Ashstrom Group, a prominent player in the construction and infrastructure sector with a market value of around NIS 5.5 billion, has released its financial results for the second quarter and the first half of 2023. Despite a challenging business environment, the company demonstrated stability and growth across its diverse portfolio.
In the second quarter of 2023, Ashstrom's revenues remained steady at NIS 1.26 billion compared to the corresponding period in 2022. Notably, the group's revenues for the first half of the year were approximately NIS 2.52 billion, indicating a growth of 2% compared to the first half of 2022. The significant boost in revenues was primarily attributed to increased operations within Israel, overseas activities via Ashstrom International, and the company's residential rental ventures. However, there was a decrease in revenues within the residential real estate entrepreneurship sector in Israel, particularly through Ashder.
The gross profit for the second quarter stood at NIS 265.1 million, marking a slight decrease of 1.9% in comparison to the same period last year. The dip was mainly due to reduced activity within Ashder's residential development sector. Despite this, most of the group's other sectors experienced a growth in gross profit. Ashstrom's operating profit witnessed a more substantial decline, plummeting by about 56% in the second quarter of 2023 compared to the corresponding period in 2022. This was primarily attributed to a loss in the value of investment real estate, impacting the company's bottom line.
Net Profit and Shareholder Returns
The net profit attributable to shareholders for the second quarter of 2023 was approximately NIS 116.2 million, indicating a significant 60.5% decrease compared to the same quarter in 2022. Similarly, the profit attributed to shareholders for the first half of the year was approximately NIS 163.1 million, down by 62.4% compared to the first half of 2022. This downward trend in net profit reflects the prevailing challenges and fluctuations in the market.
Despite the economic uncertainties, Ashstrom Group boasts a robust backlog of approximately NIS 8 billion, providing a sense of security and continuity. The company's consolidated balance sheet reveals cash, cash equivalents, and short-term investments totaling approximately NIS 1.7 billion. Rami Nussbaum, Chairman of the Ashstrom Board of Directors, emphasized the group's diversified activities and geographical presence across Israel and international markets. He noted that these factors contribute to the group's adaptability, strong foundation, and financial stability.
Nussbaum expressed optimism about the future, highlighting the commencement of renewable energy operations in the USA. Ashstrom has embarked on the construction of its inaugural solar project in Texas. These developments, combined with the substantial backlog and ample liquid assets, position the company to continue pursuing its business strategy and nurturing growth in the years ahead.
Ashstrom Group is a leading name in the construction and infrastructure industry, valued at around NIS 5.5 billion. With a diverse portfolio spanning various sectors and a presence in both local and global markets, the company maintains financial stability and resilience. Its recent foray into renewable energy projects in the USA underscores Ashstrom's commitment to innovation and sustainable growth.