HADERA, Israel, November 9 /PRNewswire-FirstCall/ -- 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.
In the course of the reported period, a turnaround has occurred in the
intensity of the global and local economic crisis. Following a stability of
several months at the low point, in the past several months it was possible
to observe a gradual recovery in global economic activity, that was
expressed, inter alia, the slowdown in both global and local unemployment,
the initial expansion of investments and credit volumes, coupled with an
expansion of public and private consumption.
In the global paper and paper products market, we currently see a new
trend in terms of prices in the paper industry. Prices in the global
packaging paper sector have started to climb sharply last September in Europe.
The Hadera Paper Group manages a relatively wide and diverse portfolio of
companies and businesses. This fact is instrumental in dealing with the local
and global crisis. The company's sectors of operation focus on consumer goods
and basic inputs that were affected in a relatively limited manner by the
repercussions of the global economic and financial crisis.
Hadera Paper Group was quick to formulate, at an early stage, an
aggressive program for efficiency and savings in purchasing for all its
companies, across all sectors of operation. During the reported period, most
of the Group companies have met their defined objectives, while rendering it
possible to compensate for the lower prices dictated by the global crisis,
the local slowdown and the imports of fine paper and packaging paper at
dumping prices, primarily from Europe. The group companies also operated in
order to intensively manage, in a controlled manner, the operating working
capital, while carefully monitoring trade receivables and risk management.
The companies whose earnings are reported under this item (according to
Hadera Paper's holdings therein), include primarily: Mondi Hadera and
Hogla-Kimberly.
The company's share in the profits of associated companies totaled NIS
63.9 million during the reported period, as compared with NIS 36.6 million in
the corresponding period last year.
The following principal changes were recorded in the Company's share in
the earnings of associated companies, in relation to the corresponding period
last year:
- The Company's share in the net income of Mondi Hadera Paper
(49.9%) rose by NIS 2.4 million. The increase in profit originated
primarily from an increase in the operating profit of Mondi, that grew
from NIS 27.4 million last year, to NIS 28.9 million this year.
- The Company's share in the net earnings of Hogla-Kimberly Israel
(49.9%) increased by NIS 15.6 million. Hogla-Kimberly's operating
profit grew from NIS 126.6 million to NIS 155.0 million this year.
- The Company's share in the losses of KCTR (49.9%) was reduced by
NIS 7.8 million.
On November 1, 2009, the company announced that it examined the need for
a provision for the impairment of the packaging paper sector as a cash
generating unit and has arrived at the conclusion that no recognition is
necessary of a loss on account of the impairment of fixed assets. The company
has also examined the need for a provision for impairment on account of the
consolidated subsidiary Carmel and has arrived at the conclusion that no
recognition is necessary of a loss on account of the impairment.
As aforementioned, according to IFRS 8, the Company has identified five
segments and fields of operation, as follows: (1) The paper and recycling
segment - generates revenue from the sale of paper products to paper
manufacturing companies as well as from the recycling of paper and cardboard.
(2) The office supplies marketing segment - generates revenue from the sale
of office supplies to customers. (3) The packaging and cardboard products
segment - generates revenue from the sale of packaging and cardboard products
to customers. (4) The Hogla Kimberly segment - an associated company that
generates revenue from the manufacture and marketing of household paper
products, hygiene products, disposable diapers and complementary kitchen
products, in Israel and in Turkey. (5) The Mondi Hadera Paper segment - an
associated company that generates revenue from the manufacture and marketing
of fine paper.
This report contains various forward-looking statements based upon the
Board of Directors' present expectations and estimates regarding the
operations and plans of the Group and its business environment. The Company
does not guarantee that the future results of operations will coincide with
the forward-looking statements and these may in fact differ considerably from
the present forecasts as a result of factors that may change in the future,
such as changes in costs and market conditions, failure to achieve projected
goals, failure to achieve anticipated efficiencies and other factors which
lie outside the control of the Company as well as certain other risks
detailed from time to time in the Company's filings with the Securities and
Exchange Commission. The Company undertakes no obligation for publicly
updating the said forward-looking statements, regardless of whether these
updates originate from new information, future events or any other reason.
Hadera PAPER LTD.
SUMMARY OF RESULTS
(UNAUDITED)
Nine months ended September 30,
NIS IN THOUSANDS (1)
except per share amounts
2009 2008
Net sales 654,405 447,180
Net earnings attributed to the
Company's shareholders 70,161 59,479
Basic net earnings per share attributed
to the Company's shareholders 13.86 11.75
Fully diluted earnings per share attributed
to the Company's shareholders 13.86 11.73
Three months ended September 30,
NIS IN THOUSANDS (1)
2009 2008
Net sales 220,371 171,394
Net earnings attributed to the
Company's shareholders 35,445 20,177
Basic net earnings per share attributed
to the Company's shareholders 7.0 3.99
Fully diluted earnings per share attributed
to the Company's shareholders 7.0 3.98
(1) The representative exchange rate at September 30, 2009 was N.I.S.
3.758=$1.00.
Contact:
Lea Katz, Adv.
Corporate Secretary and Chief of Legal Department
Hadera Paper Ltd. Group
Tel:+972-4-6349408
Leak@hadera-paper.co.il
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