Hadera Paper Ltd. reports financial results for third quarter and nine months

Published November 29th, 2009 - 12:27 GMT

Hadera Paper Ltd. (AMEX:AIP)
(the "Company" or "Hadera Paper")
today reported financial results for the third quarter and first nine months
ended September 30, 2009. The Company, its subsidiaries and associated
companies - is referred to hereinafter as the "Group".

 

    Since the Company's share in the earnings of associated
companies constitutes a material component in the Company's statement of
income (primarily on account of its share in the earnings of Mondi Hadera
Paper Ltd. ("Mondi Hadera") and Hogla-Kimberly Ltd. ("H-K")), before the
presentation of the consolidated data below, the aggregate data which include
the results of all the companies in the Hadera Paper Group (including the
associated companies whose results appear in the financial statements under
"earnings from associated companies") is being presented, without considering
the rate of holding therein and net of mutual sales.

 

    The aggregate sales during the reported period amounted to NIS
2,409.2 million, as compared with NIS 2,442.5 million in the corresponding
period last year, representing a decrease of approximately 1.4%.

 

    The aggregate sales in the third quarter this year amounted to
NIS 790.4 million, as compared with NIS 823.9 million in the corresponding
period last year, representing a decrease of 4.0% and as compared with NIS
788.8 million in the second quarter of the year.

 

    The aggregate operating profit totaled NIS 186.7 million
during the reported period, as compared with NIS 160.5 million in the
corresponding period last year, representing growth of approximately 16.3%.

 

    The aggregate operating profit totaled NIS 68.7 million in the
third quarter of the year, as compared with NIS 49.2 million in the
corresponding quarter last year, representing growth of 39.6% and as compared
with NIS 54.1 million in the second quarter of the year.

 

    The Consolidated Data set forth below excluding the results of
operation of the associated companies: Mondi Hadera and H-K. Consolidated
Data include also the sales turnover of Carmel Containers Systems Ltd.
("Carmel") and Frenkel- C.D. Ltd. ("Frenkel- C.D.") that were consolidated as
of September 2008, as a result of the fact that the company's holding rate in
Carmel has increased from 36.2% to 89.3%, and at Frenkel CD, indirectly, from
37.93% to 52.72%.

 

    Commencing January 1, 2009, the company applies IFRS 8,
"Operating Segments", and has accordingly recognized the packaging products
and board segment, which includes the operations of Carmel and Frenkel C.D.,
as a separate segment. The associated companies H-K and Mondi Hadera were
also recognized as independent segments. For further details, see below.

 

    Consolidated sales in the reported period amounted to NIS
654.4 million, as compared with NIS 447.2 million in the corresponding period
last year, representing an increase which was due mainly to the consolidation
of the data of Carmel and Frenkel C.D. in the reported period.

 

    Consolidated sales in the third quarter, amounted to NIS 220.4
million, as compared with NIS 171.4 million in the corresponding quarter last
year.

 

    The operating profit totaled NIS 15.1 million during the
reported period, as compared with NIS 38.0 million in the corresponding
period last year. The decrease in operating profits originated from the
erosion of selling prices coupled with the quantitative erosion of packaging
paper and recycling, as a result of the imports of packaging paper at dumping
prices that was offset by the recording of non-recurring revenues of NIS 16.4
million on account of a unilateral dividend.

 

    The operating profit amounted to NIS 1.2 million in the third
quarter of the year, as compared with operating profit of NIS 7.9 million in
the corresponding quarter last year.

 

    The net profit attributed to the Company's shareholders amounted to NIS
70.2 million in the reported period, as compared with net profit of NIS 59.5
million, that is attributed to the company's shareholders in the
corresponding period last year.

 

    The net profit attributed to the Company shareholders during the reported
period was affected by the improvement in operating profitability at some of
the groups companies in Israel and in Turkey and by the recording of earnings
as a result of the distribution of a unilateral dividend on account of the
application of a preferred share by an associated Company that generated net
revenues of NIS 8.4 million for the company. Moreover, a reduction in the
Company's share in the losses on account of the operations in Turkey (KCTR)
compared with the corresponding period last year also contributed to the
improved profitability.

 

    The net profit for the third quarter this year amounted to NIS
35.4 million, as compared with a net profit of NIS 20.2 million in the
corresponding quarter last year.

 

    Revenues from taxes on income amounted to NIS 6.0 million in
the reported period, as compared with tax expenses of NIS 4.2 million in the
corresponding period last year. The tax revenues originated primarily from
the decrease in pretax profits in the amount of NIS 25.7 million, coupled
with the change in the tax rates the following years that generated deferred
tax revenues in the amount of NIS 9.4 million, that were offset as a result
of recording a provision for taxes on account of events that were included
the reported period.

 

    The long-term liabilities (including current maturities)
amounted to NIS 832.6 million as at September 30, 2009, as compared with NIS
828.2 million as at September 30, 2008. The long-term liabilities increased
in relation to last year, primarily as a result of long-term loans that were
assumed, designated for the financing of payments on account of Machine 8.
This increase was offset as a result of the repayment of the old debenture
series, coupled with the repayment of a capital note to an associated company
and the cash flows from operating activities.

 

    Basic earnings per share amounted to NIS 13.86 per share
($3.69 per share) in the reported period, as compared with basic earnings per
share of NIS 11.75 per share ($3.44 per share) in the corresponding period
last year.

 

    Basic earnings per share amounted to NIS 7.00 per share in the
third quarter ($1.86 per share), as compared with earnings of NIS 3.99 per
share ($1.17 per share) in the corresponding quarter last year.

 

    The inflation rate during the reported period amounted to
3.4%, as compared with an inflation rate of 4.4% in the corresponding period
last year.

 

    The financial expenses during the reported period amounted to
NIS 14.8 million, as compared with NIS 11.9 million in the corresponding
period last year.

 

    The US dollar exchange rate was revaluated by 1.2% during the
reporting period, in relation to a revaluation of approximately 11% during
the corresponding period last year.


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