Delek jumps on strong Q3 results

Israeli energy company Delek Group Ltd. (TASE:DLEKG) has risen more than 4% on the Tel Aviv Stock Exchange (TASE) after publishing strong third quarter results. Delek, controlled by Yitzhak Tshuva and managed by CEO Idan Wallace controls (54%) east Mediterranean gas exploration and production unit NewMed Energy (TASE: NWMD), which holds 45% of the Leviathan gas field, and Ithaca Energy (89%), which operates offshore from the UK in the North Sea. In the third quarter Delek reported net profit of NIS 423 million after a net loss of NIS 404 million in the corresponding quarter of 2022.

In the first nine months of 2023, Delek reported net profit of NIS 1.4 billion. Following the fourth quarter results the company will distribute a dividend of NIS 250 million, after the company has already received NIS 350 million in dividends from its subsidiaries and expects another NIS 170 million by the end of the year.

At the same time Delek Group reported that its financial debt has fallen to NIS 3.15 billion, compared with NIS 3.77 billion at the end of the corresponding quarter of 2022.

Delek Group also reports that the negotiations continue for the private sale of 50% of NewMed Energy to British Petroleum (BP) and Abu Dhabi National Oil Co. (ADNOC) – the purchase of the public’s holding and a 5% stake from Delek. The deal was originally agreed for NIS 14 billion, a 72% premium on the company’s share price when the agreement was signed last March.

Delek’s share price is currently NIS 464, giving a market cap of NIS 8.6 billion, up 16% over the past 12 months. Since the start of the war, Delek’s share price has fallen 13%.

Leader Capital Markets believes in Delek and gives a “Buy” recommendation and sees a 39% in the share price if the BP and ADNOC acquisition of NewMed Energy is not completed and an upside of 57% if the deal is completed.

Published by Globes, Israel business news – en.globes.co.il – on November 22, 2023.

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