Shikun & Binui Announces Financial Results for the Fourth Quarter & Full Year 2014

AIRPORT CITY, Israel, March 25, 2015 /PRNewswire/ -- Shikun & Binui Ltd. (TASE: SKBN.TA), a global construction and infrastructure company headquartered in Israel, reported today its financial results for the fourth quarter and full year ended December 31, 2014. Management will host a conference call tomorrow, March 26^th, to discuss the results, at 10am Eastern Time/4pm Israel Time. To participate, please dial: 1-888-407-2553 (US), 0-800-917-9141 (UK) or +972 3 918 0664 (International).

Management Comments

Mr. Moshe Lahmani, Chairman of the Board of the Shikun & Binui Group, commented, "2014 was a significant breakthrough year during which management continued to lead the Group to new achievements and to break into new activities in new regions, in line with our long-term strategic vision. These achievements reflect the superb quality of our human capital, which, together with our professionalism, skills, experience and expertise, are positioning us to compete successfully with the large global infrastructure companies."

Mr. Ofer Kotler, Shikun & Binui's CEO, commented, "2014 was a year in which we expanded our international operations, achieving initial penetration to the strategic US and Colombia markets while expanding our real estate operations significantly in Berlin. In fact, we now operate in approximately 20 countries globally, and in the year ahead we will continue expanding our international activities while deepening our presence in the US and other markets."

Mr. Tal Raz, Shikun & Binui's CFO, added, "Thanks to the Group's responsible management and long-term operating horizon, we were able to increase our net profit this year despite the extreme volatility in global foreign exchange markets."

Main Events During and Subsequent to the Reporting Period:

• SBI–Shikun & Binui Infrastructure, the Group's international building and infrastructure subsidiary:
  • First-ever Win in the US – Texas Express Lane Project (SH-288): on February 2, 2015, the company reported that a consortium in which it is a partner won a concessions tender (BOT) for the planning, construction, financing, operation and maintenance of express toll lanes and additional road infrastructure near Houston, Texas. This is the Group's first BOT project in the US. The project's construction phase is valued at approximately $800 million.
  • Winning of the Ajebendele-Shagamu Road Project in Nigeria: in December 2014, the company signed an agreement with the Government of Nigeria to pave the Ajebendele-Shagamu road. The project's construction phase is expected to take four years and is valued at approximately $400 million.
• Shikun & Binui Renewable Energy - Sale of Photo-Voltaic (PV) Installations: in October 2014, the company signed a sales agreement for its rights in photo-voltaic solar installations, with a 24MW electricity generating capacity. On December 31, 2014, the sale of the first 19MW was completed, generating NIS 65 million in pre-tax profit. On March 11, 2015, the sale of the remaining 5MW was completed, generating additional NIS 25 million in pre-tax profit.
• Shikun & Binui International Real Estate (RED) – ADO's Agreements to Purchase Properties in Berlin: 1) On January 5, 2015, a transaction was closed in which corporations held (60%) by ADO, in which the company held a 39% share as of the report date, and corporations within the Harel Group (40%) acquired residential properties in Berlin for NIS 615 million. 2) On December 19, 2014, ADO signed an agreement to acquire the rights to a portfolio of 5,800 residential units in Berlin for €400 million. As of the report date, the deal had not yet been completed.
• Shikun & Binui Israel Real Estate – Agreements to Sell Real Estate Properties and Land:
  • In September 2014, Shikun & Binui Real Estate signed an agreement to sell land in the North of Tel Aviv in Israel for NIS 81 million, and on December 2, 2014 the sale was completed, generating approximately NIS 80 million in pre-tax profit.
  • On December 16, 2014, Shikun & Binui Real Estate completed the sale of an office building for NIS 57 million, generating approximately NIS 31 million in pre-tax profit.
  • In August 2014, Shikun & Binui Real Estate signed an agreement to sell real estate in Israel for NIS 106 million. After the report date, the sale was completed, generating approximately NIS 20 million pre-tax profit that is expected to be recorded in future financial reports.  

Main Events During the Full Year 2014:

• First win in Colombia – Financing, Construction and Operation of Toll Road (Cundinamarca): on July 23, 2014, the company announced that a consortium in which it is a partner won a Colombian Government tender to build a toll road on a BOT basis. The value of the overall project is estimated at US$ 550 million. This is the company's first win in Colombia. SBI, the Group's international infrastructure subsidiary, will take part in the project's execution. As of the date of this release, the company holds 75% of the Project construction and concession rights.  
• Main financial activities:
  • On April 3, 2014, the company issued Series 7 debentures totaling NIS 274 million, and on June 2, 2104, the company issued Series 7 debentures totaling NIS 53 million.  
  • On May 8, 2014, the company carried out an exchange offer, replacing short-term Series 4 debentures with a par value of NIS 587 million with long-term Series 6 debentures with a par value of NIS 698 million.
  • Cancellation of Commitment to List Shikun & Binui Real Estate: on June 3, 2014, the company announced that it had signed an agreement cancelling its commitment to institutional investors to list the shares of Shikun & Binui Real Estate for trade. Under the terms of the agreement, the company allocated 1.2% (before allocation) of Shikun & Binui Real Estate's shares at face value (approximately NIS 4 million) to these institutional investors and paid them NIS 7 million in cash. In the company's financial reports, the transaction was recorded as a NIS 36 million expense before tax. 
  • Closing of Elcon Transaction: on February 6, 2014, the company completed an acquisition of 30% of the shares of Elcon, a company that specializes in the treatment of complex industrial wastewater. In the company's financial reports, the transaction was recorded as a NIS 42 million investment.
  • Ma'aleh Gilboa Transaction: on January 2, the company completed rights purchase transactions for the Pumped Storage project in Ma'aleh Gilboa, Israel. In the company's financial reports, the transaction was recorded as a NIS 98 million investment. On June 12, 2014, financial agreements for the project were signed, and on June 26, 2014, the financial institutions made their first payments to the Concessionaire.

Sale and Delivery of Apartments in Israel:

• Infrastructure Order backlog: as of December 31, 2014, the company's order backlog totaled NIS 11.2 billion, an increase of approximately NIS 0.8 billion compared with December 31, 2013. Of this backlog, NIS 8.1 billion is in respect of international activities
• Dividend: on March 25, 2015, the Company's Board of Directors declared a dividend distribution totaling NIS 75 million.  

Financial Results for Full-Year 2014:

Revenues: the Group's 2014 revenues totaled NIS 6,169 million compared with NIS 6,370 million in 2013, a 3% decline. The decrease derived primarily from a NIS 234 million decline in the revenues of the International Building and Infrastructure segment (as detailed in the Segment section below), and a NIS 198 million decline in the Israel Real Estate segment (due primarily to a NIS 213 million reduction in revenues from apartment sales, as detailed in the Segment section below). In addition, the Renewable Energy segment recorded a NIS 155 million decrease (due primarily to a reduced number of photo-voltaic installations) and the Concessions segment recorded a NIS 52 million decrease due to the completion of the construction phase of the North Road's Upgrade project in Israel and the beginning of its operational phase. These declines were countered by a NIS 155 revenue increase posted by the Israel Building & Infrastructure segment, as well as a NIS 56 million increase posted by the International Real Estate segment, related primarily to an increase in the number of apartments sold in projects in Poland.

Gross profit: the Group's gross profit for 2014 totaled NIS 1,063 million (17.2% of revenues) compared with NIS 1,095 million (17.2% of revenues) in 2013.

Sales and marketing expenses: the Group's 2014 sales and marketing expenses totaled NIS 31 million, a 22.5% decrease compared to NIS 40 million in 2013. The decline was primarily due to the company's alignment of advertising and sales expenditures with the prevailing uncertainty of the Israeli residential real estate market.

General and administrative expenses: the Group's 2014 general and administrative expenses rose by NIS 35 million compared with 2013 to NIS 384 million. The increase was driven mainly by a rise in executive compensation costs (the granting of blocked shares of stock) totaling NIS 13 million. General and administrative expenses were also impacted by an increase in consulting expenses, countered partially by a reduction in the cost of participating in mega-tenders in Israel and throughout the world.

Other expenses, net: the Group's other expenses, net, in 2014 totaled NIS 69 million, compared with NIS 122 million in other income, net, for 2013. Other income, net, for 2013 included the NIS 55 million profit generated by the cancellation of a sale to the Ramat Gan Municipality, Israel, in the first quarter of 2013, which resulted in a cancellation payment received by the company, and the NIS 63 million profit generated from the sale of the company's share in Derech Eretz (highway 6 concessionaire) that was recorded in the third quarter of 2013. In the second quarter of 2014, the company recorded NIS 22 million in income to account for the release of a provision taken previously to cover a potential debt after the obligation was cancelled following an arbitration process in the Republic of Benin. In addition, in October 2014, the company recorded NIS 65 million in pre-tax profit from the sale of photo-voltaic installations with 19MW total generating capacity. This income was countered by a NIS 38 million pre-tax expense recorded during the second quarter of 2014 for the cancellation of the company's commitment to publicly list the shares of Shikun & Binui Real Estate, as stipulated in the framework agreement signed with institutional investors.

Operating income: the Group's operating profit for 2014 totaled NIS 754 million compared with NIS 840 million in 2013. The NIS 87 million decrease derived primarily from a NIS 69 million decline in the operating profit of the Israel Real Estate segment, of which NIS 38 million was due to the cancellation of the listing commitment, as explained above, while operating income for 2013 benefitted from the NIS 55 million gain that derived from the abovementioned cancellation of the land deal with the Ramat Gan Municipality and the NIS 63 million gain from the sale of the company's share in Derech Eretz. This was countered partially by a NIS 62 million increase in the operating profit of the Renewable Energy segment, which derived primarily from the NIS 65 million capital gain generated from the abovementioned photo-voltaic installation sale. In addition, the International Real Estate segment recorded a NIS 52 million increase in operating income compared with 2013, due to the provision it took in 2013 for the impairment of property values in Hungary.

Financing expenses, net: the Group's 2014 financing expenses, net, totaled NIS 157 million, compared with NIS 163 million in 2013. The decrease derived primarily from: 1) a 0.1% decline in the Consumer Price Index (CPI) during 2014 compared with 2013, in which the CPI increased by 1.9%, resulting in a NIS 72 million decrease in the costs of CPI-linked credit; 2) a decline in the Israeli Prime Rate, which reduced long-term financing costs of unlinked debentures by NIS 3 million; and 3) a NIS 21 million decline in the redemption and exchange of previously-issued series of debentures with other debentures carrying a lower rate of interest. This was countered partially by a NIS 22 million increase in debenture interest expense as a result of the higher volume of issued debentures, and an additional rise of NIS 14 million in financing expenses related to bridge loan transactions.

Taxes on income: the Group's 2014 taxes on income totaled NIS 155 million compared with NIS 198 million in 2013. The improvement was due primarily to the International Real Estate segment, which recorded a NIS 46 million decline in tax expense during the year, which reflected the benefit of a NIS 25 million tax refund received during the period.

Net profit (loss) of consolidated companies: net profit of consolidated companies for 2014 totaled NIS 15 million compared with a net loss of NIS 86 million recorded in 2013. The NIS 101 million increase derived primarily from: 1) the NIS 35 million loss recorded in 2013 in respect of the Glitz revaluation; 2) the NIS 18 million profit recorded by the Concessions segment in 2014 compared with the NIS 17 million net loss it posted during 2013; and 3) the NIS 34 million net loss generated by the International Real Estate segment due to the effect of changes in the Euro/shekel exchange rate.

Net profit: the Group's net profit for 2014 totaled NIS 457 million, a 16.2%  compared with NIS 393 for 2013, reflecting the factors detailed above.

Cash flow: the Group's cash flow from ongoing activities during 2014 totaled NIS 306 million compared with NIS 719 million in 2013. The decrease derived primarily from an increase in customer balances for contract work completed, a decline in apartment sales and an increase in taxes.

Financial Results for the Fourth Quarter of 2014:

Revenues: the Group's revenues for the fourth quarter of 2014 totaled NIS 1,728 million compared with NIS 1,705 million for the fourth quarter of 2013, an increase of NIS 23 million. The increase derived primarily from a NIS 29 million rise in revenues from the Israel Real Estate Development segment (as detailed in the Segment section below), countered partially by a NIS 68 million decline in the International Building and Infrastructure segment due to a reduction in project execution activities, including primarily the completion of the Uganda project. In addition, the Israel Building and Infrastructure segment recorded a NIS 58 million reduction due primarily to reduced revenues from the Building Division (approximately NIS 36 million) and the Concrete Division (approximately NIS 31 million).

Gross profit: the Group's gross profit for the fourth quarter of 2014 totaled NIS 313 million (18.1% of revenues) compared with NIS 262 million (15.4% of revenues) in 2013. The increase was due primarily to a NIS 70 million rise in the gross profit of the Israel Real Estate segment, reflecting the abovementioned sale of a land parcel in North Tel Aviv. In addition, the International Construction and Infrastructure segment recorded NIS 41 million gross profit during the fourth quarter of 2014, while in the equivalent period of 2013, as mentioned above, it recorded a loss due to the impairment provision taken. In contrast, the International Real Estate segment recorded a NIS 64 million decline in gross profit during the quarter due to its reduced activities in Uganda.

General and administrative expenses: the Group's general and administrative expenses in the fourth quarter of 2014 increased by NIS 7 million compared with the same period in 2013, totaling NIS 104 million. The increase was driven mainly by an increase in executive compensation costs (the granting of blocked shares of stock) and consulting costs, countered by the decrease in the cost of participating in mega-tenders in Israel and throughout the world.

Operating income: the Group's operating profit for the fourth quarter of 2014 totaled NIS 316 million compared with NIS 163 million in the parallel period of 2013, an increase of NIS 153 million. This derived primarily from the NIS 103 million increase in the operating profit generated by the Israel Real Estate segment, reflecting its NIS 70 million increase in gross profit during the period compared with the parallel quarter of 2013, coupled with the NIS 30 million profit that it recorded from the sale of investment properties. The Renewable Energy segment contributed operating income of NIS 66 million as a result of the capital gain from its sale of photo-voltaic installations, and the operating income of the International Real Estate segment for the fourth quarter increased by NIS 49 million, reflecting the impairment provision that it had taken in the fourth quarter of 2013. In contrast, the International Building and Infrastructure segment recorded a NIS 40 million reduction in operating income due to its reduced gross profit in the quarter compared with its level in the fourth quarter of 2013.

Net financing expenses: the Group's financing expenses, net, in the fourth quarter of 2014 totaled NIS 27 million compared with NIS 13 million in the fourth quarter of 2013. Financing expenses for the period included NIS 61 million of interest paid on long-term credit, countered partially by NIS 10 million in interest income from loans granted to consolidated subsidiaries, NIS 11 million in income from customers and Concessions agreements, and NIS 22 million for changes in the fair market value of financial instruments.

Taxes on income: the Group's taxes on income during the fourth quarter of 2014 totaled NIS 69 million compared with NIS 55 million in the fourth quarter of 2013. The increase reflected a NIS 32 million rise in the tax expense of the Israel Real Estate segment due to its rise in gross profit during the reporting period, countered partially by a reduction in international tax expense due to tax refunds.

Net profit: the Group's net profit for the fourth quarter of 2014 totaled NIS 214 million compared with NIS 82 million for the parallel period of 2013, reflecting the factors detailed above.

Cash flow: the Group's cash flow from ongoing activities for the fourth quarter of 2014 totaled NIS 186 million compared with NIS 360 for the fourth quarter of 2013. The decrease was primarily due to an increase in customer balances and a decline in entitlements.

Financial Highlights By Segment (NIS millions)

International Construction and Infrastructure segment:
2014 revenues for the International Construction and Infrastructure segment totaled NIS 2,647 million compared with NIS 2,880 million for 2013. The NIS 234 million decrease reflected: 1) a NIS 70 million decline related to the slowing of work in Uganda and a NIS 20 million decline related to the slowing of work in Tanzania as both these projects progressed towards completion; 2) the completion of work on projects in Guatemala and Ghana; and 3) the erosion of the dollar exchange rate, which decreased by 1.1% during the year compared to its average value in 2013, reducing revenues by NIS 30 million. This was countered partially by an increase in revenues from Nigeria and the receipt of initial revenues from Togo. For the fourth quarter, the segment's revenues totaled NIS 654 million compared to NIS 723 in the parallel quarter of 2013, a NIS 68 million decline that derived from the completion of work in Uganda, offset partially by the rise in the dollar exchange rate between the two periods, which contributed NIS 53 million.

The segment's 2014 gross profit totaled NIS 550 million (21% of the segment's revenues) compared with NIS 602 million (21% of the segment's revenues) for 2013. From the NIS 52 million decline, NIS 8 million derived from the decrease in the average dollar exchange rate during the two periods, together with the completion of projects, as detailed above. The segment's gross profit for the fourth quarter of 2014 totaled NIS 104 million (16% of the segment's revenues) compared with NIS 168 million (23% of the segment's revenues) for the fourth quarter of 2013, a NIS 64 million decline that derived primarily (approximately NIS 26 million) from a decline in building activities, primarily in Uganda and Tanzania. The segment's operating profit for 2014 totaled NIS 440 million (17% of the segment's income) compared with NIS 455 million (16% of the segment's income) for 2013. In the fourth quarter of 2014, the segment's operating income decreased by NIS 40 million from NIS 125 million (17% of the segment's revenues) to NIS 85 million (13% of the segment's revenues), due primarily to the decline in gross profit, as detailed above.

During the fourth quarter, the segment was awarded a new project in Nigeria (the Ajebendele-Shagamu road) with an estimated value of approximately NIS 400 million.

Israel Real Estate segment:

2014 revenues for the Israel Real Estate segment totaled NIS 1,264 million compared with NIS 1,462 million in 2013, a NIS 198 decrease that derived primarily from a NIS 213 million reduction in apartment sale revenues. In 2014, the company populated 738 apartments at an average price of NIS 1.25 million (excluding VAT) per apartment, as compared to 807 apartments during 2013 at an average price of NIS 1.4 million (excluding VAT) per apartment. In addition, the segment recorded a NIS 63 million revenue reduction from non-residential projects due to the inclusion in its 2013 revenues of the sale of half its rights in the 7^th Heaven Mall and all of its rights in the Ramat Aviv Gimel commercial center and the filling station in Beer Sheva, while in 2014 the segment's revenues included only the sale of a land parcel in Rishon Letzion. Also included in the segment's 2014 results were NIS 43 million in revenues related to the completion of the building of a portion of the Student Dormitory project in Tel Aviv and their transition to the operational phase. This was countered by a NIS 111 million increase in sales of lots and land parcels, reflecting primarily the NIS 81 million sale of the land parcel in North Tel Aviv, and other land sales totaling NIS 30 million. Segment revenues for the fourth quarter of 2014 totaled NIS 467 million compared with NIS 438 for the fourth quarter of 2013, an increase that reflects primarily the aforementioned sale of land in North Tel Aviv, offset partially by the reduced number of apartments delivered during the period and a reduced average apartment price. During the fourth quarter of 2014, the segment populated 227 apartments compared with 319 in the fourth quarter of 2013. In parallel, due to a shift in the mix of apartments sold, the average price of apartments populated during the reporting period increased compared with the parallel period of 2013.

The segment's 2014 gross profit totaled NIS 341 million (27% of segment sales) compared with NIS 343 million (23% of sales) in 2013. The decrease in gross profit reflected the change in the mix of apartments sold during the period, while the increase in gross margin reflected primarily the land sale in North Tel Aviv. For the fourth quarter of 2014, the segment's gross profit totaled NIS 155 million (33% of segment sales) compared with NIS 85 million (19% of segment sales) for the fourth quarter of 2013, a NIS 70 million increase that derived from the land sale in North Tel Aviv. The segment's operating profit for 2014 totaled NIS 252 million (20% of segment sales) compared with NIS 321 million (22% of segment sales) in 2013, a NIS 69 million decline.

During the reporting period, the segment recorded a NIS 38 million expense for the cancellation of its commitment to list the shares of Shikun & Binui Real Estate, as compared with the fourth quarter of 2013, in which the company recorded a one-time profit of NIS 55 million for the cancellation of the land sale in Ramat Gan. The segment's operating profit for the fourth quarter of 2014 totaled NIS 162 million (35% of segment sales) compared to NIS 58 million (13% of segment sales) in the fourth quarter of 2013. The NIS 103 million increase derived primarily from the segment's increase in gross profit, as detailed above, and from a NIS 30 million increase in profit from the sale of investment properties.

Israel Construction and Infrastructure segment:
2014 revenues for the Israel Construction and Infrastructure segment totaled NIS 2,109 million compared with NIS 1,954 million in 2013, a NIS 155 million increase that derives from: 1) a NIS 74 million increase in the activities of the segment's Roads Division (from its Road 6 expansion project and its highway grade separation project in Acre); and 2) a NIS 81 million increase in building activities related primarily to its building projects in Ashdod, Kiryat Arba (IKEA Center) and Beit Shemesh (Police Department Training Center). For the fourth quarter of 2014, segment revenues totaled NIS 500 million compared with NIS 558 million in the fourth quarter of 2013. The NIS 58 million reduction was primarily due to a NIS 36 million decrease in Building Division activities and a NIS 31 million decrease in revenues from the Concrete Division.

The segment's 2014 gross profit totaled NIS 115 million compared with NIS 112 million in 2013, with the gross margin unchanged at 5.5%. Operating profit for 2014 totaled NIS 38 million (2.0% of segment sales) compared with NIS 48 million (2.0% of segment sales) for the fourth quarter of 2013.  

Renewable Energy segment:
Revenues of the Renewable Energy segment for 2014 totaled NIS 116 million compared with 231 NIS million in 2013, a NIS 115 million decline that was due primarily to a reduction in the number of photo-voltaic installations built. The installations are accounted for as "financial assets" whose construction expenses are recorded as revenues. During 2013, the Company built PV installations at a relatively quicker rate. During the fourth quarter of 2014, the segment's revenues totaled NIS 26 million compared with NIS 25 million in the fourth quarter of 2013.

The segment's gross profit for 2014 totaled NIS 36 million (31% of segment revenues) compared with NIS 50 million (22% of segment revenues) in 2013. The segment's gross profit derives primarily from PV installations, which have a relatively high gross margin. Gross profit for the fourth quarter of 2014 totaled NIS 6 million compared with NIS 8 million for the parallel period of 2013. The segment's 2014 operating profit totaled NIS 73 million (63% of segment revenues) compared with NIS 11 million (25% of segment revenues) for 2013, an increase which derived primarily from the NIS 65 million capital gain generated from the sale of PV installations. Operating profit for the fourth quarter of 2014 totaled NIS 66 million, reflecting the abovementioned capital gain.

Concessions segment:
For the Concessions segment, 2014 revenues totaled NIS 86 million compared with NIS 106 million in 2013, a decline of NIS 20 million related primarily to the completion of the construction phase of the BOT North Road Upgrade and Maintenance Project and its transition to the operational phase. The segment's revenues for the fourth quarter of 2014 totaled NIS 45.5 million compared to NIS 7.5 million in the fourth quarter of 2013.

The segment's gross profit for 2014 totaled NIS 15 million, unchanged from 2013, reflecting primarily work conducted on the North Roads Upgrade project. The segment's operating profit for 2014 totaled NIS 6 million compared with NIS 3 million in 2013.

International Real Estate segment:
2014 revenues for the International Real Estate segment totaled NIS 70 million compared with NIS 14 million in 2013. The NIS 56 million increase derived primarily from an increase in the number of apartments sold in the project in Poland. Revenues for the fourth quarter of 2014 totaled NIS 63 million, unchanged from their level during the fourth quarter of 2013.

The segment's gross profit for 2014 totaled NIS 16 million compared to a loss of NIS 28 million in 2013, which was due primarily to the provision taken in respect of the impairment of value of properties in Hungary. The segment recorded a NIS 41 million increase in gross profit in the fourth quarter of 2014 as compared with the fourth quarter of 2013 due to the aforementioned provision taken in 2013. The segment's operating profit for 2014 totaled NIS 3 million compared to a NIS 50 million operating loss in 2013, an increase of NIS 53 million.

About the Shikun & Binui Group
The Shikun & Binui Group is a global construction and infrastructure company that operates in Israel and internationally in seven segments: 1) infrastructure and construction contracting outside of Israel; 2) infrastructure and construction contracting within Israel; 3) real estate development within Israel; 4) real estate development outside of Israel; 5) renewable energy; 6) concessions; and 7) water. The Group's activities focus on large, highly complex projects carried out for entities in private and public sectors with a focus on sustainability.

This summary announcement was prepared solely for the convenience of the reader and does not replace Shikun & Binui Ltd.'s (hereafter – "the Company") full report.  The information contained in this announcement is, by its nature, incomplete. All of its contents are provided as a supplement to the Company's report, and are subject to the declarations therein stated.  This announcement includes forecasts, assessments, estimates and other information relating to the Company or its subsidiaries, or to other parties or to future events and matters, the extent of whose realization is not certain and is not under the sole control of the Company (forward-looking information, as defined in the Securities Law-1968).  The key facts and data serving as the basis for this information are facts and data, among others, related to the current status of the Company and its businesses, facts and data relating to the current status of the operating segments in which the Company engages in its areas of operation, and other macroeconomic facts and data known to the Company on the preparation date of this presentation.

It is understood that forward-looking information does not constitute a fact and is based solely on subjective assessments.  Forward-looking information is uncertain and for the most part, is not under the Company's control.  The realization or non-realization of the forward-looking information will be influenced, among others, by the risk factors that characterize the Company's operations, as well as developments in the general environment and external factors that impact the Company's operations.  The Company's future results and achievements could differ significantly from those presented in this presentation.  The Company is not obligated to update or modify the said forecast or assessment, and is not obligated to update this announcement.  This announcement does not constitute an offer to purchase the Company's securities or an invitation to receive such offers.  An investment in securities in general, and in the Company in particular, carries risk.  One must take into account that past data do not necessarily indicate future performance.

SOURCE Shikun & Binui Ltd.