates
On December 6, 2011, was published in the records the Law for Tax Burden Reform
(Legislative Amendments), 2011 ("the Law") which, among others, cancels effective
from 2012, the scheduled progressive reduction in the corporate tax rate set forth
in amendment 2009 and increases the corporate tax rate to 25% in 2012.
The effect of the abovementioned changes increased deferred tax balances by
approximately NIS 34.4 million (U.S. $9.0 million) which was recorded in taxes on
income.
5. Blue square Real Estate - Givon Parking , Tel Aviv
On October 11, 2011, BSRE received a notice from Tel Aviv municipality (the municipality and the notice) pursuant to which, all of the conditions to approve the BOT agreement of "Givon Parking" in Tel Aviv were fulfilled, in which BSRE shall hold in equal parts with its partners in the wholesale market companies. "Givon Parking" will be composed of approximately 1,000 parking lots adjacent to the wholesale market project. On November 13, 2011, the authority for use of property was delivered for the purpose of construction work. As per BSRE, construction works shall commence in the coming weeks. In return for constructing the parking lot, BSRE and its partners shall be entitled to operate and collect rental fees for parking for a period of 23 years from delivering the authority for use of property. The total establishment cost of the parking lot including related costs is estimated at NIS 144 million (U.S. $38.8 million), the share of BSRE is approximately NIS 72 million (U.S. $19.4 million).
6. Dividend distribution
On November 28, 2011 the Board of directors of the Company decided on an interim dividend distribution for the year 2011, in the amount of NIS 75 million (U.S. $19.6 million), NIS 1.13 per share (U.S. $0.30 per share/ADS).
The ex-div date for this dividend distribution was on December 15, 2011 and the dividend was paid on December 29, 2011.
7. Subsequent events:
a. On January 25, 2012, Midroog announced on lowering its rating on bonds (series A and C) issued by the Company, from A1 to A2 with stable outlook. In addition, Midroog granted A2 rating with stable outlook for bonds up to NIS 200 million par value the Company intends to issue by expanding Series C or by issuance of new Series with a duration up to 6 years.
b. Issuance of bonds:
- On January 4, 2012, the bonds series of BSRE (Series D) was expanded by a private offering of NIS 150,000 thousand par value of bonds (Series D) to institutional investors for 98.5% of their par value, reflecting a return of 5.8%.
- On February 15, 2012, the bonds series of Dor Alon (Series D) was expanded by a private offering of NIS 119,900 thousand par value of bonds (Series D) to institutional investors for 101.95% of their par value, reflecting a return of 6.9%.
c. Commitment for establishing a power plant
On February 8, 2012, a corporation controlled by Dor Alon (55% held) entered into a detailed agreement with Sugat Sugar Refineries Ltd. (Sugat) under which the corporation shall establish a power plant on its premises with total capacity of up to 124 Mega Watt.
Under the agreement, the power plant shall provide the energy needs of Sugat for 24 years and 11 months and in addition, the corporation may sell steam and electricity to third parties.
It was further agreed that in the stage preceding the first stage, the corporation shall connect the Sugat plant to the natural gas transmission systems, shall convert the existing energy plant of Sugat to a dual system enabling the operation by fuel oil and natural gas and shall operate and maintain for Sugat its existing energy plant, all as determined in the detailed agreement.
On March 1, 2012, the corporation entered into an agreement with Israel Natural Gas Lines Ltd. ("INGL") to connect Sugat to the national transmission system for natural gas and to provide natural gas transmission services by INGL (the agreement).
Pursuant to the agreement, INGL shall establish the infrastructures that include, inter alia, the transmission piping and the facilities necessary to connect the Sugat plant to natural gas and shall install the infrastructures necessary for natural gas transmission to the power plant which is planned to be built by the corporation on the Sugat plant premises.
The agreement is for a period until July 31, 2029 with a renewal option of five additional years.
Pursuant to the agreement the corporation shall bear the connecting expenses to the transmission system which is estimated at NIS 15 million. In addition the corporation is committed to pay the current annual payments to INGL for transmission services until the end of the agreement term in an immaterial amount, regardless of whether the corporation uses the transmission services or not.
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 December 31, 2011: U.S. $1.00 equals NIS 3.821. The translation was made solely for the convenience of the reader.
Alon Holdings Blue Square- Israel Ltd. (hereinafter: "Alon Holdings") is the leading retail company in the State of Israel and operates in four reporting segments: In its supermarket segment, Alon Holdings, through its 100% subsidiary, Mega Retail Ltd., currently operates 211 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 196 petrol stations and 198 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.
Forward-looking statements
This press release contains forward-looking statements within the meaning of safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, plans or projections about our business and our future revenues, expenses and profitability. Forward-looking statements may be, but are not necessarily, identified by the use of forward-looking terminology such as "may," "anticipates," "estimates," "expects," "intends," "plans," "believes," and words and terms of similar substance. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual events, results, performance, circumstance and achievements to be materially different from any future events, results, performance, circumstance and achievements expressed or implied by such forward-looking statements. These risks, uncertaintiesand other factors include, but are not limited to, the following: the effect of the recession in Israel on the sales in our stores and on our profitability; our ability to compete effectively against low-priced supermarkets and other competitors; quarterly fluctuations in our operating results that may cause volatility of our ADS and share price; risks associated with our dependence on a limited number of key suppliers for products that we sell in our stores; the effect of an increase in the minimum wage in Israel on our operating results; the effect of any actions taken by the Israeli Antitrust Authority on our ability to execute our business strategy and on our profitability; the effect of increases in oil, raw material and product prices in recent years; the effects of damage to our reputation or to the reputation of our store brands due to reports in the media or otherwise; and other risks, uncertainties and factors disclosed in our filings with the U.S. Securities and Exchange Commission (SEC), including, but not limited to, risks, uncertainties and factors identified under the heading "Risk Factors" in our annual report on Form 20-F for the year ended December 31, 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.
INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2011
(UNAUDITED)
Convenience
translation(A)
December 31 December 31,
2010 2011 2011
____________ ___________ ____________
NIS U.S. dollars
_________________________ ____________
In thousands
Assets _______________________________________
CURRENT ASSETS:
Cash and cash equivalents 125,956 76,451 20,008
Investment in securities 310,237 300,053 78,527
Short-term deposits 98,084 103,942 27,203
Trade receivables 1,731,747 1,586,150 415,114
Other accounts receivable
including current maturities of
long term loans granted 162,599 291,790 76,365
Derivative financial
instruments - 2,543 666
Assets classified as held for
sale - 3,610 945
Income taxes receivable 64,094 125,789 32,920
Inventories 680,296 676,590 177,072
___________ ___________ ___________
3,173,013 3,166,918 828,820
___________ ___________ ___________
NON-CURRENT ASSETS:
Investments in associates 6,012 202,653 53,037
Derivative financial
instruments 56,078 896 234
Real estate inventories 83,337 100,035 26,180
Payments on account of real
estate 164,132 191,600 50,144
Investments in securities 30,327 33,159 8,678
Loans receivable, net of
current maturities 176,043 150,660 39,429
Property and equipment, net 2,928,515 2,942,487 770,083
Investment property 546,870 576,093 150,770
Intangible assets, net 1,486,744 1,461,070 382,379
Other long-term receivables 47,098 174,325 45,622
Deferred taxes 66,018 104,321 27,302
___________ ___________ ___________
5,591,174 5,937,299 1,553,858
___________ ___________ ___________
Total assets 8,764,187 9,104,217 2,382,678
=========== =========== ===========
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2011
(UNAUDITED)
Convenience
translation(A)
December 31, December 31,
_______________________________
2010 2011 2011
___________________________________________________
NIS U.S. dollars
____________________________________ ____________
In thousands
___________________________________________________
Liabilities and
equity
CURRENT
LIABILITIES:
Credit and loans
from banks and
others 470,284 1,036,928 271,376
Current maturities
of debentures and
convertible
debentures 202,769 212,726 55,673
Current maturities
of long-term loans
from banks 297,771 311,642 81,560
Trade payables 1,342,763 1,243,914 325,547
Other accounts
payable and
accrued expenses 686,447 730,985 191,307
Customers'
deposits 30,405 27,733 7,258
Derivative
financial
instruments 7,700 2,814 736
Income taxes
payable 7,431 6,311 1,652
Provisions 71,870 78,266 20,483
___________ ___________ ___________
3,117,440 3,651,319 955,592
___________ ___________ ___________
NON CURRENT
LIABILITIES:
Long-term loans
from banks and
others, net of
current maturities 1,399,159 1,240,487 324,650
Convertible
debentures, net of
current maturities 117,801 118,826 31,098
Debentures, net of
current maturities 2,183,093 2,034,047 532,334
Other liabilities 199,983 264,597 69,248
Derivative
financial
instruments 9,151 16,701 4,371
Liabilities in
respect of
employee benefits,
net of amounts
funded 51,492 62,245 16,290
Deferred taxes 103,929 162,795 42,604
___________ ___________ ___________
4,064,608 3,899,698 1,020,595
___________ ___________ ___________
Total liabilities 7,182,048 7,551,017 1,976,187
___________ ___________ ___________
EQUITY:
Equity
attributable to
equity holders of
the Company:
Ordinary shares of
NIS 1 par value 79,712 79,878 20,905
Additional paid-in
capital 1,218,409 1,219,282 319,100
Other reserves (12,539) (16,375) (4,286)
Accumulated
deficit (85,760) (92,098) (24,102)
___________ ___________ ___________
1,199,822 1,190,687 311,617
Non - controlling
interests 382,317 362,513 94,874
___________ ___________ ___________
Total equity 1,582,139 1,553,200 406,491
___________ ___________ ___________
Total liabilities
and equity 8,764,187 9,104,217 2,382,678
=========== =========== ===========
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR AND THREE MONTH PERIODS ENDED DECEMBER 31, 2011
(UNAUDITED)
Convenience
For the translation(A)
Year ended three months for the
year ended
December 31, ended December 31, December 31,
_________________________ ______________________
2010 2011 2010 2011 2011
___________ ___________ __________ __________ ____________
NIS U.S. dollars
_________________________________________________ ____________
In thousands (except per share data)
_______________________________________________________________
Revenues 9,227,453 15,296,255 3,707,177 3,740,651 4,003,207
Less -
government
levies (723,709) (2,813,671) (723,709) (701,232) (736,370)
___________ ___________ __________ __________ __________
Net revenues 8,503,744 12,482,584 2,983,468 3,039,419 3,266,837
Cost of sales 6,192,352 9,566,876 2,244,855 2,350,045 2,503,762
___________ ___________ __________ __________ __________
Gross profit 2,311,392 2,915,708 738,613 689,374 763,075
Selling,
general and
administrative
expenses 2,069,970 2,628,845 689,372 672,231 687,999
___________ ___________ __________ __________ __________
Operating
profit before
other gains
and losses and
changes in
fair value of
investment
property 241,422 286,863 49,241 17,143 75,076
Other gains 3,258 1,358 1,366 (279) 355
Other losses (28,188) (19,577) (15,102) (10,825) (5,124)
Increase in
fair value of
investment
property, net 32,917 41,913 14,060 13,781 10,969
___________ ___________ __________ __________ __________
Operating
profit 249,409 310,557 49,565 19,820 81,276
Finance income 85,852 156,837 57,061 10,948 41,046
Finance
expenses (235,847) (332,839) (99,523) (51,981) (87,108)
___________ ___________ __________ __________ __________
Finance
expenses, net (149,995) (176,002) (42,462) (41,033) (46,062)
Share of gain
(loss) of
associates (518) 5,746 58 (407) 1,504
___________ ___________ __________ __________ __________
Income before
taxes on
income 98,896 140,301 7,161 (21,620) 36,718
Taxes on
income 36,287 46,588 5,810 34,453 12,192
___________ ___________ __________ __________ __________
Net income
(loss) 62,609 93,713 1,351 (56,073) 24,526
=========== =========== ========== ========== ==========
Attributable
to:
Equity holders
of the Company 47,839 69,513 (2,000) (59,283) 18,193
___________ ___________ __________ __________ __________
Non -
controlling
interests 14,770 24,200 3,351 3,210 6,333
___________ ___________ __________ __________ __________
Earnings
(loss) per
ordinary share
or ADS
attributed to
equity holders
of the Company
Basic 0.96 1.05 (0.03) (0.90) 0.27
___________ ___________ __________ __________ __________
Fully diluted 0.96 0.94 (0.03) (0.90) 0.25
___________ ___________ __________ __________ __________
Weighted
average number
of shares or
ADSs used for
computation of
income per
share:
Basic 49,590 65,940 65,159 65,954 65,940
___________ ___________ __________ __________ __________
Fully diluted 49,814 66,167 65,159 65,954 65,940
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR AND THREE MONTH PERIODS ENDED DECEMBER 31, 2011
(UNAUDITED)
Convenience
For the translation(A)
Year ended three months for the year
December ended December ended December
31, 31 31,
________________
2010 2011 2010 2011 2011
__________ _________ ________ ________ ____________
NIS U.S. dollars
_______________________________________________________
In thousands
_______________________________________________________
CASH FLOWS FROM
OPERATING
ACTIVITIES:
Income (loss)
before taxes on
income 98,896 140,301 7,161 (21,620) 36,718
Income tax (paid)
received, net 5,741 (79,368) 4,148 (18,315) (20,772)
Adjustments for
cash generated
from operations
(a) 101,192 566,664 (10,200) 181,377 148,303
__________ _________ ________ ________ ____________
Net cash provided
by operating
activities 205,829 627,597 1,109 141,442 164,249
__________ _________ ________ ________ ____________
CASH FLOWS FROM
INVESTING
ACTIVITIES:
Purchase of
property and
equipment (193,474) (261,101) (71,319) (46,842) (68,333)
Purchase of
investment
property (20,720) (55,524) (13,119) (13,058) (14,531)
Purchase of
intangible assets (34,133) (30,717) (12,067) (14,561) (8,039)
Proceeds from
collection
(realization) of
short-term
deposits and other
receivables, net 12,401 (5,858) 12,334 (493) (1,533)
Proceeds from sale
of property and
equipment 1,306 12,864 750 272 3,367
Proceeds from sale
of investment
property - 50,600 - - 13,243
Investment in
restricted
deposits - (102,603) - (4,294) (26,851)
Proceeds from sale
of marketable
securities 373,040 118,957 245,731 41,553 31,133
Investment in
marketable
securities (365,091) (122,646) (17,099) (51,247) (32,098)
Acquisition of
subsidiaries 87,219 - 87,219 - -
Acquisition of
equity accounted
investee - (36,415) - - (9,530)
Grant of loans to
jointly controlled
companies (31,442) (200) (4,053) - (54)
Collection (grant)
of loans to
controlling
shareholders - (144,962) - 10,201 (37,938)
Payments on
account of real
estate (76,884) (9,187) 827 (8,070) (2,404)
Collection of
long-term loans
receivable 1,565 22,885 1,565 16,047 5,989
Interest received 18,331 16,552 4,551 512 4,332
__________ _________ ________ ________ ____________
Net cash provided
by (used in)
investing
activities (227,882) (547,355) 235,320 (69,980) (143,247)
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR AND THREE MONTH PERIODS ENDED DECEMBER 31, 2011
(UNAUDITED)
Convenience
translation(A)
For the for the year
Year ended December three months ended December
31, ended December 31 31,
____________________
2010 2011 2010 2011 2011
__________ _________ _________ ________ _____________
NIS U.S. dollars
__________________________________________ _____________
CASH FLOWS FROM
FINANCING
ACTIVITIES:
Purchase of
treasury shares (4,295) (4,035) - - (1,056)
Dividend paid
to Company
shareholders (875,000) (75,000) (800,000) (75,000) (19,628)
Dividend paid
to non-
controlling
interests (17,619) (30,687) - (13,866) (8,031)
Repayment of
debentures (2,155) (174,955) (2,128) (34,206) (45,788)
Transactions
with
non-controlling
interests (7,362) (15,213) (7,362) (7,286) (3,982)
Issuance of
debentures 205,035 - 96,485 - -
Receipt of
long-term loans 470,600 213,648 465,100 81,101 55,914
Repayment of
long-term loans (165,014) (382,557) (65,417) (200,843) (100,119)
Repayment of
long term
credit from
payables (1,740) (1,750) (435) (465) (458)
Short-term
credit from
banks and
others,
net (52,404) 582,503 (152,695) 209,445 152,448
Receipt of
loans from
controlling
shareholders 90,000 - 90,000 - -
Proceeds from
exercise of
options in the
Company and a
subsidiary 759 140 - - 37
Settlement of
forward
contracts 21,248 - 21,248 - -
Interest paid (147,532) (222,754) (47,923) (52,782) (58,297)
__________ _________ _________ ________ _____________
Net cash
provided by
(used in)
financing
activities (485,479) (110,660) (403,127) (93,902) (28,960)
__________ _________ _________ ________ _____________
DECREASE IN
CASH AND CASH
EQUIVALENTS AND
BANK OVERDRAFTS (507,532) (30,418) (166,698) (22,440) (7,958)
Translation
differences on
cash and cash
equivalents (71) 37 6 35 10
BALANCE OF CASH
AND CASH
EQUIVALENTS AND
BANK
OVERDRAFTS AT
BEGINNING OF
PERIOD 611,734 104,131 270,823 96,155 27,252
__________ _________ _________ ________ _____________
BALANCE OF CASH
AND CASH
EQUIVALENTS AND
BANK
OVERDRAFTS AT
END OF
PERIOD 104,131 73,750 104,131 73,750 19,304
========== ========= ========= ========= ============
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR AND THREE MONTH PERIODS ENDED DECEMBER 31, 2011
(UNAUDITED)
Convenience
For the translation(A)
Year ended three months for the
ended December year ended
December 31 31 December 31,
___________________
2010 2011 2010 2011 2011
________ ________ _________ ________ ____________
NIS U.S. dollars
_________________________________________ ____________
Net cash
provided by
operating
(a) activities:
Adjustments
for:
Depreciation
and
amortization 206,945 273,746 70,578 70,158 71,642
Increase in
fair value of
investment
property, net (32,917) (41,913) (14,066) (13,781) (10,969)
Share in gains
(losses) of
associates,
net of
dividends
received 518 (5,309) (51) 407 (1,389)
Share based
payment 6,834 3,270 1,532 582 856
Loss from sale
and disposal
of property
and equipment,
net 5,962 2,448 4,319 2,319 641
Provision for
impairment of
property and
equipment and
intangible
assets 946 7,815 414 6,474 2,045
Loss (gain)
from changes
in fair value
of derivative
financial
instruments (8,029) (107,553) (9,884) 5,353 (28,148)
Linkage
differences on
monetary
assets,
debentures,
loans and
other long
term
liabilities 57,626 71,465 20,974 (8,914) 18,703
Employee
benefit
liability, net 2,371 177 3,043 (324) 46
Decrease
(increase) in
value of
investment in
securities,
deposits and
long-term
receivables,
net (15,013) 1,190 (11,959) (2,074) 312
Interest paid,
net 118,311 184,963 32,482 49,426 48,407
Changes in
operating
assets and
liabilities:
Decrease
(increase) in
trade
receivables
and other
accounts
receivable (53,264) 94,743 171,992 492,532 24,796
Increase in
advances from
purchasers of
apartments - 102,603 - 4,294 26,852
Increase
(decrease) in
trade payables
and other
accounts
payable 19,468 (10,198) (236,989) (427,743) (2,669)
Investment in
real estate
inventories (87,092) (5,637) 216 (720) (1,475)
Payments on
account of
real estate
inventories (71,564) (8,852) (1,212) (2,485) (2,317)
Decrease
(increase) in
inventories (49,910) 3,706 (41,589) 5,873 970
________ ________ _________ ________ ____________
101,192 566,664 (10,200) 181,377 148,303
======== ======== ========= ======== ============
Supplementary
information on
investing and
financing
activities not
involving cash
(b) flows:
Issuance of
shares upon
conversion of
convertible
debentures of
the Company 43,895 901 31,501 - 236
======== ======== ========= ======== ============
Purchase of
property and
equipment and
investment
properties on
credit 37,084 10,769 (16,059) 10,769 2,818
======== ======== ========= ======== ============
Advances from
customers
deposited in
restricted use
deposit 22,428 - 22,428 - -
======== ======== ========= ======== ============
Issue of
shares against
acquisition of
shares in
subsidiary 965,770 - 965,770 - -
======== ======== ========= ======== ============
Exercise of
options to
purchase
shares in
equity
accounted
investee - 154,434 - - 40,417
________ ________ _________ ________ ____________
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD
INTERIM CAPITALIZATION
AS OF DECEMBER 31, 2011
(Unaudited)
December 31
_________________________ Convenience
2010 2011 translation(A)
December 31, 2011
____________ ___________ _________________
NIS in thousands U.S. Dollars
_________________________ _________________
Alon Holdings
Cash and cash equivalents 1,901 3,819 999
Investment in securities 62,324 64,657 16,921 ____________ ___________ _________________
Total assets 64,225 68,476 17,921
============ =========== =================
Long- term debt:
Bank loans 241,488 280,213 73,335
Convertible debentures 10,329 - -
debentures 316,792 320,535 83,888
____________ ___________ _________________
Total long- term debt 568,609 600,748 157,223
============ =========== =================
Equity:
Equity attributable to
equity holders of the
company: 1,199,822 1,190,687 311,617
____________ ___________ _________________
Total debt, net (1,704,206) (1,722,959) (450,920)
____________ ___________ _________________
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
RECONCILIATION BETWEEN NET INCOME FOR THE PERIOD TO EBITDA
FOR THE YEAR AND THREE MONTH PERIODS ENDED DECEMBER 31, 2011
(UNAUDITED)
Convenience
translation(A)
for the
For the year
Year ended three months ended December
December 31, ended December 31 31,
________ _______ _______ ________
2010 2011 2010 2011 2011
________ _______ _______ ________ ____________
NIS U.S. dollars
____________________________________ ____________
In thousands
_____________________________________________________
Net income
(loss) for the
period 62,609 93,713 1,351 (56,073) 24,526
Taxes on income 36,287 46,588 5,810 34,453 12,192
Share in losses
of associates 518 (5,746) (58) 407 (1,504)
Finance
expenses, net 149,995 176,002 42,462 41,033 46,062
Other losses,
net 24,930 18,219 13,736 11,104 4,768
Increase in
fair value of
investment
property (32,917) (41,913) (14,060) (13,781) (10,969)
Depreciation
and
amortization 206,945 273,746 70,578 70,158 71,642
Share based
payment 6,834 3,270 1,532 582 856
________ _______ _______ ________ ____________
EBITDA 455,201 563,879 121,351 87,883 147,573
________ _______ _______ ________ ____________
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
FOR THE YEAR AND THREE MONTH PERIODS ENDED DECEMBER 31, 2011 (UNAUDITED)
Segment reporting
The Company includes segment information according to IFRS 8. Company's management has set the operating segments based on the internal reports.
The Company presents four reportable 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 December 31, 2011, Mega Retail
operated 211 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. As of December 31, 2011 Dor Alon
operates 196 fueling stations and 198 convenience stores. 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) -Mostly through its subsidiary, BEE Group Retail Ltd.
("BEE Group"), the Company is engaged in non-food retail and wholesale activities. As
of December 31, 2011, the Company operated 248 non-food retail outlets, mostly through
franchisees, with specialties in houseware and home textile, toys, leisure, and infant.
This segment also includes properties owned through Blue Square Real Estate ("BSRE")
which are used by the segment.
(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 in Tel Aviv.
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
FOR THE YEAR AND THREE MONTH PERIODS ENDED DECEMBER 31, 2011
(UNAUDITED)
Note 1 - Segment reporting (continued):
Non -
food Commercial
Retail and Total
and Real fueling
Supermarkets wholesale estate sites Adjustments consolidated
____________ _________ ______ ___________ ___________ ____________
NIS in thousands
__________________________________________________________________
Year ended
December 31,
2011
(unaudited)
Net segment
revenues 6,723,845 425,853 31,021 5,301,865 - 12,482,584
Inter
segment
revenues - 31,810 - 36,087 (67,897) -
Depreciation
and
amortization 159,601 12,011 - 96,130 6,004 273,746
Operating
profit
(loss)
before other
gains and
losses net
and changes
in fair
value, of
investment
property 177,346 (24,915) 15,395 173,680 (31,933) 309,573
Segment
profit 169,697 (35,382) 57,307 173,578 (31,933) 333,267
Unallocated
corporate
expenses (22,710)
Financial
expenses,
net (176,002)
Share in
gains of
associates,
net 5,746
___________
Income
before taxes
on income 140,301
___________
Non -
food Commercial
Retail and Total
and Real fueling
Supermarkets wholesale estate sites Adjustments consolidated
____________ _________ ______ ___________ ___________ ____________
NIS in thousands
__________________________________________________________________
Year ended
December 31,
2010
(audited)
Net segment
revenues 6,894,978 438,623 25,162 1,144,981 - 8,503,744
Inter
segment
revenues - 43,444 - 8,339 (51,783) -
Depreciation
and
amortization 163,020 15,156 - 27,328 1,441 206,945
Operating
profit
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
Segment
profit 232,944 (19,519) 28,073 39,335 (9,424) 271,409
Unallocated
corporate
expenses (22,000)
Financial
expenses,
net (149,995)
Share in
losses of
associates,
net (518)
Income
before taxes
____________
on income 98,896
============
Non -
food Commercial
Retail and Total
and Real fueling
Supermarkets wholesale estate sites Adjustments consolidated
____________ _________ ______ ___________ ___________ ____________
NIS in thousands
__________________________________________________________________
Three months
ended
December 31,
2011:
Net segment
revenues 1,647,696 82,934 9,081 1,299,707 - 3,039,419
Inter
segment
revenues - 3,929 - 12,231 (16,160) -
Depreciation
and
amortization 39,187 2,612 - 26,858 1,501 70,158
Operating
profit
(loss)
before other
gains
and losses
net and
changes in
fair value
of
investment
property 25,803 (17,777) 5,007 17,539 (8,301) 22,272
Segment
profit 19,387 (22,389) 18,787 17,465 (8,301) 24,949
Unallocated
corporate
expenses (5,129)
Financial
expenses,
net (41,033)
Share in
gains of
associates,
net (407)
____________
Loss before
taxes on
income (21,620)
____________
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
FOR THE YEAR AND THREE MONTH PERIODS ENDED DECEMBER 31, 2011
(UNAUDITED)
Non -
food Commercial
Retail and Total
and Real fueling
Supermarkets wholesale estate sites Adjustments consolidated
____________ _________ ______ ___________ ___________ ____________
NIS in thousands
__________________________________________________________________
Three months
ended
December 31,
2010:
Net segment
revenues 1,739,959 91,347 7,181 1,144,981 - 2,983,468
Inter
segment
revenues - 4,537 - 8,339 (12,876) -
Depreciation
and
amortization 36,723 5,086 - 27,328 1,442 70,579
Operating
profit
(loss)
before other
gains and
losses net
and changes
in fair
value of
investment
property 52,583 (20,442)(9,888) 42,936 (10,435) 54,754
Segment
profit 48,956 (26,958) 4,172 39,333 (10,745) 54,758
Unallocated
corporate
expenses (5,193)
Financial
expenses,
net (42,462)
Share in
gains of
associates,
net 58
____________
Income
before taxes
on income 7,161
============
Non -
food Commercial
Retail and Total
and Real fueling
Supermarkets wholesale estate sites Adjustments consolidated
____________ _________ ______ ___________ ___________ ____________
Convenience translation to U.S. dollar in thousands
__________________________________________________________________
Year ended
December 31,
2011
(unaudited)
Net segment
revenues 1,759,708 111,451 8,119 1,387,560 - 3,266,837
Inter
segment
revenues - 8,325 - 9,444 (17,769) -
Depreciation
and
amortization 41,769 3,143 - 25,158 1,571 71,642
Operating
profit
(loss)
before other
gains and
losses net
and changes
in fair
value of
investment
property 46,414 (6,520) 4,029 45,455 (8,357) 81,020
Segment
profit 44,412 (9,260) 14,998 45,427 (8,357) 87,220
Unallocated
corporate
expenses (5,944)
Financial
expenses,
net (46,062)
Share of
losses of
associates,
net 1,504
____________
Income
before taxes
on income 36,718
____________
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]
* The results of Dor Alon were included as of the fourth quarter of 2010.
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 effective October 3, 2010 in the results of Alon Holdings. Comparative data for 2010 include the results of Dor Alon in their entirly in this report in order to enable analysis and trends of the segment performance.
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.
SOURCE Alon Holdings Blue Square-Israel Ltd
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