DELEK GROUP (DLEKG) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was NIS 382 million, down from NIS 406 million in Q2 2023; H1 2024 net income was NIS 651 million, compared to NIS 967 million in H1 2023, mainly due to lower North Sea revenues.

• Equity attributable to shareholders stood at 10 billion NIS as of June 30, 2024, representing 66% of the solo balance sheet.

• Net financial debt was 2.9 billion NIS as of June 30, 2024.

• The Group's strategy focuses on developing core oil and gas assets in the Mediterranean and North Sea, while exploring renewable energy and hydrogen opportunities.

Financial highlights

• Q2 2024 revenue was 2.5 billion NIS, down from 3 billion NIS in Q2 2023; H1 2024 revenue totaled 5.48 billion NIS, an 11% decrease year-over-year.

• Dividend yield over the last 12 months was 11%.

• Net financial debt to balance sheet ratio (solo) was 0.19; LTV stood at 23%.

• Liquid assets totaled 3.4 billion NIS; unencumbered assets were 4.9 billion NIS.

• Q2 2024 operating income was 831 million NIS, down from 1,239 million NIS in Q2 2023; gross margin for H1 2024 was 43.5%, down from 58.6% in H1 2023.

Outlook and guidance

• Ithaca's business combination with Eni UK is expected to close in early Q4 2024, potentially increasing average daily production to 100,000–110,000 barrels and supporting up to USD 1 billion in dividends for 2024–2025.

• Leviathan Phase 1B development advanced, with FEED initiated and a procurement budget of USD 429 million approved; first gas expected between mid-2028 and mid-2029.

• Ongoing assessment of renewable energy and hydrogen projects, including a new solar joint venture with TeraLight.