The Israel Shipyards Company presented 9% decrease in profit for Q3 to NIS 16 million

The Israel Shipyards Company presented good financial results for the third quarter of 2020.
However, the net profit of Israel Shipyards (+ 0.46% 6401) - controlled by Sami Katsav, Asi Schmelzer, Shlomi Fogel and the public Goldbond company (20% each) - decreased by 9% in the third quarter of 2020 compared to the corresponding quarter in 2019, and amounted to NIS 16 million. The decrease in profit is due to the transition to financing expenses of NIS 103,000 in the past quarter, compared with financing income of NIS 6 million in the corresponding quarter in 2019, in which Israeli shipyards benefited from the differences on balance sheet balances.
The company is active in three sectors: the shipyard sector, which plans to build and provide repair and maintenance services for military and civilian vessels through Israeli shipyards; The port sector that provides unloading, transportation and storage services through a port in Haifa Bay; And the cement sector, which imports, manufactures and markets cement materials through its subsidiary (70%) Cement.
Israel Shipyards' revenues grew by 37% in the third quarter of 2020 compared to the corresponding quarter in 2019 and amounted to NIS 206 million. The increase in revenues is due to a 52% growth in cement segment revenues in the past quarter compared to the same period in 2019. Revenues amounted to NIS 112 million thanks to an increase of 190,000 tons, ie 69%, in the amount of cement sold in the third quarter of 2020 compared to the corresponding quarter in 2019, which was offset by a 10% decrease in the average price.
Revenues in the shipyard segment grew by 65% ​​in the past quarter compared to the same period in 2019 and amounted to NIS 47 million as a result of project completion and revenue recognition. Revenue from the port sector grew by 22% in the third quarter of 2020 compared to the same quarter in 2019 and amounted to $ 40 million. The increase was due to an increase in the amount of cargo unloaded at the port in light of the increase in the use of the wharf provided by the company to Noble.
Israel Shipyards' operating profit jumped by 37% in the third quarter of 2020 compared to the corresponding quarter in 2019 and amounted to NIS 25 million. The operating profit of the shipyard sector grew by 457% in the past quarter compared to the same period in 2019 and reached NIS 12 million thanks to the completion of projects and a profitable mix of projects under construction. The operating profit of the port sector increased by 36% in the third quarter of 2020 compared to the corresponding quarter in 2019 and amounted to NIS 11 million due to the increase in activity.
The operating profit of the cement sector jumped by 57% in the third quarter of 2020 compared to its counterpart in 2019 and amounted to NIS 15 million. The increase was due to a sharp increase (69%) in the quantity marketed by the company and a decrease of 15% in the average cost per tonne as a result of the spread of fixed expenses over a larger quantity. In addition, the fall in raw material prices and the cost of transportation, as well as the depreciation of the dollar exchange rate against the shekel.
Israel Shipyards, which is bidding for the purchase of the port of Haifa, states that in December 2020, renovation work will begin on one of the port's wharves for a projected period of up to about a year. The Israel Shipyards estimates that during the renovation period the availability of the wharf sections will be impaired and accordingly there will be a decrease in the provision of port services to ships in the section where the restoration work is being carried out.
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