Alon Holdings Blue Square - Israel Ltd. Announces Financial Results for the First Half and Second Quarter of 2011
ROSH HA'AYIN, Israel, Aug. 25, 2011 /PRNewswire/ -- Alon Holdings Blue Square-Israel Ltd. (NYSE and TASE: BSI) today announced its financial results for the first half and second quarter ended June 30, 2011.
Highlights:
- As a result of the inclusion of the results of Dor Alon, the Company's sales in the first half of 2011 amounted to NIS 6,216 million (U.S. $1,820.2 million) (increase of 73%) and the operating profit amounted to NIS 211 million (U.S. $61.8 million) (increase of 49% compared to the comparable period last year).
- In the Supermarket segment the same store sales (SSS) in the first half of 2011 increased by 2.7%[1] compared to the comparable period last year. In the second quarter of 2011 the same store sales increased by 6.7%[1] compared to the comparable quarter last year mainly due to the timing of the Passover holiday. Without the impact of the Passover holiday, the increase in sales in the SSS was 4.0%.
- Dor Alon's operating profit increased by 13% in the first half of 2011 compared to the comparable period last year.
- In the second quarter BSRE recorded a gain from revaluation of a property in Kiryat Hasharon, Netanya in the amount of NIS 15 million (U.S. $4.4 million). After the balance sheet date, BSRE completed the sale of half of its rights in the property.
- During the second quarter the Company and Dor Alon signed an update to the agreement to purchase 49% of Diners. The agreement was consummated on July 1, 2011. The Company recorded in the second quarter of 2011 an income from revaluation of option in the amount of NIS 70 million (U.S. $20.5 million) before taxes.
- The net income increased by 88.1% this half year amounted to NIS 109.5 million (U.S. $32.1 million).
KEY FIGURES for the first half and the second quarter compared to the comparable periods last year (the statements of Dor Alon were consolidated for the first time in the fourth quarter of 2010):
The 4-6 The
1-6 1-6 rate of rate of
Data in NIS (millions) 2010 2010 change 4-6 2010 2011 change
Net revenues 3,599 6,216 72.7% 1,769 3,208 81.3%
Gross profit 1,027 1,481 44.3% 513 752 46.6%
Rate of gross profit 28.5% 23.8% - 29% 23.4% -
Operating income
(before other gains
and losses and changes
in fair value of
investment property) 135 198 46.4% 62 106 71%
Rate of operating
profit 3.8% 3.2% - 3.5% 3.3% -
Financial expenses,
net 57 56 (1.7%) 42 15 (64.3%)
Net income for the
period 58 110 88.1% 21 72 242.9%
Results for the First Half of 2011(2)
Gross revenues
Revenues (including government levies) for the first half of 2011 were NIS 7,599.5 million(U.S. $2,225.3 million), compared to NIS 3,599.5 million in the first half of 2010 ─ an increase of 111.1 %. The main increase in revenues was due to the inclusion of the results of Dor Alon. Dor Alon's revenues in the first half, including government levies of NIS 1,383.9 million (U.S. $405.2 million) amounted to NIS 3,975.0 million (U.S. $1,164.0 million).
Revenues from sales, net
Supermarkets segment revenues - in the first half of 2011 amounted to NIS 3,403.0 million (U.S. $996.5 million) as opposed to NIS 3,364.5 million in the first half of 2010, an increase of 1.1%. The increase in revenues was mainly due to an increase in same stores sales at a rate of 1.7% and due to the net opening of 3 stores this year.
Revenues of the Commercial and Fueling sites segment in the first half of 2011 amounted to NIS 2,576.5 million (U.S. $754.5 million) as compared to NIS 2,070.1 million in the first half of 2010[3], an increase of 24.5%. 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.
Non-food segment - a decrease in revenues of approximately 1.3% from NIS 224.2 million in the first half of 2010 to NIS 221.4 million (U.S. $64.8 million) in the first half of 2011. The decrease in revenues was mainly due to a decrease in sales to franchisees in the leisure and houseware area due to increased competition in the sector.
Real estate segment -the main increase in revenues of approximately 36.8% in the rental fee income from NIS 10.8 million in the first half of 2010 to NIS 14.7 million (U.S. $4.3 million) in the first half of 2011. The increase in revenues is mainly due to the increase in leased premises.
Gross Profit in the first half of 2011 amounted to approximately NIS 1,481.5 million (U.S. $ 433.8 million) (approximately 23.8% of revenues) compared to gross profit of approximately NIS
1,026.7 million (28.5% of revenues) in the first half of 2010. Excluding the effect of Dor Alon's results, the gross profit increased by NIS 13.4 million (U.S. $4.0 million).
The increase in the gross profit is mainly due to an increase in sales of the supermarkets segment (the gross operating profit amounted to 27.6% in the present half compared to 27.3% in the first half of 2010) and an increase in the revenues of the real estate segment and was partly offset by a decrease in sales and the gross profit rate in the Non-food segment.
Selling, General, and Administrative Expenses in the first half of 2011 amounted to approximately NIS 1,283.7 million (U.S. $ 375.9 million) compared to NIS 891.6 million in the first half of 2010, an increase of 44.0%.
Excluding the effect of Dor Alon's results the selling, general and administrative expenses increased by NIS 32.3 million (U.S. $9.5 million). The main increase was recorded in the Supermarkets segment in expenses of same stores and was mainly due to an increase in rental fees affected by the change in CPI and updating lease agreements, increase in municipal taxes and increase in payroll expenses due to an increase in "Mega@Internet" activity and was partly offset by a decrease in advertising expenses.
Operating profit (before other gains and losses and increase in the fair value of investment property) in the first half of 2011 amounted to approximately NIS 197.8 million (U.S. $ 57.9 million) compared to operating income of NIS 135.1 million in the first half of 2010, an increase of 46.4%.
Excluding the effect of Dor Alon's results the operating profit (before other gains and losses and changes in fair value of investment property) decreased by NIS 18.9 million (U.S. $5.5 million). The decrease in the operating profit was mainly due to increase in selling, general and administrative expenses in the Supermarkets segment and the decrease in sales in the Non-food segment.
Increase in fair value of investment property In the first half of 2011, the Company recorded profit from the increase in the value of investment property in the amount of NIS 19.4 million (U.S. $ 5.7 million) including NIS 17 million (U.S. $ 5.0 million) from revaluation of property in Kiryat Hasharon, Netanya, half of which was sold after the balance sheet date, compared to NIS 13.2 million in the first half of 2010.
Other income and expenses, net in the first half of 2011 the Company recorded other expenses, net in the amount of NIS 6.3 million (U.S. $ 1.8 million)compared to net expenses of NIS 7.1 million in the first half of 2010. These expenses included costs relating to the relocation of part of BEE group companies to the distribution center in Beer Tuvia and disposal of property and equipment.
Operating profit in the first half of 2011 was NIS 210.9 million (U.S. $ 61.8 million) compared to operating profit of NIS 141.1 million in the first half of 2010, an increase of 49.4%. Excluding the effect of Dor Alon's results the operating profit decreased by NIS 11.6 million (U.S. $ 3.4 million).
Financial Expenses, Net for the first half of 2011 were NIS 55.9 million (U.S. $16.4 million) compared to financial expenses, net of NIS 56.7 million in the first half of 2010. Excluding the effect of the results of Dor Alon the finance expenses decreased by NIS 18.9 million (U.S. $5.5 million). The decrease was mainly a result of finance income from the revaluation of the option to purchase shares of Diners in the amount of approximately NIS 101.5 million and capitalization of borrowing costs of projects under construction in the real estate segment and 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 the first half of 2011 by 2.16% compared to increase of 0.38% in the comparable period last year).
Taxes on Income for the first half of 2011 were approximately NIS 46.8 million (U.S. $13.7 million) (29.9% effective tax rate compared to a statutory tax rate of 24%) compared to NIS 25.7 million (effective tax rate of 30.6% compared to a statutory tax rate of 25%) in the first half of 2010.
Net Income in the first half of 2011 was NIS 109.5 million (U.S. $ 32.1 million) compared to net income of NIS 58.2 million in the comparable period last year. The net income for the first half of 2011 attributable to the equity holders of the company was NIS 94.9 million (U.S. $27.8 million), or NIS 1.44 per share (U.S. $ 0.42), while the portion attributable to the non-controlling interests was NIS 14.5 million (U.S. $4.3 million).
Cash Flows in the First Half of 2011
Cash Flows from Operating Activities: Net cash flows deriving from operating activities in the first half of 2011 amounted to NIS 434.5 million (U.S. $127.2 million) compared to cash flows from operating activities of NIS 85.8 million in the first half of 2010. The inclusion of Dor Alon's results contributed to the cash flow from operating activities in the first half of 2011 the amount of NIS 58.9 million.
The increase in cash flows from operating activities is mainly due to a decrease in working capital in the Supermarket segment and from the increase in advances from purchasers of apartments of NIS 95.4 million.
Cash Flows from Investing Activities: Net Cash flows used in investing activities in the first half of 2011 amounted to approximately NIS 300.3 million (U.S. $87.9 million) compared to net cash flows of NIS 376.9 million used in investing activities in the first half of 2010. Cash flows used in investing activities in the first half of 2011 included mainly purchases of property and equipment, investment property and intangible assets, in a total amount of NIS 176.6 million, the grant of short term loans of NIS 62.3 million, mainly to controlling shareholders and investment in restricted deposits in the amount of NIS 95.4 million. Cash flows used in investing activities in the first half of 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 151.1 million and a net investment in marketable securities of NIS 216.9 million, the grant of a loan of NIS 18.9 million to a proportionally consolidated company.
Cash Flows from Financing Activities: Net Cash flows used in financing activities in the first half of 2011 amounted to NIS 124.9 million (U.S. $36.6 million) compared to net cash flow used in financing activities of NIS 58.2 million in the first half of 2010. Cash flows used in financing activities in the first half of 2011 included mainly repayment of bonds in the amount of NIS 138.5 million, repayment of loans in the amount of NIS 126.1 million, and the payment of interest in the amount of NIS 110.3 million, this was offset by an increase in short term bank credit in the amount of NIS 169.9 million and increase in loans received in the amount of NIS 109.5 million. Net Cash flows used in financing activities in the first half of 2010 included mainly repayment of long term loans of NIS 73.4 million, the payment of interest of NIS 58.5 million, payment of dividends of NIS 75 million to the Company's shareholders and NIS 17.6 million to the non-controlling interests and acquisition of treasury shares of NIS 4.3 million. This was offset by an increase in short term credit, net in the amount of NIS 166.3 million.
Comments of Management
Commenting on the financial results, Mr. David Weisman Active Chairman and Chief Business manager – " the results of the first half of the year are characterized by a positive contribution of the organizational change in which the food chain "Mega" and the Fuel chain "Dor Alon" operate under one "umbrella". Another contribution is to the profitability is the exercise of the option into a full holding of 49% in Diners, which among others, strengthens the customers' club YOU having already over 500,000 customers and doing it successfully.
Recently, the ministry of finance and the ministry of infrastructures announced on their intention to reduce the marketing margin of fuels at 20 Agorot per liter.
"Analysis of the price of diesel fuel reveals that in the period from January 2005 to January 2011 the excise tax has increased sharply at a nominal rate of 306.6% or at a real rate of 245.1%" (the research and information center of the Knesset).
This extreme increase in the excise tax in the diesel fuel price is a material component in the cost of fuels and food in Israel in addition to the given situation where the tax rate on fuels amounts to more than 50% of the fuel price in the fueling stations.
These days, out of the public eye, the ministry of finance increases again the excise tax at the beginning of September and announced on a further increase at the beginning of October!.
This action will diminish any competition in the energy sector and ignores the economic project of the ministry of infrastructures that partly supports the increase in marketing margin.
We initiate measures against the authorities and intend to take our action to the courts to prevent this irresponsible measure of the ministry of finance".
In regards to the supermarkets and non-food segments, Mr. Zeev Vurembrand, CEO, said: the first half of 2011 was characterized by increased competition in the retail food segment by accelerated opening of commercial spaces and converting branches into cheap formats. Toward the end of the first half, a public protest broke out, which one of its implications is showing in July and August a decline in sales in the supermarkets segment. It is premature to estimate this impact.
In the first half, the scope of commercial spaces did not increase in the supermarkets segment compared with last year, among others, from concluding 4 lease agreements of 4 branches that were transferred to the competitors' operations. We are implementing a strategy of maintaining a market share while taking measures for operating efficiency measures.
The multi annual development plan of branches will be reflected in the next two years with the opening of approximately 30 branches in a total area of some 27 thousand sq.m. Most of the branches are in the neighborhood format of Mega in the City. Until the end of 2011, we plan to open stores with a total area of some 10 thousand sq.m.
These days, we are about to complete a novel plan to attract club customers to the credit card channel, where we intend to double the number of customers in this track in two years. This plan will reflect the relative advantages of Alon Holdings Group in Blue Square.
The private brand represents 11% of the total chain's sales and enables to offer a cheaper basket. Today, when we are on the verge of regulatory change as a result of the public protest, we have the knowledge and the experience to lead product development, which will enable to reduce the price for the consumers, on one hand and improve the ability to compete and the profitability of the chain.
Bee group completed in the second quarter the relocation of all Bee group companies to the new Non - food distribution center in Beer Tuvia. The results of the second quarter of 2011 included the relocation expenses. In addition the Company prepares to absorb in this distribution center the entire logistic activity of the Non - Food segment of Mega thereby completing the consolidation of this area into one distribution center.
In the past quarter, the Company completed the transfer of Dr. Baby activity of Bee group to Mega Retail, where we intend to develop the Company's activity by opening 20 selling corners in Mega branches all over the country and utilize the exposure of the brand and its products to young families subscribed to the customers club.
Results for the second quarter of the year 2011
Gross Revenues (including government levies)for the second quarter of 2011 were NIS 3,890.0 million(U.S. $1,139.1 million) compared to revenues of approximately NIS 1,768.7 million in the comparable quarter last year, an increase of 119.9 %. The majority of the increase in revenues derives from including the results of Dor Alon. Excluding the effect of Dor Alon's results the revenues this quarter increased by NIS 111.1 million (U.S. $ 32.5 million) compared to the comparable quarter last year.
The increase in the revenues compared to the comparable quarter last year is mainly due to the timing of the Passover holiday, which fell this year on April 19 compared to March 29 last year. The Passover sales in the Non-food and Supermarket segment were mainly included in the second quarter this year whereas last year results were mainly included in the first quarter.
Supermarket segment revenues- an increase in revenues of 5.5% from NIS 1,674.6 million in the second quarter of 2010 to NIS 1,766.5 million (U.S. $517.3 million) in the current quarter. The increase in revenues was mainly due to an increase in same store sales (SSS) at a rate of 5.7% was mainly derived from the timing of the Passover holiday, as aforesaid.
Revenues of the Commercial and Fueling sites segment for the second quarter of 2011 amounted to NIS 1,328.3 million (U.S. $388.9 million) as compared to NIS 721.5 million in the comparable quarter of 2010. The increase in revenues derives from the same reasons described in the analysis of the first half of 2011 results.
Non - Food segment revenues - an increase in revenues of 18.7% from NIS 88.7 million in the second quarter of 2010 to NIS 105.3 million (U.S. $30.8 million) in the current quarter. The increase mainly derived from the timing of the Passover holiday.
Real Estate segment revenues - rental fees from external parties of NIS 5.3 million in the second quarter of 2010 compared to NIS 8.4 million (U.S. $2.5 million) in the current quarter due to the increase in leased premises.
Gross Profit of the second quarter of 2011 amounted to approximately NIS 752.0 million (U.S. $ 220.2 million) compared to gross profit of approximately NIS 513.0 million in the comparable quarter of 2010. Excluding the effect of Dor Alon's results, gross profit increased by NIS 16.1 million (U.S. $ 4.7 million). The increase in the gross profit mainly derives from an increase in sales of the Supermarkets segment and Non - food segment and was partly offset by decrease in the gross profit rate mainly in the Supermarkets segments due to the Passover timing (the gross profit rate amounted to 27.2% in the current quarter compared to gross profit rate of 28.2% in the comparable quarter last year).
Selling, General and Administrative Expenses in the second quarter of 2011 amounted to NIS 646.0 million (U.S. $ 189.2 million) compared to approximately NIS 450.5 million in the comparable quarter, an increase of approximately 43.4%. Excluding the effect of Dor Alon's results, selling, general and administrative expenses increased by NIS 14.0 million (U.S. $ 4.1 million), The majority of the increase was recorded in the Supermarkets segment in the same stores expenses and derived mainly from the same reasons described above in the analysis of the first half of 2011 results.
Operating Profit (before other gains and losses and increases in the fair value of investment property) in the second quarter of 2011 amounted to NIS 106.0 million (U.S. $ 31.0 million) compared to NIS 62.5 million in the second quarter of 2010, an increase of 69.7%. Excluding the effect of Dor Alon's results, operating profit(before other gains and losses and increases in the fair value of investment property) increased by NIS 2.1 million (U.S. $ 0.6 million).
Increase in the Fair Value of Investment Property In the second quarter of 2011, the Company recorded gain from appreciation of investment property in the amount of NIS 16.4 million (U.S. $ 4.8 million) including NIS 16 million (U.S. $ 4.7 million) from revaluation of property in Kiryat Hasharon in Netanya, half of which was sold after the balance sheet date, compared to NIS 10.9 million in the comparable quarter last year.
Other income and expenses, Net In the second quarter of 2011, the Company recorded other expenses, net of NIS 4.4 million (U.S. $ 1.3 million), compared to net expenses of NIS 5.9 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, the disposal of the property and equipment.
Operating Profit amounted to approximately NIS 118.1 million (U.S. $ 34.6 million) compared to operating profit of NIS 67.5 million in the second quarter of 2010. Excluding the effect of Dor Alon's results, Operating Profit increased by NIS 9.1 million (U.S. $ 2.7 million). The majority of the increase derives from the increase in sales as a result of the Passover holiday, as described above, and an increase in revenues from Real estate segment due to revaluation gains and was partly offset by an increase in selling, general and administrative expenses.
Financial Expenses, net, for the second quarter of 2011 were NIS 15.2 million (U.S. $4.5 million) compared to financial expenses, net of NIS 42.3 million in the comparable quarter last year. The decrease in financial expenses, net in this quarter compared to the same quarter last year was mainly due to changes in the value of Diners option that contributed this quarter an income of NIS 70 million (U.S. $20.4 million). The decrease in financial expenses was mainly offset from increase of the Company's indebtedness following the purchase of Dor Alon and the increase of the CPI (the CPI increased in the second quarter of 2011 by 1.27% compared to an increase of 1.34% in the comparable period last year).
Taxes on Income for the second quarter of 2011 amounted to NIS 31.1 million (U.S. $9.1 million) (effective tax rate of 30.2% compared to a statutory tax rate of 24%) compared to tax expenses of NIS 4.1 million (effective tax rate of 16.3% compared to a statutory tax rate of 25%) in the corresponding quarter last year.
Net Income for the second quarter of 2011 amounted to NIS 71.8 million (U.S. $ 21.0 million) compared to a net income of NIS 21.1 million in the second quarter of 2010. The increase in the net income in this quarter compared to the corresponding quarter last year derived mainly from including the results of Dor Alon and the effect of Diners option on financial expenses, net and the taxes on income. The net income for the second quarter of 2011 attributable to equity holders of the Company, was NIS 64.9 million (U.S. $19.0 million), or NIS 0.99 per share (U.S. $ 0.29), while the portion attributable to the non-controlling interests was NIS 6.9 million (U.S. $2.0 million).
Cash Flows in the second quarter of 2011
Cash Flows from Operating Activities: Net cash flows provided by operating activities, amounted to NIS 218.4 million (U.S. $ 63.9 million) in the second quarter of 2011 compared to NIS 64.3 million in the comparative quarter last year. The increase in cash flows from operating activities was mainly due to the increase in the pre-tax income and decrease in the purchases of real estate inventories.
Cash Flows from Investing Activities: Net Cash flows used in investing activities in the second quarter of 2011 amounted to NIS 83.9 million (U.S. $24.6 million) compared to net cash flows of NIS 327.5 million from investing activities in the corresponding quarter of the previous year. The cash flows used in investing activities in the second quarter of 2011 mainly included the purchase of property and equipment, intangible assets investment property of NIS 85.8 million (U.S. $25.1 million), investments in restricted deposits of NIS 8.1 million (U.S. $2.4 million), and investment in short term deposits, net in the amount of NIS 3.2 million (U.S. $0.9 million) and was offset by interest received amounting to NIS 7.7 million (U.S. $2.2 million). Cash used in investing activities in the second quarter of 2010 mainly included the purchase of property and equipment, intangible assets investment property and payments on account of real estate in a total amount of NIS 112.3 million and net investment in marketable securities of NIS 200.7 million.
Cash Flows used in Financing Activities: Net Cash flows from financing activities amounted to NIS 135.1 million (U.S. $ 39.6 million) in the second quarter of 2011 as compared to net cash from financing activities of NIS 4.8 million in the corresponding quarter last year. Cash flows from financing activities in the second quarter of 2011 included mainly repayment of bonds of NIS 136.3 million (U.S. $39.9 million), repayment of long term loans of NIS 66.6 million (U.S. $19.5 million) and interest paid of NIS 54.6 million (U.S. $16.0 million), net of long term loans received of NIS 107.0 million (U.S. $31.3 million), change in short term credit of NIS 32.7 million (U.S. $9.6 million). Cash flows from financing activities in the second quarter of 2010 included mainly an increase in short term credit net in the amount of NIS 58.6 million net of the repayment of long term loans amounting to NIS 34.8 million and interest paid of NIS 19.8 million.
Additional Information
1. As of June 30, 2011, the Company operated 209 supermarkets divided as follows: Mega In Town -118; Mega Bool - 62; Mega - 6; Shefa Shuk - 12; Eden Teva Market -15 of which 4 Eden within Mega. Dor Alon operated - 193 fueling stations and 191 convenience stores and in the non-food segment, the Company operated 263 branches (some franchised).
2. EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization)[4] in the first half of 2011 was NIS 335.5 million (U.S. $ 98.3 million) (5.4% of revenues) compared to NIS 226.3 million (6.3% of revenues) in the first half of 2010.
EBITDA in the second quarter of 2011 was NIS 174.7 million (U.S. $ 51.2 million) (5.4 % of revenues) compared to NIS 108.6 million (6.1% of revenues) in the corresponding quarter of 2010.
3. Diners Transaction
In May 2011, Alon Holdings and Dor Alon (thereafter - the buyers) and Cal (thereafter - Cal) signed an update of the agreement to purchase 49% of Diners held by Cal at the 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 second quarter income before taxes of approximately NIS 70 million.
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 June 30, 2011: U.S. $1.00 equals NIS 3.415. 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 209 supermarkets under different formats, each offering a wide range of food products, "Near Food" products and "Non-Food" products at varying levels of service and pricing. In its "Non-Food" segment, Alon Holdings, through its 100% subsidiary BEE Group Retail Ltd., operates specialist outlets in self operation and franchises and offers a wide range of "Non-Food" products as retailer and wholesaler. In the Commercial and Fueling Sites segment, through its 78.38% subsidiary, which is listed on the Tel Aviv stock exchange ("TASE"), Dor Alon Energy in Israel (1988) Ltd is one of the four largest fuel retail companies in Israel based on the number of petrol stations and a leader in the field of convenience stores. Dor Alon operates a chain of 193 petrol stations and 191 convenience stores in different formats in Israel. In its Real Estate segment, Alon Holdings, through its TASE traded 78.26% subsidiary Blue Square Real Estate Ltd., owns, leases and develops yield generating commercial properties and projects.
This press release contains forward-looking statements within the meaning of safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, plans or projections about our business and our future revenues, expenses and profitability. Forward-looking statements may be, but are not necessarily, identified by the use of forward-looking terminology such as "may," "anticipates," "estimates," "expects," "intends," "plans," "believes," and words and terms of similar substance. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual events, results, performance, circumstance and achievements to be materially different from any future events, results, performance, circumstance and achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, the following: the effect of the recession in Israel on the sales in our stores and on our profitability; our ability to compete effectively against low-priced supermarkets and other competitors; quarterly fluctuations in our operating results that may cause volatility of our ADS and share price; risks associated with our dependence on a limited number of key suppliers for products that we sell in our stores; the effect of an increase in the minimum wage in Israel on our operating results; the effect of any actions taken by the Israeli Antitrust Authority on our ability to execute our business strategy and on our profitability; the effect of increases in oil, raw material and product prices in recent years; the effects of damage to our reputation or to the reputation of our store brands due to reports in the media or otherwise; and other risks, uncertainties and factors disclosed in our filings with the U.S. Securities and Exchange Commission (SEC), including, but not limited to, risks, uncertainties and factors identified under the heading "Risk Factors" in our 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 JUNE 30, 2011
Convenience
translation(A)
December 31, June 30, June 30,
2010 2010 2011 2011
Audited Unaudited
NIS U.S. dollars
In thousands
Assets
CURRENT ASSETS:
Cash and cash equivalents 125,956 262,517 125,637 36,790
Investment in securities 310,237 431,786 291,867 85,466
Short-term deposits 98,084 - 95,203 27,878
Trade receivables 1,731,747 795,925 1,794,772 525,555
Other accounts receivable 162,599 83,406 299,299 87,643
Derivative financial
instruments - 9,051 - -
Assets classified as held for
sale - - 54,210 15,874
Income taxes receivable 64,094 69,994 89,374 26,171
Inventories 680,296 537,341 684,983 200,581
3,173,013 2,190,020 3,435,345 1,005,958
NON-CURRENT ASSETS:
Investments in associates 6,012 4,302 7,376 2,160
Derivative financial
instruments 56,078 13,818 159,328 46,655
Real estate inventories 83,337 83,342 86,498 25,329
Payments on account of real
estate 164,132 - 174,529 51,107
Investments in securities 30,327 - 29,128 8,529
Loans receivable, net of
current maturities 176,043 - 143,068 41,894
Property and equipment, net 2,928,515 1,975,758 2,936,440 859,865
Investment property 546,870 447,517 536,438 157,083
Intangible assets, net 1,486,744 410,593 1,468,148 429,912
Other long-term receivables 47,098 117,605 152,008 44,512
Deferred taxes 66,018 40,541 68,401 20,030
5,591,174 3,093,476 5,761,362 1,687,076
Total assets 8,764,187 5,283,496 9,196,707 2,693,034
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF JUNE 30, 2011
Convenience
translation(A)
June 30,
December 31, June 30,
2010 2010 2011 2011
NIS U.S. dollars
Audited Unaudited
In thousands
Liabilities and equity
CURRENT LIABILITIES:
Credit and loans from banks
and others 470,284 308,866 632,273 185,145
Current maturities of
debentures and convertible
debentures 202,769 76,235 140,980 41,283
Current maturities of
long-term loans from banks 297,771 118,920 338,039 98,987
Trade payables 1,342,763 960,840 1,432,815 419,565
Other accounts payable and
accrued expenses 686,447 499,513 793,308 232,303
Customers' deposits 30,405 - 28,265 8,277
Derivative financial
instruments 7,700 - 6,724 1,969
Income taxes payable 7,431 24 2,253 660
Provisions 71,870 44,274 73,042 21,389
3,117,440 2,008,672 3,447,699 1,009,578
NON CURRENT LIABILITIES:
Long-term loans from banks
and others, net of current
maturities 1,399,159 541,528 1,362,958 399,109
Convertible debentures, net
of current maturities 117,801 132,334 119,101 34,876
Debentures, net of current
maturities 2,183,093 1,261,208 2,140,119 626,682
Other liabilities 199,983 22,526 266,159 77,938
Derivative financial
instruments 9,151 6,241 11,328 3,317
Liabilities in respect of
employee benefits, net of
amounts funded 51,492 47,728 52,809 15,464
Deferred taxes 103,929 56,345 137,892 40,378
4,064,608 2,067,910 4,090,366 1,197,764
Total liabilities 7,182,048 4,076,582 7,538,065 2,207,342
EQUITY:
Equity attributable to
equity holders of the
Company:
Ordinary shares of NIS 1 par
value 79,712 58,443 79,878 23,390
Additional paid-in capital 1,218,409 1,056,986 1,219,282 357,037
Other reserves (12,539) 8,024 (22,355) (6,546)
Accumulated earnings
(deficit) (85,760) (103,740) 6,945 2,033
1,199,822 1,019,713 1,283,750 375,914
Non - controlling interests 382,317 187,201 374,892 109,778
Total equity 1,582,139 1,206,914 1,658,642 489,692
Total liabilities and equity 8,764,187 5,283,496 9,196,707 2,693,034
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX AND THREE MONTHS PERIODS ENDED JUNE 30, 2011
For the
Year ended six months
December ended June 30
31,
2010 2010 2011
Audited Unaudited
NIS
In thousands (except per share data)
Revenues 9,227,453 3,599,487 7,599,468
Less - government levies 723,709 - 1,383,885
Net revenues 8,503,744 3,599,487 6,215,583
Cost of sales 6,192,352 2,572,775 4,734,112
Gross profit 2,311,392 1,026,712 1,481,471
Selling, general and
administrative expenses 2,069,970 891,642 1,283,690
Operating profit before
other gains and losses
and changes in fair
value of investment
property 241,422 135,070 197,781
Other gains 3,258 1,419 1,000
Other losses (28,188) (8,528) (7,284)
Changes in fair value of
investment property, net 32,917 13,187 19,445
Operating profit 249,409 141,148 210,942
Finance income 85,852 20,077 131,314
Finance expenses (235,847) (76,786) (187,265)
Finance expenses, net (149,995) (56,709) (55,951)
Share of loss of
associates (518) (576) 1,317
Income before taxes on
income 98,896 83,863 156,308
Taxes on income 36,287 25,656 46,805
Net income 62,609 58,207 109,503
Attributable to:
Equity holders of the
Company 47,839 47,725 94,947
Non - controlling
interests 14,770 10,482 14,556
Earnings per ordinary
share or ADS attributed
to equity holders of the
Company
Basic 0.96 0.91 1.44
Fully diluted 0.96 0.91 1.41
Weighted average number
of shares or ADSs used
for computation of
income per share:
Basic 49,590 44,282 65,925
Fully diluted 48,814 44,835 66,395
Convenience
translation
For the (A) for the
three months six months
ended June 30, ended June
30,
2010 2011 2011
Unaudited
NIS U.S. dollars
In thousands (except per share data)
Revenues 1,768,663 3,890,000 2,225,320
Less - government levies - 681,536 405,237
Net revenues 1,768,663 3,208,464 1,820,083
Cost of sales 1,255,705 2,456,471 1,386,270
Gross profit 512,958 751,993 433,813
Selling, general and
administrative expenses 450,472 645,959 375,898
Operating profit before
other gains and losses
and changes in fair
value of investment
property 62,486 106,034 57,915
Other gains 463 - 293
Other losses (6,341) (4,375) (2,133)
Changes in fair value of
investment property, net 10,913 16,390 5,694
Operating profit 67,521 118,049 61,769
Finance income 14,769 86,313 38,452
Finance expenses (57,050) (101,523) (54,836)
Finance expenses, net (42,281) (15,210) (16,384)
Share of loss of
associates (4) 104 386
Income before taxes on
income 25,236 102,943 45,771
Taxes on income 4,123 31,114 13,706
Net income 21,113 71,829 32,065
Attributable to:
Equity holders of the
Company 18,969 64,959 27,803
Non - controlling
interests 2,144 6,870 4,262
Earnings per ordinary
share or ADS attributed
to equity holders of the
Company
Basic 0.43 0.99 0.42
Fully diluted 0.42 0.95 0.41
Weighted average number
of shares or ADSs used
for computation of
income per share:
Basic 44,590 66,947 65,925
Fully diluted 44,976 66,253 66,395
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX AND THREE MONTHS PERIODS ENDED JUNE 30, 2011
Year For the
ended six months
December ended June 30,
31,
2010 2010 2011
Audited Unaudited
NIS
In thousands
CASH FLOWS FROM
OPERATING ACTIVITIES:
Income before taxes on
income 98,896 83,863 156,308
Income tax (paid)
received, net 5,741 (7,972) (40,626)
Cash provided by
operating activities (a) 101,192 9,971 318,828
Net cash provided by
operating activities 205,829 85,862 434,510
CASH FLOWS FROM
INVESTING ACTIVITIES:
Purchase of property and
equipment (193,474) (80,590) (135,312)
Purchase of investment
property (20,720) (3,641) (32,859)
Purchase of intangible
assets (34,133) (13,341) (8,476)
Proceeds from collection
of short-term deposits
and other receivables,
net 12,401 67 2,881
Proceeds from sale of
property and equipment 1,306 52 11,383
Investment in restricted
deposits - - (95,406)
Proceeds from sale of
marketable securities 373,040 116,340 48,424
Investment in marketable
securities (365,091) (333,292) (46,800)
Acquisition of
subsidiaries 87,219 - -
Grant of loans to
jointly controlled
companies (31,442) (18,933) -
Grant of loans to main
shareholder - - (62,342)
Payments on account of
real estate (76,884) (53,466) -
Collection of long-term
loans receivable 1,565 - 5,114
Interest received 18,331 9,860 13,082
Net cash provided by
(used in) investing
activities (227,882) (376,944) (300,311)
Convenience
translation(A)
For the for the
three months six months
ended June 30 ended June 30,
2010 2011 2011
Unaudited
NIS U.S. dollars
In thousands
CASH FLOWS FROM
OPERATING ACTIVITIES:
Income before taxes on
income 25,236 102,943 45,771
Income tax (paid)
received, net (23,684) (20,946) (11,896)
Cash provided by
operating activities (a) 62,793 136,487 93,361
Net cash provided by
operating activities 64,345 218,484 127,236
CASH FLOWS FROM
INVESTING ACTIVITIES:
Purchase of property and
equipment (49,329) (69,778) (39,623)
Purchase of investment
property (3,299) (12,518) (9,622)
Purchase of intangible
assets (6,222) (3,483) (2,482)
Proceeds from collection
of short-term deposits
and other receivables,
net - (3,226) 844
Proceeds from sale of
property and equipment 52 293 3,333
Investment in restricted
deposits - ( 8,129) (27,937)
Proceeds from sale of
marketable securities 71,891 28,822 14,180
Investment in marketable
securities (272,606) (25,128) (13,704)
Acquisition of
subsidiaries - - -
Grant of loans to
jointly controlled
companies (18,933) - -
Grant of loans to main
shareholder - (609) (18,255)
Payments on account of
real estate (53,466) - -
Collection of long-term
loans receivable - ( 2,087) 1,498
Interest received 4,439 7,743 3,831
Net cash provided by
(used in) investing
activities (327,473) (83,926) ( 87,937)
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX AND THREE MONTHS PERIODS ENDED JUNE 30, 2011
For the
Year ended six months
December 31, ended June 30,
2010 2011
Audited Unaudited
In thousands NIS
CASH FLOWS FROM FINANCING
ACTIVITIES:
Purchase of treasury shares (4,295) (4,295) (4,035)
Dividend paid to Company
shareholders (875,000) (75,000) -
Dividend paid to non-
controlling interests (17,619) (17,619) (16,821)
Repayment of debentures (2,155) (27) (138,559)
Transactions with
non-controlling interests
without loss of control 17,195 - -
Issuance of debentures 205,035 - -
Receipt of long-term loans 470,600 4,500 109,547
Repayment of long-term
loans (165,014) (73,409) (126,110)
Repayment of long term
credit from payables (1,740) (870) (870)
Short-term credit from
banks and others, net (52,404) 166,273 169,990
Receipt of loans from
controlling shareholders 90,000 - -
Proceeds from exercise of
options in the Company and
a subsidiary 759 716 140
Acquisition of shares from
non-controlling interests (24,557) - (7,927)
Settlement of forward
contracts 21,248 - -
Interest paid (147,532) (58,486) (110,348)
Net cash provided by (used
in) financing activities (485,479) (58,217) (124,993)
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS AND
BANK OVERDRAFTS (507,532) (349,299) 9,206
Translation differences on
cash and cash equivalents (71) 82 (2)
BALANCE OF CASH AND CASH
EQUIVALENTS AND BANK
OVERDRAFTS AT BEGINNING OF
PERIOD 611,734 611,734 104,131
BALANCE OF CASH AND CASH
EQUIVALENTS AND BANK
OVERDRAFTS AT END OF PERIOD 104,131 262,517 113,335
Convenience
translation(A)
For the for the
three months six months
ended June 30 ended June 30,
2010 2011 2011
Unaudited
In thousands NIS U.S. dollars
CASH FLOWS FROM FINANCING
ACTIVITIES:
Purchase of treasury shares - (82) (1,182)
Dividend paid to Company
shareholders - - -
Dividend paid to non-
controlling interests (3,321) (16,821) (4,926)
Repayment of debentures (27) (136,254) (40,574)
Transactions with
non-controlling interests
without loss of control - - -
Issuance of debentures - - -
Receipt of long-term loans 4,500 107,000 32,078
Repayment of long-term
loans (34,773) (66,551) (36,928)
Repayment of long term
credit from payables (435) (435) (255)
Short-term credit from
banks and others, net 58,583 32,669 49,777
Receipt of loans from
controlling shareholders - - -
Proceeds from exercise of
options in the Company and
a subsidiary 86 16 41
Acquisition of shares from
non-controlling interests - - (2,321)
Settlement of forward
contracts - - -
Interest paid (19,840) (54,637) ( 32,313)
Net cash provided by (used
in) financing activities 4,773 (135,095) ( 36,603)
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS AND
BANK OVERDRAFTS (258,355) (537) 2,696
Translation differences on
cash and cash equivalents 82 10 -
BALANCE OF CASH AND CASH
EQUIVALENTS AND BANK
OVERDRAFTS AT BEGINNING OF
PERIOD 520,790 113,862 30,492
BALANCE OF CASH AND CASH
EQUIVALENTS AND BANK
OVERDRAFTS AT END OF PERIOD 262,517 113,335 33,188
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX AND THREE MONTHS PERIODS ENDED JUNE 30, 2011
For the
Year ended six months
December 31, ended June 30,
2010 2010 2011
Audited Unaudited
NIS
In thousands
Net cash provided by
(a) operating activities:
Adjustments for:
Depreciation and
amortization 206,945 87,291 135,872
Increase in fair value of
investment property, net (32,917) (13,187) (19,445)
Share in gains (losses)
of associates net of dividends
paid 518 576 (880)
Share based payment 6,834 3,901 1,878
Loss from sale and disposal
of property and equipment,
net 5,962 867 612
Provision for impairment of
property and equipment, net 946 369 1,305
Loss (gain) from changes in
fair value of derivative
financial instruments (8,029) 556 (103,525)
Linkage differences on
monetary assets, debentures,
loans and other long term
liabilities 57,626 10,626 69,427
Employee benefit liability,
net 2,371 206 1,318
Decrease (increase) in value
of investment in securities,
deposits and long-term
receivables, net (15,013) (1,567) 2,353
Interest paid, net 118,311 48,626 84,109
Changes in operating assets
and liabilities:
Investment in real estate
inventories (87,092) (82,485) (4,100)
Payments on account of real
estate inventories (71,564) (39,188) (3,674)
Decrease (increase) in trade
receivables and other
accounts receivable (53,264) (6,733) (136,030)
Decrease (increase) in
inventories (49,910) (22,483) (4,687)
Increase in advances from
purchasers of apartments - - 95,406
Increase (decrease) in trade
payables and other accounts
payable 19,468 22,596 198,889
101,192 9,971 318,828
TABLE CONT'D
Convenience
translation(A)
For the for the
three months six months
ended June 30 ended June 30
2010 2011 2011
Unaudited
NIS U.S. dollars
In thousands
Net cash provided by
(a) operating activities:
Adjustments for:
Depreciation and
amortization 44,086 67,934 39,787
Increase in fair value of
investment property, net (10,913) (16,390) (5,694)
Share in losses of
associates - (104) (258)
Share based payment 2,000 764 550
Loss from sale and disposal
of property and equipment,
net 719 1,259 179
Provision for impairment of
property and equipment, net 245 928 382
Loss (gain) from changes in
fair value of derivative
financial instruments (2,468) (77,328) (30,315)
Linkage differences on
monetary assets, debentures,
loans and other long term
liabilities 22,690 41,077 20,330
Employee benefit liability,
net (1,128) 545 386
Decrease (increase) in value
of investment in securities,
deposits and long-term
receivables, net (2,195) 873 689
Interest paid, net 15,401 39,649 24,629
Changes in operating assets
and liabilities:
Investment in real estate
inventories (82,485) (2,117) (1,201)
Payments on account of real
estate inventories (39,188) (2,609) (1,076)
Decrease (increase) in trade
receivables and other
accounts receivable 301,282 187,684 39,833
Decrease (increase) in
inventories 13,607 66,869 (1,373)
Increase in advances from
purchasers of apartments - 9,314 27,937
Increase (decrease) in trade
payables and other accounts
payable (198,860) (181,861) 58,242
62,793 136,487 93,361
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX AND THREE MONTHS PERIODS ENDED JUNE 30, 2011
Convenience
translation(A)
Year ended For the For the for the
December six months three months six months
31, ended ended ended
June 30, June 30 June 30,
2010 2010 2011 2010 2011 2011
Audited Unaudited
NIS U.S. dollars
In thousands
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 12,394 901 - 901 264
Purchase of
property and
equipment and
investment
properties on
credit 37,084 12,338 (11,432) 12,338 (5,562) (3,347)
Advances from
customers
deposited in
restricted use
deposit 22,428 - (21,673) - (316) (6,346)
Issue of shares
against
acquisition of
shares in
subsidiary 965,770 - - - - -
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
SELECTED OPERATING DATA
FOR THE SIX AND THREE MONTH PERIOD ENDED JUNE 30, 2011
(UNAUDITED)
Convenience
translation(A)
for the three
For the six For the three months ended
months ended months ended
June 30, June 30, June 30,
2010 2011 2010 2011 2011
NIS U.S.$
Gross revenues (in
millions) 3,600 7,599 1,769 3,890 1,139
Net revenues (in millions) 3,600 6,216 1,769 3,209 939
Operating profit before
other gains and losses and
changes in fair value of
investment property (in
millions) 135 198 62 106 31
EBITDA (in millions) 226 336 109 175 51
EBITDA margin 6.3% 5.4% 6.1% 5.4% N.A
Decrease in same store
sales (S.S.S) (2.1%) 1.7% (5.2%) 5.7% N.A
Number of stores at end of
period 206 209 206 209 N.A
Stores opened during the
period 4 4 1 - N.A
Stores closed during the
period 1 1 1 - N.A
Total square meters
selling area at end of
period 369,900 369,600 369,900 369,600 N.A
Square meters added
(reduced) during the
period, net* 4,900 3,400 (200) - N.A
Sales per square meter 9,248 9,160 4,591 4,824 1,413
Sales per employee (in
thousands) 497 481 249 252 74
Openings - square meters 6,400 4,150 1,200 - N.A
Closings - square meters (1,500) (750) (1,400) - N.A
Net openings 4,900 3,400 (200) - N.A
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
RECONCILIATION BETWEEN NET INCOME FOR THE PERIOD TO EBITDA
FOR THE SIX AND THREE MONTHS PERIODS ENDED JUNE 30, 2011
(UNAUDITED)
Convenience
translation(A)
For the For the for the
Year
ended six months three months six months
December ended June
31, 30, ended June 30 ended June 30,
2010 2010 2011 2010 2011 2011
NIS U.S. dollars
In thousands
Net income for
the period 62,609 58,207 109,503 21,113 71,829 32,065
Taxes on income 36,287 25,656 46,805 4,123 31,114 13,706
Finance expenses,
net 149,995 56,709 55,951 42,281 15,216 16,384
Share in losses
of associates 518 576 (1,317) 4 (104) (386)
Other losses, net 24,930 7,109 6,284 5,878 4,375 1,840
Increase in fair
value of
investment
property (32,917) (13,187) (19,445) (10,913) (16,390) (5,694)
Depreciation and
amortization 206,945 87,291 135,872 44,086 67,934 39,787
Share based
payment 6,834 3,901 1,878 2,000 764 550
EBITDA 455,201 226,262 335,531 108,572 174,732 98,252
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
FOR THE SIX AND THREE MONTHS PERIODS ENDED JUNE 30, 2011
(UNAUDITED)
Note 1 - Segment reporting
The Company includes segment information according to IFRS 8. The Company's chief operating decision maker reviews the Company's internal reports in order to evaluate performance and allocate resources. 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 June 30, 2011, Mega Retail operated 209 supermarkets. This segment also includes properties owned through Blue Square Real Estate ("BSRE"), in connection with the supermarket operation of Mega Retail's stores (including warehouses and offices).
2. Commercial and fueling sites - Through its subsidiary Dor-Alon the Company is engaged in the development, construction and operation of vehicle fueling stations, adjacent commercial centers and independent convenience stores, marketing of fuel products and other products through the fueling stations and convenience stores and direct marketing of distillates to customers. The commercial and fueling sites segment is presented according to the published financial statements of Dor-Alon, with reclassification of credit card fees and with the amortization of the excess of cost arising at the time of acquisition allocated to the reconciliation between the operating profit of the segment and the total operating profit.
3. Non-food (Retail and Wholesale) –Mostly through its subsidiary, BEE Group Retail Ltd. ("BEE Group"), the Company is engaged in non-food retail and wholesale activities. As of June 30, 2011, the company operated 263 non-food retail outlets, mostly through franchisees, with specialties in houseware and home textile, toys, leisure, and infant.
4. Real Estate - Through its subsidiary BSRE the Company is engaged in generating yield from commercial centers, logistics centers and offices, land for the purpose of capital appreciation and deriving long-term yield as well as in the development of the "Wholesale Market" residency project.
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
FOR THE SIX AND THREE MONTHS PERIODS ENDED JUNE 30, 2011
(UNAUDITED)
Note 1 - Segment reporting (continued):
Non - food
Retail and
Supermarkets wholesale Real estate
NIS in thousands
Six months ended June
30, 2011:
Net segment revenues 3,402,999 221,374 14,713
Inter segment
revenues - 20,367 -
Depreciation and
amortization 80,181 6,871 -
Operating profit
(loss) before other
gains
and losses net and
changes in fair value
of investment
property 117,601 (1,622) 6,303
Segment profit 116,288 (6,527) 25,749
Unallocated corporate
expenses
Financial expenses,
net
Share in losses of
associates,
net
Income before taxes
on income
TABLE CONT'D
Commercial
and fueling Total
sites Adjustments consolidated
NIS in thousands
Six months ended June 30,
2011:
Net segment revenues 2,576,497 6,215,583
Inter segment revenues 14,608 (34,975) -
Depreciation and
amortization 45,818 3,002 135,872
Operating profit (loss)
before other gains
and losses net and changes
in fair value
of investment property 100,973 (13,818) 209,437
Segment profit 100,908 (13,818) 222,600
Unallocated corporate
expenses
Financial expenses, net (11,658)
Share in losses of
associates, (55,951)
net 1,317
Income before taxes on
income 156,308
Non -
food
Retail
and
Supermarkets wholesale Real estate
Six months ended June 30, NIS in thousands
2010:
Net segment revenues 3,364,527 224,206 10,754
Inter segment revenues - 27,610 -
Depreciation and
amortization 80,278 7,013 -
Operating profit before
other gains and losses net
and changes in fair value
of investment
property 130,234 12,792 4,343
Segment profit 126,333 9,583 17,531
Unallocated corporate
expenses
Financial expenses, net
Share in losses of
associates, net
Income before taxes on
income
TABLE CONT'D
Commercial
and fueling Total
sites Adjustments consolidated
Six months ended June 30, NIS in thousands
2010:
Net segment revenues - - 3,599,487
Inter segment revenues - (27,610) -
Depreciation and
amortization - - 87,291
Operating profit before
other gains and losses net
and changes in fair value
of investment
property - (85) 147,284
Segment profit - (85) 153,362
Unallocated corporate
expenses (12,214)
Financial expenses, net (56,709)
Share in losses of
associates, net (576)
Income before taxes on
income 83,863
Non - food
Retail and Real
Supermarkets wholesale estate
NIS in thousands
Three months ended June
30, 2011:
Net segment revenues 1,766,464 105,302 8,441
Inter segment revenues - 10,551 -
Depreciation and
amortization 40,432 3,364 -
Operating profit (loss)
before other gains
and losses net and changes
in fair value
of investment property 68,029 (4,361) 3,790
Segment profit 66,716 (7,374) 20,180
Unallocated corporate
expenses
Financial expenses, net
Share in losses of
associates, net
Income before taxes on
income
TABLE CONT'D
Commercial
and fueling Total
sites Adjustments consolidated
NIS in thousands
Three months ended June
30, 2011:
Net segment revenues 1,328,257 - 3,208,464
Inter segment revenues 7,125 (17,676) -
Depreciation and
amortization 23,576 562 67,934
Operating profit (loss)
before other gains
and losses net and changes
in fair value
of investment property 50,644 (6,352) 111,750
Segment profit 50,579 (6,336) 123,765
Unallocated corporate
expenses (5,716)
Financial expenses, net (15,210)
Share in losses of
associates, net 104
Income before taxes on
income 102,943
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD.
FOR THE SIX AND THREE MONTHS PERIODS ENDED JUNE 30, 2011
(UNAUDITED)
Non -
food
Retail
and
Supermarkets wholesale Real estate
Three months ended June
30, 2010: NIS in thousands
Net segment revenues 1,674,632 88,691 5,340
Inter segment sales - 10,855 -
Depreciation and
amortization 39,888 4,198 -
Operating profit (loss)
before other gains and
losses net and changes
in fair value of
investment property 70,617 (5,713) 3,373
Segment profit 67,971 (8,946) 14,287
Unallocated corporate
expenses
Financial expenses, net
Share in losses of
associates, net
Income before taxes on
income
Commercial
and fueling
sites Adjustments Total Consolidated
Three months ended June
30, 2010: NIS in thousands
Net segment revenues - - 1,768,663
Inter segment sales - (10,855) -
Depreciation and
amortization - - 44,086
Operating profit (loss)
before other gains and
losses net and changes
in fair value of
investment property - 1,138 69,415
Segment profit - 1,138 74,450
Unallocated corporate
expenses (6,929)
Financial expenses, net (42,281)
Share in losses of
associates, net (4)
Income before taxes on
income 25,236
Non - food
Retail and
Supermarkets wholesale Real estate
NIS in thousands
Year ended December 31,
2010:
Net segment revenues 6,894,978 438,623 25,162
Inter segment revenues - 43,444 -
Depreciation and
amortization 163,020 15,156 -
Operating profit (loss)
before other gains and
losses net and changes
in fair value of
investment property 241,942 (7,189) (4,843)
Segment profit 232,944 (19,519) 28,073
Unallocated corporate
expenses
Financial expenses, net
Share in losses of
associates, net
Income before taxes on
income
TABLE CONT'D
Commercial
and fueling
sites Adjustments Total Consolidated
NIS in thousands
Year ended December 31,
2010:
Net segment revenues 1,144,981 - 8,503,744
Inter segment revenues 8,339 (51,783) -
Depreciation and
amortization 27,328 1,441 206,945
Operating profit (loss)
before other gains and
losses net and changes
in fair value of
investment property 42,936 (9,424) 263,422
Segment profit 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
Retail and
Supermarkets wholesale Real estate
Convenience translation
Six months ended June to U.S. dollar in
30, 2011: thousands
Net segment revenues 996,486 64,824 4,308
Inter segment revenues - 5,964 -
Depreciation and
amortization 23,479 2,012 -
Operating profit (loss)
before other gains and
losses net and changes
in fair value of
investment property 34,437 (475) 1,846
Segment profit 34,052 (1,911) 7,540
Unallocated corporate
expenses
Financial expenses, net
Share of losses of
associates, net
Income before taxes on
income
TABLE CONT'D
Commercial
and
fueling
sites Adjustments Total Consolidated
Convenience translation
Six months ended to U.S. dollar in
June 30, 2011: thousands
Net segment revenues 754,465 - 1,820,083
Inter segment
revenues 4,277 (10,241) -
Depreciation and
amortization 13,417 879 39,787
Operating profit
(loss) before other
gains and losses net
and changes in fair
value of investment
property 29,567 (4,046) 61,329
Segment profit 29,548 (4,046) 65,183
Unallocated
corporate expenses (3,414)
Financial expenses,
net (16,384)
Share of losses of
associates, net 386
Income before taxes
on income 45,771
1. Gross sales in stores that operated fully in both periods.
2. 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.
3. The results of Dor Alon were included effective October 3, 2010 in the results of Alon Holdings. The data for the first half of 2010 were included in this report in order to enable analysis and trends of the segment performance.
4. Use of financial measures that are not in accordance with Generally Accepted Accounting Principles
EBITDA is a measure that is not in accordance with Generally Accepted Accounting Principles (Non-GAAP) and is defined as income before financial income (expenses) net, other gains (losses) net, changes in fair value of investment property, taxes, depreciation and amortization. It is an accepted ratio in the retail industry. It is presented as an additional performance measure, since it enables comparisons of operating performances between periods and companies while neutralizing potential differences resulting from changes in capital structures, taxes, age of property and equipment and its related depreciation expenses. EBITDA, however, should not be related to as a single measure or as an alternative to operating income, another performance indicator and to cash flow information, which are prepared using Generally Accepted Accounting Principles (GAAP) as indicators of profit or liquidity. EBITDA does not take the costs of servicing debt and other liabilities into account, including capital expenditures and therefore it does not necessarily indicate the amounts that may be available to the use of the company and in addition EBITDA should not be compared to other indicators with similar names reported by other companies because of differences in the calculation of these indicators. See the reconciliation between our net income and EBITDA which is presented in this press release.
Contact:
Alon Holdings Blue Square-Israel Ltd.
Dror Moran, CFO
Toll-free telephone from U.S. and Canada: 888-572-4698
Telephone from rest of world: +972-3-928-2220
Fax: +972-3-928-2299
Email: [email protected]
SOURCE Alon Holdings Blue Square - Israel Ltd.
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