The Elco Group summed up the second quarter of the year with revenues of 3.5 billion shekels –growth of 36% compared to the same period in 2020 ■ Net profits jumped by 94%.
Yosef Harash
Published on 31.08.21
The Elco Group under the control of the Salkind brothers (65%) is finishing another quarter with a rise in revenues and a jump in net profits. This is partly against a background of the expansion of its subsidiaries into new fields, through the acquisition of the Beitan Wines chain by Electra Consumer Goods, and the acquisition of control of Afikim public transport company by Electra. In the second quarter Elco also completed the acquisition of 29.8% of DIC shares, and is now active in the fields of infrastructures, construction, real estate initiatives, retail, communications, transport, energy and more.
The Elco Group (+0.41% 19690) includes six subsidiaries: Electra (49%), which is active in the fields of infrastructures, transport and real estate; Electra Real Estate (60%), which purchases and leases real estate in the USA; Electra Consumer Goods (48%), which imports electrical appliances, provides service for the products, runs a retail chain to sell the appliances and also a retail food chain; Cinema Dreams Theater (100%) which operates a nationwide array of cinema complexes; Discount Investment Corporation (DIC), which holds companies in the fields of real estate (Property & Building Corp.), cellular phones (Cellcom), high-tech initiatives (Elron), agriculture and cold storage warehouses (Mehadrin); and Supergas Energy Ltd (62%), which markets gas for cooking and heating and natural gas.
Elco shares
• The struggle for control of Gav Yam continues; Nachmias and the Salkind brothers are examining the acquisition of a further 5% of the company.
• Thanks to the buses: Electra reports a rise of 45% in net profit.
• “Transport will be one of Electra’s biggest engines of growth in the next few years”
Elco's revenues in the second quarter of the year rose 36% to about NIS 3.49 bn, compared to about NIS 2.56 bn in the same period in 2020. The Group’s gross profit rose by about 76% to about NIS 679 million, compared to NIS 386 million in the second quarter last year. Operating profit climbed by about 89% in the second quarter to about NIS 336 million, compared to NIS 178 million in the same period in 2020. Net profit jumped by 94% to about NIS 213 million (about NIS 103 million attributed to the shareholders), compared to NIS 110 million (about NIS 54 million attributed to the shareholders) in the second quarter of 2020.
Apart from Supergas (-1.28% 7552), all Elco’s subsidiaries recorded increased revenues and profits in the second quarter. The revenues of Electra (+0.71% 193060) amounted to about NIS 2.23 bn, and the company contributed profits of about NIS 68 million, compared to profits of NIS 47 million in the same quarter last year. Electra Real Estate (+2.31% 4525) recorded revenues of about NIS 162 million, and contributed profits of about NIS 88 million, compared to profits of about NIS 29 million in the second quarter of 2020, following the rise in the value of properties in the USA and sales of properties.
Revenues of Electra Consumer Goods (-1.01% 17630) amounted to about NIS 898 million in the second quarter of the year, and it contributed profits of about NIS 62 million, compared to profits of about NIS 35 million in the same period in 2020 – following the acquisition of the Beitan Wines retail chain. Supergas Energy recorded revenues of about NIS 136 million, and reported a loss of about a million shekels, compared to a profit of about NIS 12 million in the same quarter in 2020.
As of the end of the second quarter this year, the Elco Group has cash and short term investments amounting to about NIS 1.17 bn, and its working capital amounts to about NIS 4bn (of which about NIS 1.8 billion are attributed to the shareholders).
In the first half of the year, Elco received dividends of NIS 55 million from its subsidiaries. Last month, the companies announced a further distribution of dividends, of which NIS 55 million will be paid to Elco. In the financial reports for the second quarter of the year, the Elco Board of Directors announced a dividend of NIS 20 million for the Group’s shareholders, further to the distribution of NIS 40 million in April.
Avi Yisraeli, Assistant to the CEO of Elco, said: “The results for this period were positively impacted, inter alia, by the unification for the first time of Electra Afikim with the results of Electra Ltd. and of Beitan Wines with the results of Electra Consumer Goods, and also by the continuing growth in other segments of the subsidiaries. At Elco we recently completed the acquisition of about 30% of Discount Investments, where we have identified significant potential for improvement.”