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KENON HOLDINGS LTD.
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Date: August 14, 2019
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By:
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/s/ Robert L. Rosen
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Name:
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Robert L. Rosen
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Title:
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Chief Executive Officer
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1. |
General
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1 |
For details regarding negotiations with the other shareholder (Veridis – Power Plants Ltd.) for execution of a transaction, among other things, for acquisition of
its holdings in Rotem – see Section 2 of the Update of the Periodic Report for 2018 with reference to the Description of the Company’s Business.
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1. |
General (Cont.)
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2 |
See Sections 3, 8.2.4, 8.5.1.2, 8.14, 8.18 and 19.3.10 of the Periodic Report for 2018 for details regarding delays that occurred during the construction period
of the Hadera Power Plant, including a prior component with the same defect. Based on the information provided by the construction contractor, as at the date of the report the source of the defect had been found. the said defects were
replaced and the required treatments and actions are being carried out as part of the construction work.
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3 |
For details regarding the arrangements provided as part of Hadera’s arrangements with its customers in connection with delays in the operation date stated in the
agreements with them, including provision of a discount by the Company in the delay period – see Section 8.5.1.2 of Part A to the Periodic Report for 2018.
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5 |
See the above-mentioned sections in the Periodic Report for 2018.
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6 |
It is hereby clarified that that stated above, including regarding the updated expected date of commercial operation of the Hadera Power Plant, coverage of the
costs deriving from the delay in the commercial operation of the Hadera Power Plant (including lost profits) and receipt of compensation and/or regarding the estimate that no significant variance is expected compared to the Company’s
estimate regarding the construction cost of the power plant, includes “forward‑looking” information, as defined in the Securities Law, 1968, which is based on the Company’s estimates as at the date of this report, and regarding which
there is no certainty of its actual realization. As a practical matter, the date of commercial operation of the Hadera Power Plant could be delayed even beyond the fourth quarter of 2019 and the actual construction cost might be higher
than the estimate – this being as a result of, among other things, delays in completion of the construction work and the operation of the power plant and/or due to additional breakdowns and technical failures and/or owing to occurrence
of any of the risk factors involved with the construction of the power plant or in the Company’s activities. In addition, if compensation is not received for the full amount of the costs and/or damages (direct and/or indirect) in
connection with the delay in completion of the construction and the commercial operation, this could have an adverse impact of the Company’s results and activities. For additional details regarding the risk factors involved with
construction projects, including Hadera – see Section 19.3 to Part A of the Periodic Report for 2018.
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1. |
General (Cont.)
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7 |
The shares of the Sellers in Zomet are held for them by a trustee.
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1. |
General (Cont.)
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8 |
It is emphasized that the total maximum consideration expected for the Company from the transaction described and the expected profit from the transaction
constitute “forward‑looking” information, as defined in the Securities Law, regarding which there is no certainty it will actually be realized, and that stated depends on, among other things, factors not under the Company’s control.
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2. |
Financial Position as at June 30, 2019 (in thousands of NIS)
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Category
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6/30/2019
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12/31/2018
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Analysis
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||||||
Current Assets
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|||||||||
Cash and cash equivalents
|
378,885
|
329,950
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Most of the increase stems from an increase in the cash balances as a result of the Company’s current
operating activities, in the amount of about NIS 265 million and the net proceeds from issuance of the Company’s shares, in the amount of about NIS 119 million.
This increase was partly offset by short‑term deposits made, in the amount of about NIS 95 million,
deposits in long‑term restricted cash, in the amount of about NIS 54 million, current debt payments in Rotem, in the amount of about NIS 52 million, dividend payments, in the amount of about NIS 54 million, additional investments in
construction of the Hadera power plant, in the amount of about NIS 29 million, investments in property, plant and equipment in Rotem, in the amount of about NIS 24 million, repayment of debentures (Series A) (including interest), in the
amount of about NIS 14 million, and investments in the Zomet project, in the amount of about NIS 13 million.
For further information – see the Company’s condensed consolidated statements of cash flows for the
six‑month period ended June 30, 2019 included in the Interim Reports.
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||||||
Short-term deposits and restricted cash
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277,583
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186,954
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Most of the increase stems from short‑term deposits made, in the amount of about NIS 95 million. On the other hand, there was a
decline due to exchange rate differences in respect of dollar deposits, in the amount of about NIS 5 million.
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||||||
Trade receivables and accrued income
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111,530
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132,273
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Most of the decline stems from the seasonal factor with
respect to the sales, in the amount of about NIS 13 million, and from a decline in the balance due from Israel Electric Company, in the amount of about NIS 7 million.
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||||||
Receivables and debit balances, including derivative financial instruments
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54,221
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41,243
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Most of the increase stems from a balance due from the Hadera construction contractor, in the amount of about NIS 22 million, a
balance due from Israel Electric Company, in the amount of about NIS 5 million, conditional consideration from sale of a subsidiary, in the amount of about NIS 2 million, and an increase in the prepaid expenses, in the amount of about NIS 2
million.
On the other hand, the increase was offset mainly by a decline in the balance of Value Added Tax (VAT) receivable, in the amount
of about NIS 15 million, and a decrease in financial derivatives, in the amount of about NIS 3 million.
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||||||
Total current assets
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822,219
|
690,420
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2. |
Financial Position as at June 30, 2019 (in thousands of NIS) (Cont.)
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Category
|
6/30/2019
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12/31/2018
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Analysis
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||||||
Non-Current Assets
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|||||||||
Long-term deposits and restricted cash
|
234,423
|
181,739
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Most of the increase stems from a deposit in a debt service fund in accordance with the financing agreement
for Rotem, in the amount of about NIS 27 million, an additional deposit in “owners’ guarantee reserve” in Rotem, in the amount of about NIS 14 million, a deposit in a debt service fund for the debentures (Series A), in the amount of about
NIS 8 million, and a deposit in restricted cash relating to a guarantee provided in favor of the generation license in Zomet, in the amount of about NIS 5 million.
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||||||
Long-term loans and prepaid expenses
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88,025
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88,351
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The decrease stems from current amortization of deferred expenses of Rotem, in the amount of NIS 2 million.
On the other hand, there was an increase deriving from investments in infrastructures in Hadera, in the amount of NIS 1 million,
which are classified as “long‑term prepaid expenses”.
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||||||
Deferred tax assets, net
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3,547
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2,369
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|||||||
Long-term derivative financial instruments
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15,740
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–
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This category represents the fair value of a financial hedging instrument. For additional details – see Note 5O to the interim
financial statements.
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||||||
Property, plant and equipment
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2,408,873
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2,422,960
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Most of the decrease stems from depreciation on the property, plant and equipment in Rotem and Hadera (the Energy Center), in
the aggregate amount of about NIS 54 million, and use of diesel oil in Rotem, in the amount of about NIS 22 million, pursuant to the instruction of the System Administrator.
The decrease was partly offset by an investment in construction of the Hadera Power Plant, in the amount of NIS 22 million,
additions to the property, plant and equipment in Rotem, in the amount of about NIS 26 million, and an investment in the Zomet project, in the amount of about NIS 14 million.
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||||||
Usage right asset
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18,955
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–
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The increase derives from the first‑time application of IFRS 16. For additional details – see Note 3B to the interim financial
statements.
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||||||
Intangible assets
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4,098
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4,894
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|||||||
Total non-current assets
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2,773,661
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2,700,313
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|||||||
Total assets
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3,595,880
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3,390,733
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2. |
Financial Position as at June 30, 2019 (in thousands of NIS) (Cont.)
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Category
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6/30/2019
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12/31/2018
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Analysis
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||||||
Current Liabilities
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|||||||||
Current maturities of loans from banks
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128,734
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86,576
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Most of the increase stems from update of the current maturities of loans and debentures in accordance with
the repayment schedule, in the amount of about NIS 69 million.
The increase was partly offset by repayment of the senior debt in Rotem, in the amount of about NIS 20
million, and repayment of debentures (Series A) of the Company, in the amount of about NIS 7 million.
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||||||
Trade payables
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214,516
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177,268
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Most of the increase derives from an increase in the balance of suppliers with respect to acquisition of fuels, in the amount of
about NIS 55 million, mostly due to the payment date being subsequent to the date of the report.
The increase was partly offset by a decline in the balance of suppliers relating to the construction in Hadera, in the amount of
about NIS 10 million, and the balance due to Israel Electric Company, in the amount of about NIS 7 million.
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Payables and other credit balances
|
31,847
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24,049
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Most of the increase derives from an increase in expenses payable, in the amount of about NIS 3 million, and a payable balance
relating to acquisition of shares of Zomet, in the amount of about NIS 5 million.
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Derivative financial instruments
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12,227
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–
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This category represents the fair value of a financial hedging instrument. For additional details – see Note 5O to the interim
financial statements.
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||||||
Current maturities of long‑term liabilities in respect of a lease
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2,378
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–
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The increase stems from the first‑time application of IFRS 16 commencing from January 1, 2019. For additional details – see
Note 3B to the interim financial statements.
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||||||
Current taxes payable
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–
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3,669
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The decrease is attributable to payment of the liabilities for taxes on income in Hadera.
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||||||
Total current liabilities
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389,702
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291,562
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2. |
Financial Position as at June 30, 2019 (in thousands of NIS) (Cont.)
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Category
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6/30/2019
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12/31/2018
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Analysis
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||||||
Non-Current Liabilities
|
|||||||||
Long-term loans from banks and financial institutions
|
1,807,784
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1,828,121
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Most of the decrease stems from update of the current maturities of Rotem, in the amount of about NIS 54
million.
On the other hand, there was an increase in interest and linkage differences in respect of balances of the
senior debt of Hadera, in the amount of about NIS 19 million, which were accrued to the principal, and linkage of the senior debt of Rotem, in the amount of about NIS 15 million.
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||||||
Debentures
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267,593
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282,883
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The decrease stems from update of the current maturities of the debentures (Series A), in the amount of about NIS 15 million.
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||||||
Long-term lease liabilities
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16,513
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–
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The increase stems from the first‑time application of IFRS 16 commencing from January 1, 2019. For additional details – see
Note 3B to the interim financial statements.
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||||||
Capital notes to related party
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1,222
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1,166
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|||||||
Employee benefits
|
177
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177
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|||||||
Liabilities for deferred taxes, net
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247,283
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228,540
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The increase stems from update of the deferred taxes as a result of the income for the period.
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||||||
Total non-current liabilities
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2,340,572
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2,340,887
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|||||||
Total liabilities
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2,730,274
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2,632,449
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3. |
Results of operations for the six‑month and three‑month periods ended June 30, 2019 (in thousands of NIS)
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3. |
Results of operations for the six‑month and three‑month periods ended June 30, 2019 (in thousands of NIS) (Cont.)
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For the
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|||||||||
Six Months Ended
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|||||||||
Category
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6/30/2019
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6/30/2018
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Analysis
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||||||
Sales
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658,614
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650,801
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For detail regarding the change in the sales – see Section 6, below.
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||||||
Cost of sales (less depreciation and amortization)
|
454,232
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446,253
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For detail regarding the change in the cost of sales – see Section 7, below.
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||||||
Depreciation and amortization
|
54,241
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52,950
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|||||||
Gross profit
|
150,141
|
151,598
|
|||||||
Administrative and general expenses
|
31,528
|
24,079
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Most of the increase derives from an increase in the expenses for professional services and legal fees, in the amount of about
NIS 2 million, costs relating to the equity remuneration plan, in the amount of about NIS 2 million, an increase in the costs of salaries and wages, in the amount of about NIS 2 million. In addition, the increase stems from contributions, in
the amount of about NIS 1 million, which were paid in the second quarter of 2019, compared with third quarter of 2018. Regarding reimbursement of expenses in respect of the Tamar arbitration – see Note 6 to the interim financial statements.
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||||||
Other income, net
|
4,483
|
2,082
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Most of the increase stems from a capital gain on sale of a subsidiary, in the amount of about NIS 2 million. For additional
details – see Note 5F to the interim statements.
|
||||||
Operating income
|
123,096
|
129,601
|
|||||||
Financing expenses, net
|
53,277
|
48,117
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Most of the increase stems from the impact of the changes in the shekel/dollar exchange rate, in the amount of about NIS 10
million, mainly as a result of revaluation of a dollar deposit and financial derivatives.
On the other hand, there was a decrease, in the amount of about NIS 2 million, due to linkage of the senior debt in Rotem to the
CPI, mainly due to application of an accounting hedge to the CPI transactions the Company entered into (for additional details – see Note 5O to the interim statements). In addition, there was a decrease in the interest payments, in the amount
of about NIS 2 million, mainly as a result of current repayments of the senior debt in Rotem, and an increase in interest income on deposits, in the amount of about NIS 1 million.
|
||||||
Income before taxes on income
|
69,819
|
81,484
|
|||||||
Taxes on income
|
18,060
|
22,567
|
The decrease derives from lower income in the first half of 2019 compared with the corresponding period last year.
|
||||||
Income for the period
|
51,759
|
58,917
|
3. |
Results of operations for the six‑month and three‑month periods ended June 30, 2019 (in thousands of NIS) (Cont.)
|
For the
|
|||||||||
Three Months Ended
|
|||||||||
Category
|
6/30/2019
|
6/30/2018
|
Analysis
|
||||||
Sales
|
304,915
|
301,077
|
For detail regarding the change in the sales – see Section 6, below.
|
||||||
Cost of sales (less depreciation and amortization)
|
230,682
|
226,629
|
For detail regarding the change in the cost of sales – see Section 7, below.
|
||||||
Depreciation and amortization
|
27,411
|
26,673
|
|||||||
Gross profit
|
46,822
|
47,775
|
|||||||
Administrative and general expenses
|
14,575
|
12,340
|
Most of the increase derives from costs in respect of the equity remuneration plan, in the amount of about NIS 1 million, an
increase in the costs of salaries and wages, in the amount of about NIS 1 million, and an increase in payment of contributions, in the amount of about NIS 1 million, regarding which in 2018 were paid in the third quarter.
The increase was partly offset by lower legal expenses, in the amount of about NIS 1 million.
|
||||||
Other income, net
|
3,482
|
2,107
|
Most of the increase stems from a capital gain on sale of a subsidiary, in the amount of about NIS 2 million. For additional
details – see Note 5G to the interim statements.
|
||||||
Operating income
|
35,729
|
37,542
|
|||||||
Financing expenses, net
|
34,414
|
32,866
|
Most of the increase in the net financing expenses stems from the impact of the changes in the shekel/dollar exchange rate, in
the amount of about NIS 6 million, mainly as a result of revaluation of a dollar deposit and financial derivatives.
On the other hand, there was a decrease, in the amount of about NIS 2 million, due to linkage of the senior debt in Rotem to the
CPI, mainly due to application of an accounting hedge to the CPI transactions the Company entered into (for additional details – see Note 5O to the interim statements). In addition, there was a decrease in the interest payments, in the amount
of about NIS 1 million, mainly as a result of current repayments of the senior debt in Rotem.
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||||||
Income before taxes on income
|
1,315
|
4,676
|
|||||||
Taxes on income
|
465
|
2,525
|
The decrease derives from lower income in the first half of 2019 compared with the corresponding period last year.
|
||||||
Income for the period
|
850
|
2,151
|
4. |
EBITDA
|
For the
|
For the
|
|||||||||||||||
Six Months Ended
|
Three Months Ended
|
|||||||||||||||
June 30
|
June 30
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Sales
|
658,614
|
650,801
|
304,915
|
301,077
|
||||||||||||
Cost of sales (less depreciation and amortization)
|
(454,232
|
)
|
(446,253
|
)
|
(230,682
|
)
|
(226,629
|
)
|
||||||||
Administrative and general expenses (less
|
||||||||||||||||
depreciation and amortization)
|
(30,569
|
)
|
(23,587
|
)
|
(14,230
|
)
|
(11,929
|
)
|
||||||||
Other income
|
4,483
|
2,082
|
3,482
|
2,107
|
||||||||||||
EBITDA
|
178,296
|
183,043
|
63,485
|
64,626
|
5. |
Energy
|
For the
|
For the
|
|||||||||||||||
Six Months Ended
|
Three Months Ended
|
|||||||||||||||
June 30
|
June 30
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Sales to private customers
|
1,991
|
1,973
|
1,022
|
1,000
|
||||||||||||
Sales to the System Administrator
|
48
|
47
|
5
|
9
|
||||||||||||
Total sales
|
2,039
|
2,020
|
1,027
|
1,009
|
For the
|
For the
|
|||||||||||||||
Six Months Ended
|
Three Months Ended
|
|||||||||||||||
June 30
|
June 30
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Generation of electricity
|
1,932
|
1,930
|
948
|
954
|
||||||||||||
Purchase of electricity from the System
|
||||||||||||||||
Administrator
|
107
|
90
|
79
|
55
|
||||||||||||
Total sales
|
2,039
|
2,020
|
1,027
|
1,009
|
For the Six Months Ended June 30
|
||||||||||||||||
2019
|
2018
|
|||||||||||||||
Electricity
|
Net
|
Electricity
|
Net
|
|||||||||||||
availability
|
generation
|
availability
|
generation
|
|||||||||||||
(%)
|
(KW hours)
|
(%)
|
(KW hours)
|
|||||||||||||
Rotem
|
99.7
|
%
|
1,890
|
100
|
%
|
1,888
|
||||||||||
Hadera
|
92.1
|
%
|
42
|
94.2
|
%
|
42
|
For the Three Months Ended June 30
|
||||||||||||||||
2019
|
2018
|
|||||||||||||||
Electricity
|
Net
|
Electricity
|
Net
|
|||||||||||||
availability
|
generation
|
availability
|
generation
|
|||||||||||||
(%)
|
(KW hours)
|
(%)
|
(KW hours)
|
|||||||||||||
Rotem
|
99.3
|
%
|
929
|
100
|
%
|
936
|
||||||||||
Hadera
|
91.6
|
%
|
19
|
92.8
|
%
|
18
|
For the
|
For the
|
|||||||||||||||
Six Months Ended
|
Three Months Ended
|
|||||||||||||||
June 30
|
June 30
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
In Thousands of Tons
|
||||||||||||||||
Generation of electricity
|
388
|
373
|
188
|
184
|
||||||||||||
6. |
Revenues
|
For the
|
For the
|
|||||||||||||||
Six Months Ended
|
Three Months Ended
|
|||||||||||||||
June 30
|
June 30
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Revenues from sale of energy generated to
|
||||||||||||||||
private customers (1)
|
463,233
|
447,398
|
204,165
|
199,188
|
||||||||||||
Revenues from sale of energy purchased for
|
||||||||||||||||
private customers (2)
|
24,912
|
22,275
|
18,573
|
14,110
|
||||||||||||
Revenues from private customers in respect of
|
||||||||||||||||
infrastructures services (3)
|
134,035
|
147,085
|
66,656
|
72,561
|
||||||||||||
Revenues from sale of energy to the System
|
||||||||||||||||
Administrator (4)
|
5,622
|
5,339
|
550
|
1,081
|
||||||||||||
Revenues from sale of steam (5)
|
30,812
|
28,704
|
14,971
|
14,137
|
||||||||||||
Total revenues
|
658,614
|
650,801
|
304,915
|
301,077
|
(1) |
In the period of the report, there was an increase of about NIS 16 million in the revenues from sale of energy generated to private customers, deriving mainly
from an increase in the generation component tariff.
|
(2) |
An increase in the total sales of energy acquired from Israel Electric Company for private customers, in the amount of about NIS 3 million, stemming mainly from
higher consumption by the customers, in the amount of about NIS 2 million, and an increase in the generation tariff, in the amount of about NIS 1 million.
|
(3) |
Most of the decrease in the revenues from private customers for infrastructure services, in the amount of about NIS 13 million, stems from a decline in the
infrastructure tariffs in 2019, in the amount of about NIS 15 million, while on the other hand there was an increase of about NIS 2 million as a result of higher sales of energy.
|
(4) |
In the first half of 2019, there was no significant change in the sales of energy to the System Administrator compared with the corresponding period last year.
|
(5) |
The increase in the revenues from sale of steam, in the amount of about NIS 2 million, stems mainly from an increase in the quantity of the steam consumption, in
the amount of about NIS 1 million, along with an increase in the steam price, in the amount of about NIS 1 million.
|
6. |
Revenues (Cont.)
|
(1) |
In the second quarter of 2019, there was an increase of about NIS 5 million in the revenues from sale of energy generated to private customers, deriving mainly from
an increase in the generation component tariff, in the amount of about NIS 6 million, while on the other hand there was a decrease in the total consumption by the customers, in the amount of about NIS 1 million.
|
(2) |
An increase in the total sales of energy acquired from Israel Electric Company for private customers, in the amount of about NIS 5 million, stemming mainly from
higher consumption by the customers, in the amount of about NIS 4 million, and an increase in the generation tariff, in the amount of about NIS 1 million.
|
(3) |
Most of the decrease in the revenues from private customers for infrastructure services, in the amount of about NIS 6 million, stems from a decline in the
infrastructure tariffs in 2019, in the amount of about NIS 7 million, while on the other hand there was an increase of about NIS 1 million as a result of higher sales of energy.
|
(4) |
Most of the decrease is the result of a decrease in the total amount of energy sold to the System Administrator, in the amount of about NIS 1 million, compared with
the corresponding quarter last year.
|
(5) |
The increase in the revenues from sale of steam, in the amount of about NIS 1 million, stems mainly from an increase in the quantity of the steam consumption along
with an increase in the steam price.
|
7. |
Cost of sales (less depreciation and amortization)
|
For the
|
For the
|
|||||||||||||||
Six Months Ended
|
Three Months Ended
|
|||||||||||||||
June 30
|
June 30
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Gas and diesel fuel (1)
|
250,749
|
238,248
|
123,910
|
120,490
|
||||||||||||
Expenses to IEC for infrastructure services and
|
||||||||||||||||
purchase of electricity (2)
|
158,947
|
169,360
|
85,229
|
86,671
|
||||||||||||
Gas transmission costs (3)
|
16,002
|
13,716
|
7,956
|
6,894
|
||||||||||||
Operating expenses (4)
|
28,534
|
24,929
|
13,587
|
12,574
|
||||||||||||
Total cost of sales (less depreciation and
|
||||||||||||||||
amortization)
|
454,232
|
446,253
|
230,682
|
226,629
|
For the
|
For the
|
|||||||||||||||
Six Months Ended
|
Three Months Ended
|
|||||||||||||||
June 30
|
June 30
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
In Thousands of Tons
|
||||||||||||||||
Gas consumption (MMBTU)
|
14,069,890
|
13,941,121
|
6,933,295
|
6,866,133
|
||||||||||||
Average gas price (in dollars)
|
4.787
|
4.706
|
4.797
|
4.701
|
7. |
Cost of sales (less depreciation and amortization) (Cont.)
|
(1) |
The increase in the gas costs, in the amount of about NIS 12 million, stems mainly from an increase in the generation component and the exchange rate of the dollar.
|
(2) |
The decrease of about NIS 10, million in the expenses to Israel Electric Company in respect of infrastructure services and purchase of electricity, derives mainly
from (a) a decrease in the expenses for infrastructure services, in the amount of about NIS 13 million, due to a decrease in the infrastructure tariffs in 2019 in the amount of about NIS 15 million offset by an increase of about NIS 2
million as a result of higher energy sales; and (b) an increase in the total purchases of electricity from Israel Electric Company for private customers, in the amount of about NIS 3 million.
|
(3) |
Most of the increase in the gas transmission costs is the result of a higher fixed payment to payment Israel Natural Gas Lines due to expansion of the connection of
the new PRMS facility in Hadera in May 2018.
|
(4) |
Most of the increase stems from preparations and recruitment of personnel in contemplation of commercial operation of Hadera Power Plant.
|
(1) |
An increase in the gas costs, in the amount of about NIS 3 million, due to: (a) an increase in the gas prices, in the amount of about NIS 4 million, owing to an
increase in the exchange rate of the dollar and an increase in the generation component; and (b) offset by a decrease in the total amount generated, in the amount of about NIS 1 million.
|
(2) |
The decrease of about NIS 1, million in the expenses to Israel Electric Company in respect of infrastructure services and purchase of electricity, derives mainly
from (a) a decrease in the expenses for infrastructure services, in the amount of about NIS 6 million, due to a decrease in the infrastructure tariffs in 2019 in the amount of about NIS 7 million offset by an increase of about NIS 1
million as a result of higher energy sales; and (b) an increase in the total purchases of electricity from Israel Electric Company for private customers, in the amount of about NIS 5 million.
|
(3) |
Most of the increase in the gas transmission costs is the result of a higher fixed payment to Israel Natural Gas Lines due to expansion of the connection of the new
PRMS facility in Hadera in May 2018.
|
(4) |
Most of the increase stems from preparations and recruitment of personnel in contemplation of commercial operation of the Hadera Power Plant.
|
8. |
Liquidity and sources of financing (in NIS thousands)
|
For the
|
|||||||||
Six Months Ended
|
|||||||||
Category
|
6/30/2019
|
6/30/2018
|
Analysis
|
||||||
Cash flows provided by operating activities
|
265,122
|
232,712
|
Most of the increase stems from an increase in the working capital, in the amount of about NIS 22 million
(mainly as a result of a lower number of gas payments in the first half of 2019 due to timing differences) and an increase in current operating activities, in the amount of about NIS 10 million.
For further information – see the Company’s interim statements of cash flows included in the interim
reports.
|
||||||
Cash flows used in investing activities
|
(212,554
|
)
|
(138,463
|
)
|
Most of the increase derives from deposits in short‑term deposits, in the amount of about NIS 95 million, and deposits in
restricted cash, net, in the amount of about NIS 48 million, mainly due to update of a debt service fund and a reserve for a shareholders’ guarantee in Rotem. In addition, there were higher purchases of diesel oil, in the amount of about
NIS 13 million, owing to a higher use of diesel oil during the period, in accordance with the directives of the System Administrator.
The increase was offset by higher investments in Hadera, in the amount of about NIS 81 million, in the first half of 2018.
|
||||
Cash flows used in financing activities
|
(3,551
|
)
|
(117,416
|
)
|
Most of the decrease stems from the proceeds from
issuance of the Company’s shares, in the amount of about NIS 119 million, repayment of the senior debt in Rotem (including interest) was about NIS 20 million lower, and repayment of the Company’s debentures (Series A) (including interest) was about NIS 14 million lower, compared with the corresponding period last year. Moreover, in the first half of 2018, the debt of Zomet was repaid,
in the amount of about NIS 18 million.
On the other hand, the Company distributed a dividend during the period, in the amount of about NIS 36 million, and lower
withdrawals were made from the financing agreement framework for the Hadera project, in the amount of about NIS 22 million (in the first half of 2019 no withdrawals were made at all).
|
8. |
Liquidity and sources of financing (in NIS thousands)
|
For the
|
|||||||||
Three Months Ended
|
|||||||||
Category
|
6/30/2019
|
6/30/2018
|
Analysis
|
||||||
Cash flows provided by operating activities
|
74,486
|
138,775
|
Most of the decrease stems from a decrease in the working capital, in the amount of about NIS 76 million
(mainly as a result of a lower number of gas payments in the second quarter of 2019 due to timing differences). On the other hand, there was an increase in the current operating activities, in the amount of about NIS 12 million
For further information – see the Company’s interim statements of cash flows for the three months ended
June 30, 2019.
|
||||||
Cash flows used in investing activities
|
(167,855
|
)
|
(64,165
|
)
|
Most of the increase derives from deposits in short‑term deposits, in the amount of about NIS 94 million, and deposits in
restricted cash, in the amount of about NIS 39 million, mainly due to update of a debt service fund and a reserve for a shareholders’ guarantee in Rotem. In addition, there were higher investments in property, plant and equipment in Rotem, in
the amount of about NIS 15 million, mainly due to use of diesel oil, in accordance with the directives of the System Administrator, and higher investments in the Zomet project, in the amount of about NIS 9 million.
The increase was partly offset by lower investments in the second quarter of 2019 in Hadera, in the amount of about NIS 50
million, along with receipt of part of the proceeds from sale of Greenday, in the amount of about NIS 3 million.
|
||||
Cash flows provided by (used in) financing activities
|
23,469
|
(98,160
|
)
|
Most of the decrease stems from the proceeds from
issuance of the Company’s shares, in the amount of about NIS 119 million, repayment of the senior debt in Rotem (including interest) was about NIS 10 million lower, and repayment of the Company’s debentures (Series A) (including interest) was about NIS 14 million lower, compared with the corresponding quarter last year. Moreover, in the second quarter of 2018, the debt of Zomet was
repaid, in the amount of about NIS 13 million, and a higher dividend was paid to the holders of non‑controlling interests, in the amount of about NIS 3 million.
This increase was partly offset by distribution of a dividend during the second quarter of 2019, in the amount of about NIS 36
million.
|
8. |
Liquidity and sources of financing (in NIS thousands) (Cont.)
|
Rotem
|
Hadera
|
Solo
|
Zomet
|
Others
|
Consolidated
|
|||||||||||||||||||
Debt (not including accrued
|
||||||||||||||||||||||||
interest
|
1,254,257
|
663,109
|
286,745
|
–
|
1,222
|
2,205,333
|
||||||||||||||||||
Cash and cash equivalents
|
||||||||||||||||||||||||
and short-term deposits
|
140,865
|
34,017
|
396,048
|
4,256
|
1,764
|
576,950
|
||||||||||||||||||
Restricted cash (including
|
||||||||||||||||||||||||
debt service reserves)
|
210,964
|
6,256
|
91,616
|
5,105
|
–
|
313,941
|
||||||||||||||||||
Debt service reserves (out
|
||||||||||||||||||||||||
of the restricted cash)
|
132,198
|
–
|
54,064
|
–
|
–
|
186,262
|
||||||||||||||||||
– |
During the period of the report, Rotem repaid about NIS 20 million of its loans (the amount relates to principal only).
|
– |
During the period of the report, the Company paid the amount of about NIS 7 million of the debentures (Series A) (the amount relates to principal only).
|
Rotem
|
Hadera
|
Solo
|
Zomet
|
Others
|
Consolidated
|
|||||||||||||||||||
Debt (not including accrued
|
||||||||||||||||||||||||
interest
|
1,259,452
|
644,253
|
293,875
|
–
|
1,166
|
2,198,746
|
||||||||||||||||||
Cash and cash equivalents
|
97,077
|
44,975
|
286,314
|
632
|
1,105
|
430,103
|
||||||||||||||||||
Restricted cash (including
|
||||||||||||||||||||||||
debt service reserves)
|
172,546
|
6,459
|
89,535
|
–
|
–
|
268,540
|
||||||||||||||||||
Debt service reserves (out
|
||||||||||||||||||||||||
of the restricted cash)
|
90,499
|
–
|
46,488
|
–
|
–
|
136,987
|
Rotem
|
Hadera
|
Solo
|
Zomet
|
Others
|
Consolidated
|
|||||||||||||||||||
Debt (not including accrued
|
||||||||||||||||||||||||
interest
|
1,300,326
|
535,269
|
304,798
|
–
|
1,111
|
2,141,504
|
||||||||||||||||||
Cash and cash equivalents
|
140,223
|
42,085
|
300,752
|
230
|
1,923
|
485,213
|
||||||||||||||||||
Short-term and long-term
|
||||||||||||||||||||||||
deposits and restricted cash
|
||||||||||||||||||||||||
(including debt service
|
||||||||||||||||||||||||
reserves)
|
186,256
|
5,699
|
81,662
|
–
|
–
|
273,617
|
||||||||||||||||||
Debt service reserves (out
|
||||||||||||||||||||||||
of the restricted cash)
|
106,552
|
–
|
42,664
|
–
|
–
|
149,216
|
9. |
Significant Events in the Period of the Report and Thereafter
|
10. |
Outstanding Liabilities by Maturity Dates
|
11. |
Corporate Governance
|
– |
The amount of NIS 1,000 thousand to “Password for Every Student”. “Password for Every Student” receives contributions also from parties related to indirect
interested parties in the Company (for details – see Sections 2.3.1 and 7.3 to the Description of the Company’s Business in the Periodic Report for 2018). The Company’s CFO is a representative of the project’s Steering Committee without
compensation.
|
– |
The amount of NIS 150 thousand – to the “Nirim” Society.
|
– |
The amount of NIS 150 thousand – to the “Rakhashay Lev” Society.
|
– |
The amount of NIS 150 thousand – to the “Technoda Hadera Givat Olga” Society.
|
– |
The amount of NIS 200 thousand – to the Society for Advancement of the Dimona Sport Club and Advancement of the Youth.
|
– |
The amount of NIS 50 thousand – to the “Running to Give” Society. For the sake of good order, it is noted that a relative of the Company’s CEO serves as the
Society’s CEO without remuneration.
|
Avisar Paz
|
Giora Almogy
|
Chairman of the Board of Directors
|
CEO
|
Page
|
|
2
|
|
3 – 4
|
|
5
|
|
6
|
|
7 – 9
|
|
10 – 11
|
|
12 – 24
|
|
Somekh Chaikin KPMG
Millennium Tower
17 Ha’arba’a St., POB 609, Tel-Aviv
6100601
03-6848000
|
|
At June 30
|
At December 31
|
|||||||||||
2019
|
2018
|
2018
|
||||||||||
(Unaudited)
|
(Audited)
|
|||||||||||
In Thousands of New Israeli Shekels
|
||||||||||||
Current Assets
|
||||||||||||
Cash and cash equivalents
|
378,885
|
485,213
|
329,950
|
|||||||||
Short-term deposits and restricted cash
|
277,583
|
753
|
186,954
|
|||||||||
Trade receivables and accrued income
|
111,530
|
113,562
|
132,273
|
|||||||||
Other receivables and debit balances, including derivative
|
||||||||||||
financial instruments
|
54,221
|
30,465
|
41,243
|
|||||||||
Total current assets
|
822,219
|
629,993
|
690,420
|
|||||||||
Non‑Current Assets
|
||||||||||||
Long-term deposits and restricted cash
|
234,423
|
272,864
|
181,739
|
|||||||||
Long-term loans and prepaid expenses
|
88,025
|
*89,174
|
88,351
|
|||||||||
Deferred tax assets, net
|
3,547
|
1,280
|
2,369
|
|||||||||
Long-term derivative financial instruments
|
15,740
|
–
|
–
|
|||||||||
Property, plant and equipment
|
2,408,873
|
*2,290,142
|
2,422,960
|
|||||||||
Usage right assets
|
18,955
|
–
|
–
|
|||||||||
Intangible assets
|
4,098
|
5,656
|
4,894
|
|||||||||
Total non‑current assets
|
2,773,661
|
2,659,116
|
2,700,313
|
|||||||||
Total assets
|
3,595,880
|
3,289,109
|
3,390,733
|
* |
Reclassified.
|
At June 30
|
At December 31
|
|||||||||||
2019
|
2018
|
2018
|
||||||||||
(Unaudited)
|
(Audited)
|
|||||||||||
In Thousands of New Israeli Shekels
|
||||||||||||
Current Liabilities
|
||||||||||||
Current maturities of loans from banks and others
|
128,734
|
82,648
|
86,576
|
|||||||||
Trade payables
|
214,516
|
177,198
|
177,268
|
|||||||||
Other payables and credit balances
|
31,847
|
27,779
|
24,049
|
|||||||||
Derivative financial instruments
|
12,227
|
–
|
–
|
|||||||||
Current maturities of lease liabilities
|
2,378
|
–
|
–
|
|||||||||
Current tax liabilities
|
–
|
3,860
|
3,669
|
|||||||||
Total current liabilities
|
389,702
|
291,485
|
291,562
|
|||||||||
Non‑Current Liabilities
|
||||||||||||
Long-term loans from banks and financial institutions
|
1,807,784
|
1,771,002
|
1,828,121
|
|||||||||
Debentures
|
267,593
|
286,743
|
282,883
|
|||||||||
Long-term lease liabilities
|
16,513
|
–
|
–
|
|||||||||
Short-term capital notes
|
1,222
|
1,111
|
1,166
|
|||||||||
Employee benefits
|
177
|
280
|
177
|
|||||||||
Liabilities for deferred taxes, net
|
247,283
|
213,491
|
228,540
|
|||||||||
Total non-current liabilities
|
2,340,572
|
2,272,627
|
2,340,887
|
|||||||||
Total liabilities
|
2,730,274
|
2,564,112
|
2,632,449
|
|||||||||
Equity
|
||||||||||||
Share capital
|
1,371
|
1,319
|
1,319
|
|||||||||
Premium on shares
|
479,398
|
361,005
|
361,005
|
|||||||||
Capital reserves
|
74,379
|
82,062
|
84,749
|
|||||||||
Retained earnings
|
234,566
|
202,824
|
230,731
|
|||||||||
Total equity attributable to the Company’s owners
|
789,714
|
647,210
|
677,804
|
|||||||||
Non‑controlling interests
|
75,892
|
77,787
|
80,480
|
|||||||||
Total equity
|
865,606
|
724,997
|
758,284
|
|||||||||
Total liabilities and equity
|
3,595,880
|
3,289,109
|
3,390,733
|
_______________________________
|
_______________________________
|
_______________________________
|
Avisar Paz
Chairman of the Board of Directors
|
Giora Almogy
CEO
|
Tzahi Goshen
CFO
|
For the
|
||||||||||||||||||||
Six Months Ended
|
Three Months Ended
|
Year Ended
|
||||||||||||||||||
June 30
|
June 30
|
December 31
|
||||||||||||||||||
2019
|
2018
|
2019
|
2018
|
2018
|
||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||
In Thousands of New Israeli Shekels
|
||||||||||||||||||||
Sales
|
658,614
|
650,801
|
304,915
|
301,077
|
1,306,471
|
|||||||||||||||
Cost of sales (net of depreciation and
|
||||||||||||||||||||
amortization)
|
454,232
|
446,253
|
230,682
|
226,629
|
929,401
|
|||||||||||||||
Depreciation and amortization
|
54,241
|
52,950
|
27,411
|
26,673
|
107,208
|
|||||||||||||||
Gross profit
|
150,141
|
151,598
|
46,822
|
47,775
|
269,862
|
|||||||||||||||
Administrative and general expenses
|
31,528
|
24,079
|
14,575
|
12,340
|
51,186
|
|||||||||||||||
Other income, net
|
4,483
|
2,082
|
3,482
|
2,107
|
6,235
|
|||||||||||||||
Operating income
|
123,096
|
129,601
|
35,729
|
37,542
|
224,911
|
|||||||||||||||
Financing expenses
|
55,469
|
52,939
|
35,852
|
35,983
|
97,893
|
|||||||||||||||
Financing income
|
2,192
|
4,822
|
1,438
|
3,117
|
7,302
|
|||||||||||||||
Financing expenses, net
|
53,277
|
48,117
|
34,414
|
32,866
|
90,591
|
|||||||||||||||
Income before taxes on income
|
69,819
|
81,484
|
1,315
|
4,676
|
134,320
|
|||||||||||||||
Taxes on income
|
18,060
|
22,567
|
465
|
2,525
|
36,803
|
|||||||||||||||
Income for the period
|
51,759
|
58,917
|
850
|
2,151
|
97,517
|
|||||||||||||||
Income attributable to:
|
||||||||||||||||||||
The Company’s owners
|
39,835
|
45,127
|
224
|
834
|
73,034
|
|||||||||||||||
Non‑controlling interests
|
11,924
|
13,790
|
626
|
1,317
|
24,483
|
|||||||||||||||
Income for the period
|
51,759
|
58,917
|
850
|
2,151
|
97,517
|
Basic income per share (in NIS)
|
0.30
|
0.342
|
0.02
|
0.006
|
0.53
|
|||||||||||||||
Diluted income per share (in NIS)
|
0.30
|
0.339
|
0.02
|
0.006
|
0.47
|
For the
|
||||||||||||||||||||
Six Months Ended
|
Three Months Ended
|
Year Ended
|
||||||||||||||||||
June 30
|
June 30
|
December 31
|
||||||||||||||||||
2019
|
2018
|
2019
|
2018
|
2018
|
||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||
In Thousands of New Israeli Shekels
|
||||||||||||||||||||
Income for the period
|
51,759
|
58,917
|
850
|
2,151
|
97,517
|
|||||||||||||||
Components of other comprehensive
|
||||||||||||||||||||
income (loss) that after the initial
|
||||||||||||||||||||
recognition in the statement of
|
||||||||||||||||||||
comprehensive income were or will be
|
||||||||||||||||||||
transferred to the statement of income
|
||||||||||||||||||||
Effective portion of the change in the fair
|
||||||||||||||||||||
value of cash-flow hedges
|
512
|
1,660
|
2,113
|
(839
|
)
|
2,211
|
||||||||||||||
Net change in fair value of derivative
|
||||||||||||||||||||
financial instruments used for hedging
|
||||||||||||||||||||
cash flows recorded to the cost of the
|
||||||||||||||||||||
hedged item
|
(2,322
|
)
|
(306
|
)
|
(2,251
|
)
|
(186
|
)
|
(590
|
)
|
||||||||||
Net change in fair value of derivative
|
||||||||||||||||||||
financial instruments used to hedge
|
||||||||||||||||||||
cash flows transferred to the statement
|
||||||||||||||||||||
of income
|
(5,330
|
)
|
–
|
(5,330
|
)
|
–
|
–
|
|||||||||||||
Taxes in respect of items of other
|
||||||||||||||||||||
comprehensive income
|
412
|
(311
|
)
|
28
|
236
|
(373
|
)
|
|||||||||||||
Total other comprehensive income (loss)
|
||||||||||||||||||||
for the period, net of tax
|
(6,728
|
)
|
1,043
|
(5,440
|
)
|
(789
|
)
|
1,248
|
||||||||||||
Total comprehensive income (loss) for the
|
||||||||||||||||||||
period
|
45,031
|
59,960
|
(4,590
|
)
|
1,362
|
98,765
|
||||||||||||||
Total comprehensive income (loss)
|
||||||||||||||||||||
attributable to:
|
||||||||||||||||||||
The Company’s owners
|
33,107
|
46,170
|
(5,216
|
)
|
45
|
74,282
|
||||||||||||||
Holders of non‑controlling interests
|
11,924
|
13,790
|
626
|
1,317
|
24,483
|
|||||||||||||||
Total comprehensive income (loss) for the
|
||||||||||||||||||||
period
|
|
45,031
|
|
59,960
|
|
(4,590
|
)
|
|
1,362
|
|
98,765
|
Attributable to the owners of the Company
|
||||||||||||||||||||||||||||||||||||||||
Capital
|
||||||||||||||||||||||||||||||||||||||||
reserve for
|
||||||||||||||||||||||||||||||||||||||||
transactions
|
||||||||||||||||||||||||||||||||||||||||
with
|
||||||||||||||||||||||||||||||||||||||||
non-
|
||||||||||||||||||||||||||||||||||||||||
controlling
|
Capital
|
|||||||||||||||||||||||||||||||||||||||
interests
|
reserve for
|
Capital
reserve for
share-based
payments
|
||||||||||||||||||||||||||||||||||||||
Premium
|
and in
|
transactions
|
Non-
|
|||||||||||||||||||||||||||||||||||||
Share
|
on
|
respect of
|
Hedging
|
with
|
Retained
|
controlling
|
Total
|
|||||||||||||||||||||||||||||||||
capital
|
shares
|
merger
|
reserve
|
shareholders
|
earnings
|
Total
|
interests
|
equity
|
||||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||
In Thousands of New Israeli Shekels
|
||||||||||||||||||||||||||||||||||||||||
For the six‑month
|
||||||||||||||||||||||||||||||||||||||||
period ended
|
||||||||||||||||||||||||||||||||||||||||
June 30, 2019
|
||||||||||||||||||||||||||||||||||||||||
Balance at
|
||||||||||||||||||||||||||||||||||||||||
January 1, 2019
|
1,319
|
361,005
|
2,598
|
451
|
77,930
|
3,770
|
230,731
|
677,804
|
80,480
|
758,284
|
||||||||||||||||||||||||||||||
Issuance of shares (less)
|
||||||||||||||||||||||||||||||||||||||||
issuance expenses)
|
52
|
118,393
|
–
|
–
|
–
|
–
|
–
|
118,445
|
–
|
118,445
|
||||||||||||||||||||||||||||||
Acquisition of non-
|
||||||||||||||||||||||||||||||||||||||||
controlling interests
|
–
|
–
|
(6,005
|
)
|
–
|
–
|
–
|
–
|
(6,005
|
)
|
5
|
(6,000
|
)
|
|||||||||||||||||||||||||||
Share-based payment
|
–
|
–
|
–
|
–
|
–
|
2,363
|
–
|
2,363
|
–
|
2,363
|
||||||||||||||||||||||||||||||
Dividends to the
|
||||||||||||||||||||||||||||||||||||||||
Company’s
|
||||||||||||||||||||||||||||||||||||||||
shareholders
|
–
|
–
|
–
|
–
|
–
|
–
|
(36,000
|
)
|
(36,000
|
)
|
–
|
(36,000
|
)
|
|||||||||||||||||||||||||||
Dividends to holders
|
||||||||||||||||||||||||||||||||||||||||
of non-controlling
|
||||||||||||||||||||||||||||||||||||||||
interests
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
(17,600
|
)
|
(17,600
|
)
|
||||||||||||||||||||||||||||
Elimination of
|
||||||||||||||||||||||||||||||||||||||||
non-controlling
|
||||||||||||||||||||||||||||||||||||||||
interests due to sale
|
||||||||||||||||||||||||||||||||||||||||
of subsidiary
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
1,083
|
1,083
|
||||||||||||||||||||||||||||||
Other comprehensive
|
||||||||||||||||||||||||||||||||||||||||
loss for the period,
|
||||||||||||||||||||||||||||||||||||||||
net of tax
|
–
|
–
|
–
|
(6,728
|
)
|
–
|
–
|
–
|
(6,728
|
)
|
–
|
(6,728
|
)
|
|||||||||||||||||||||||||||
Income for the period
|
–
|
–
|
–
|
–
|
–
|
–
|
39,835
|
39,835
|
11,924
|
51,759
|
||||||||||||||||||||||||||||||
Balance at
|
||||||||||||||||||||||||||||||||||||||||
June 30, 2019
|
1,371
|
479,398
|
(3,407
|
)
|
(6,277
|
)
|
77,930
|
6,133
|
234,566
|
789,714
|
|
|
75,892
|
865,606
|
||||||||||||||||||||||||||
For the six‑month
|
||||||||||||||||||||||||||||||||||||||||
period ended
|
||||||||||||||||||||||||||||||||||||||||
June 30, 2018
|
||||||||||||||||||||||||||||||||||||||||
Balance at
|
||||||||||||||||||||||||||||||||||||||||
January 1, 2018
|
1,319
|
361,005
|
2,598
|
(797
|
)
|
77,930
|
548
|
157,697
|
600,300
|
84,239
|
684,539
|
|||||||||||||||||||||||||||||
Acquisition of non-
|
||||||||||||||||||||||||||||||||||||||||
controlling interests
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
17
|
17
|
||||||||||||||||||||||||||||||
Share-based payment
|
–
|
–
|
–
|
–
|
–
|
740
|
–
|
740
|
–
|
740
|
||||||||||||||||||||||||||||||
Capital reserve in
|
||||||||||||||||||||||||||||||||||||||||
respect of transactions
|
||||||||||||||||||||||||||||||||||||||||
with holders of non-
|
||||||||||||||||||||||||||||||||||||||||
controlling interests
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
741
|
741
|
||||||||||||||||||||||||||||||
Dividends to holders
|
||||||||||||||||||||||||||||||||||||||||
of non-controlling
|
||||||||||||||||||||||||||||||||||||||||
interests
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
(21,000
|
)
|
(21,000
|
)
|
||||||||||||||||||||||||||||
Other comprehensive
|
||||||||||||||||||||||||||||||||||||||||
income for the period,
|
||||||||||||||||||||||||||||||||||||||||
net of tax
|
–
|
–
|
–
|
1,043
|
–
|
–
|
–
|
1,043
|
–
|
1,043
|
||||||||||||||||||||||||||||||
Income for the period
|
–
|
–
|
–
|
–
|
–
|
–
|
45,127
|
45,127
|
13,790
|
58,917
|
||||||||||||||||||||||||||||||
Balance at
|
||||||||||||||||||||||||||||||||||||||||
June 30, 2018
|
1,319
|
361,005
|
2,598
|
246
|
77,930
|
1,288
|
202,824
|
647,210
|
77,787
|
724,997
|
Attributable to the owners of the Company
|
||||||||||||||||||||||||||||||||||||||||
Capital
|
||||||||||||||||||||||||||||||||||||||||
reserve for
|
||||||||||||||||||||||||||||||||||||||||
transactions
|
||||||||||||||||||||||||||||||||||||||||
with
|
||||||||||||||||||||||||||||||||||||||||
non-
|
||||||||||||||||||||||||||||||||||||||||
controlling
|
Capital
|
|||||||||||||||||||||||||||||||||||||||
interests
|
reserve for
|
Capital
reserve for
share-based
payments
|
||||||||||||||||||||||||||||||||||||||
Premium
|
and in
|
transactions
|
Non-
|
|||||||||||||||||||||||||||||||||||||
Share
|
on
|
respect of
|
Hedging
|
with
|
Retained
|
controlling
|
Total
|
|||||||||||||||||||||||||||||||||
capital
|
shares
|
merger
|
reserve
|
shareholders
|
earnings
|
Total
|
interests
|
equity
|
||||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||
In Thousands of New Israeli Shekels
|
||||||||||||||||||||||||||||||||||||||||
For the three‑month
|
||||||||||||||||||||||||||||||||||||||||
period ended
|
||||||||||||||||||||||||||||||||||||||||
June 30, 2019
|
||||||||||||||||||||||||||||||||||||||||
Balance at
|
||||||||||||||||||||||||||||||||||||||||
April 1, 2019
|
1,319
|
361,005
|
1,097
|
(837
|
)
|
77,930
|
4,969
|
234,342
|
679,825
|
74,179
|
754,004
|
|||||||||||||||||||||||||||||
Issuance of shares (less)
|
||||||||||||||||||||||||||||||||||||||||
issuance expenses)
|
52
|
118,393
|
–
|
–
|
–
|
–
|
–
|
118,445
|
–
|
118,445
|
||||||||||||||||||||||||||||||
Acquisition of non-
|
||||||||||||||||||||||||||||||||||||||||
controlling interests
|
–
|
–
|
(4,504
|
)
|
–
|
–
|
–
|
–
|
(4,504
|
)
|
4
|
(4,500
|
)
|
|||||||||||||||||||||||||||
Share-based payment
|
–
|
–
|
–
|
–
|
–
|
1,164
|
–
|
1,164
|
–
|
1,164
|
||||||||||||||||||||||||||||||
Elimination of
|
||||||||||||||||||||||||||||||||||||||||
non-controlling
|
||||||||||||||||||||||||||||||||||||||||
interests due to sale
|
||||||||||||||||||||||||||||||||||||||||
of subsidiary
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
1,083
|
1,083
|
||||||||||||||||||||||||||||||
Other comprehensive
|
||||||||||||||||||||||||||||||||||||||||
loss for the period,
|
||||||||||||||||||||||||||||||||||||||||
net of tax
|
–
|
–
|
–
|
(5,440
|
)
|
–
|
–
|
–
|
(5,440
|
)
|
–
|
(5,440
|
)
|
|||||||||||||||||||||||||||
Income for the period
|
–
|
–
|
–
|
–
|
–
|
–
|
224
|
224
|
626
|
850
|
||||||||||||||||||||||||||||||
Balance at
|
||||||||||||||||||||||||||||||||||||||||
June 30, 2019
|
|
1,371
|
|
479,398
|
|
(3,407
|
)
|
|
(6,277
|
)
|
|
77,930
|
|
6,133
|
|
234,566
|
|
789,714
|
|
|
75,892
|
|
865,606
|
|||||||||||||||||
For the three‑month
|
||||||||||||||||||||||||||||||||||||||||
period ended
|
||||||||||||||||||||||||||||||||||||||||
June 30, 2018
|
||||||||||||||||||||||||||||||||||||||||
Balance at
|
||||||||||||||||||||||||||||||||||||||||
April 1, 2018
|
1,319
|
361,005
|
2,598
|
1,035
|
77,930
|
860
|
201,990
|
646,737
|
96,729
|
743,466
|
||||||||||||||||||||||||||||||
Share-based payment
|
–
|
–
|
–
|
–
|
–
|
428
|
–
|
428
|
–
|
428
|
||||||||||||||||||||||||||||||
Dividends to holders
|
||||||||||||||||||||||||||||||||||||||||
of non-controlling
|
||||||||||||||||||||||||||||||||||||||||
interests
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
(21,000
|
)
|
(21,000
|
)
|
||||||||||||||||||||||||||||
Capital reserve in
|
||||||||||||||||||||||||||||||||||||||||
respect of transactions
|
||||||||||||||||||||||||||||||||||||||||
with holders of non-
|
||||||||||||||||||||||||||||||||||||||||
controlling interests
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
741
|
741
|
||||||||||||||||||||||||||||||
Other comprehensive
|
||||||||||||||||||||||||||||||||||||||||
loss for the period,
|
||||||||||||||||||||||||||||||||||||||||
net of tax
|
–
|
–
|
–
|
(789
|
)
|
–
|
–
|
–
|
(789
|
)
|
–
|
(789
|
)
|
|||||||||||||||||||||||||||
Income for the period
|
–
|
–
|
–
|
–
|
–
|
–
|
834
|
834
|
1,317
|
2,151
|
||||||||||||||||||||||||||||||
Balance at
|
||||||||||||||||||||||||||||||||||||||||
June 30, 2018
|
|
1,319
|
|
361,005
|
|
2,598
|
|
246
|
|
77,930
|
|
1,288
|
|
202,824
|
|
647,210
|
|
77,787
|
|
724,997
|
Attributable to the owners of the Company
|
||||||||||||||||||||||||||||||||||||||||
Capital
|
||||||||||||||||||||||||||||||||||||||||
Capital
|
reserve for
|
Capital
reserve for
share-based
payments
|
||||||||||||||||||||||||||||||||||||||
Premium
|
reserve in
|
transactions
|
Non-
|
|||||||||||||||||||||||||||||||||||||
Share
|
on
|
respect of
|
Hedging
|
with
|
Retained
|
controlling
|
Total
|
|||||||||||||||||||||||||||||||||
capital
|
shares
|
merger
|
reserve
|
shareholders
|
earnings
|
Total
|
interests
|
equity
|
||||||||||||||||||||||||||||||||
(Audited)
|
||||||||||||||||||||||||||||||||||||||||
In Thousands of New Israeli Shekels
|
||||||||||||||||||||||||||||||||||||||||
For the year ended
|
||||||||||||||||||||||||||||||||||||||||
December 31, 2018
|
||||||||||||||||||||||||||||||||||||||||
Balance at
|
||||||||||||||||||||||||||||||||||||||||
January 1, 2018
|
1,319
|
361,005
|
2,598
|
(797
|
)
|
77,930
|
548
|
157,697
|
600,300
|
84,239
|
684,539
|
|||||||||||||||||||||||||||||
Acquisition of
|
||||||||||||||||||||||||||||||||||||||||
non-controlling
|
||||||||||||||||||||||||||||||||||||||||
interests
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
17
|
17
|
||||||||||||||||||||||||||||||
Share-based payment
|
–
|
–
|
–
|
–
|
–
|
3,222
|
–
|
3,222
|
–
|
3,222
|
||||||||||||||||||||||||||||||
Capital reserve in
|
||||||||||||||||||||||||||||||||||||||||
respect of
|
||||||||||||||||||||||||||||||||||||||||
transactions with
|
||||||||||||||||||||||||||||||||||||||||
holders of
|
||||||||||||||||||||||||||||||||||||||||
non-controlling
|
||||||||||||||||||||||||||||||||||||||||
interests
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
741
|
741
|
||||||||||||||||||||||||||||||
Dividends to holders
|
||||||||||||||||||||||||||||||||||||||||
of non-controlling
|
||||||||||||||||||||||||||||||||||||||||
interests
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
(29,000
|
)
|
(29,000
|
)
|
||||||||||||||||||||||||||||
Other comprehensive
|
||||||||||||||||||||||||||||||||||||||||
income for the year,
|
||||||||||||||||||||||||||||||||||||||||
net of tax
|
–
|
–
|
–
|
1,248
|
–
|
–
|
–
|
1,248
|
–
|
1,248
|
||||||||||||||||||||||||||||||
Income for the year
|
–
|
–
|
–
|
–
|
–
|
–
|
73,034
|
73,034
|
24,483
|
97,517
|
||||||||||||||||||||||||||||||
Balance at
|
||||||||||||||||||||||||||||||||||||||||
December 31, 2018
|
1,319
|
361,005
|
2,598
|
451
|
77,930
|
3,770
|
230,731
|
677,804
|
80,480
|
758,284
|
For the
|
||||||||||||||||||||
Six Months Ended
|
Three Months Ended
|
Year Ended
|
||||||||||||||||||
June 30
|
June 30
|
December 31
|
||||||||||||||||||
2019
|
2018
|
2019
|
2018
|
2018
|
||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||
In Thousands of New Israeli Shekels
|
||||||||||||||||||||
Cash flows from operating activities
|
||||||||||||||||||||
Income for the period
|
51,759
|
58,917
|
850
|
2,151
|
97,517
|
|||||||||||||||
Adjustments:
|
||||||||||||||||||||
Depreciation and amortization
|
77,490
|
55,724
|
42,282
|
27,957
|
118,922
|
|||||||||||||||
Financing expenses, net
|
53,277
|
48,117
|
34,414
|
32,866
|
90,591
|
|||||||||||||||
Taxes on income
|
18,060
|
22,567
|
465
|
2,525
|
36,803
|
|||||||||||||||
Gain on sale of subsidiary
|
(1,777
|
)
|
–
|
(1,777
|
)
|
–
|
–
|
|||||||||||||
Share-based payment transactions
|
2,363
|
740
|
1,164
|
428
|
3,222
|
|||||||||||||||
Revaluation of derivatives
|
1,080
|
1,569
|
–
|
(306
|
)
|
4,018
|
||||||||||||||
202,252
|
187,634
|
77,398
|
65,621
|
351,073
|
||||||||||||||||
Change in trade and other receivables
|
21,180
|
63,349
|
(2,310
|
)
|
23,089
|
35,306
|
||||||||||||||
Change in trade and other payables
|
45,792
|
(18,271
|
)
|
(542
|
)
|
50,065
|
(75,537
|
)
|
||||||||||||
Change in employee benefits
|
–
|
–
|
–
|
–
|
(103
|
)
|
||||||||||||||
66,972
|
45,078
|
(2,852
|
)
|
73,154
|
(40,334
|
)
|
||||||||||||||
Taxes paid
|
(4,102
|
)
|
–
|
(60
|
)
|
–
|
–
|
|||||||||||||
Net cash provided by operating activities
|
265,122
|
232,712
|
74,486
|
138,775
|
310,736
|
|||||||||||||||
Cash flows from investing activities
|
||||||||||||||||||||
Interest received
|
1,308
|
356
|
271
|
86
|
837
|
|||||||||||||||
Short-term deposits and restricted cash, net
|
(94,844
|
)
|
–
|
(93,952
|
)
|
66
|
(104,101
|
)
|
||||||||||||
Withdrawals from long-term restricted cash
|
1,943
|
40,511
|
429
|
40,511
|
66,450
|
|||||||||||||||
Deposits in long-term restricted cash
|
(54,214
|
)
|
(44,479
|
)
|
(37,978
|
)
|
(39,303
|
)
|
(58,913
|
)
|
||||||||||
Proceeds from sale of subsidiary less cash
|
||||||||||||||||||||
sold
|
2,731
|
–
|
2,731
|
–
|
–
|
|||||||||||||||
Long-term prepaid expenses and loans
|
||||||||||||||||||||
granted
|
–
|
*(8,362
|
)
|
–
|
*(486
|
)
|
(14,834
|
)
|
||||||||||||
Acquisition of property, plant and
|
||||||||||||||||||||
equipment
|
(66,218
|
)
|
*(118,259
|
)
|
(37,528
|
)
|
*(64,846
|
)
|
(249,197
|
)
|
||||||||||
Acquisition of subsidiary, net of cash
|
||||||||||||||||||||
acquired
|
–
|
(8,125
|
)
|
–
|
–
|
(8,125
|
)
|
|||||||||||||
Acquisition of non-controlling interests
|
(1,500
|
)
|
–
|
(1,500
|
)
|
–
|
–
|
|||||||||||||
Acquisition of intangible assets
|
(433
|
)
|
(174
|
)
|
(151
|
)
|
(174
|
)
|
(473
|
)
|
||||||||||
Receipts (payments) in respect of
|
||||||||||||||||||||
derivatives, net
|
(1,327
|
)
|
69
|
(177
|
)
|
(19
|
)
|
114
|
||||||||||||
Net cash used in investing activities
|
(212,554
|
)
|
(138,463
|
)
|
(167,855
|
)
|
(64,165
|
)
|
(368,242
|
)
|
For the
|
||||||||||||||||||||
Six Months Ended
|
Three Months Ended
|
Year Ended
|
||||||||||||||||||
June 30
|
June 30
|
December 31
|
||||||||||||||||||
2019
|
2018
|
2019
|
2018
|
2018
|
||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||
In Thousands of New Israeli Shekels
|
||||||||||||||||||||
Cash flows from financing activities
|
||||||||||||||||||||
Interest paid
|
(38,214
|
)
|
(49,371
|
)
|
(22,690
|
)
|
(33,008
|
)
|
(88,748
|
)
|
||||||||||
Costs paid in advance in respect of taking
|
||||||||||||||||||||
out of loans
|
(1,170
|
)
|
(1,538
|
)
|
(186
|
)
|
(552
|
)
|
(2,328
|
)
|
||||||||||
Dividends paid to the Company’s
|
||||||||||||||||||||
shareholders
|
(36,000
|
)
|
–
|
(36,000
|
)
|
–
|
–
|
|||||||||||||
Dividends paid to holders of non-controlling
|
||||||||||||||||||||
interests
|
(17,600
|
)
|
(21,000
|
)
|
(17,600
|
)
|
(21,000
|
)
|
(29,000
|
)
|
||||||||||
Proceeds from issuance of shares, less
|
||||||||||||||||||||
issuance expenses
|
118,562
|
–
|
118,562
|
–
|
–
|
|||||||||||||||
Receipt of long-term loans
|
–
|
22,000
|
–
|
–
|
122,000
|
|||||||||||||||
Repayment of loans from banks and others
|
(20,148
|
)
|
(56,307
|
)
|
(10,219
|
)
|
(32,400
|
)
|
(101,015
|
)
|
||||||||||
Repayment of debentures
|
(7,360
|
)
|
(11,200
|
)
|
(7,360
|
)
|
(11,200
|
)
|
(22,400
|
)
|
||||||||||
Payment in respect of derivative financial
|
||||||||||||||||||||
instruments, net
|
(714
|
)
|
–
|
(714
|
)
|
–
|
–
|
|||||||||||||
Repayment of principal of lease liabilities
|
(907
|
)
|
–
|
(324
|
)
|
–
|
–
|
|||||||||||||
Net cash provided by (used in) financing
|
||||||||||||||||||||
activities
|
(3,551
|
)
|
(117,416
|
)
|
23,469
|
(98,160
|
)
|
(121,491
|
)
|
|||||||||||
Increase (decrease) in cash and cash
|
||||||||||||||||||||
equivalents
|
49,017
|
(23,167
|
)
|
(69,900
|
)
|
(23,550
|
)
|
(178,994
|
)
|
|||||||||||
Cash and cash equivalents at beginning of
|
||||||||||||||||||||
the period
|
329,950
|
508,181
|
448,687
|
508,625
|
508,181
|
|||||||||||||||
Impact of changes in the currency exchange
|
||||||||||||||||||||
rate on the balances of cash and cash
|
||||||||||||||||||||
equivalents
|
(82
|
)
|
199
|
98
|
138
|
763
|
||||||||||||||
Cash and cash equivalents at end of
|
||||||||||||||||||||
the period
|
378,885
|
485,213
|
378,885
|
485,213
|
329,950
|
Note 1 – |
The Reporting Entity
|
Note 2 – |
Basis of Preparation of the Financial Statements
|
A. |
Declaration of compliance with International Financial Reporting Standards (IFRS)
|
B. |
Functional and presentation currency
|
C. |
Use of estimates and judgment
|
D. |
Reclassification
|
Note 3 – |
Significant Accounting Policies
|
A. |
Transactions with holders of non‑controlling interests
|
B. |
First-time application of new accounting standards, amendments and interpretations
|
(1) |
To use a single discount rate for a portfolio of leases with similar characteristics.
|
(2) |
Not to include initial direct costs in measurement of the usage right asset on the initial application date.
|
Note 3 – |
Significant Accounting Policies (Cont.)
|
B. |
First-time application of new accounting standards, amendments and interpretations (Cont.)
|
1. |
Determination whether an arrangement includes a lease
|
(a) |
The right to obtain essentially all the economic benefits from use of the identified asset; and
|
(b) |
The right to direct the use of the identified asset.
|
2. |
Leased assets and liabilities in respect of a lease
|
Note 3 – |
Significant Accounting Policies (Cont.)
|
B. |
First-time application of new accounting standards, amendments and interpretations (Cont.)
|
3. |
Period of the lease
|
4. |
Variable lease payments
|
5. |
Amortization of usage right asset
|
– |
Land – 25 years.
|
– |
Offices – 9 years.
|
Note 3 – |
Significant Accounting Policies (Cont.)
|
C. |
New Standards and Amendments to Standards Not Yet Adopted
|
Note 4 – |
Financial Instruments
|
At June 30, 2019
|
||||||||
Book
|
Fair
|
|||||||
Value*
|
Value
|
|||||||
In Thousands of NIS
|
||||||||
Loans from banks and financial institutions
|
1,918,227
|
2,284,207
|
||||||
Debentures
|
286,745
|
320,164
|
At June 30, 2018
|
||||||||
Book
|
Fair
|
|||||||
Value*
|
Value
|
|||||||
In Thousands of NIS
|
||||||||
Loans from banks and financial institutions
|
1,836,488
|
2,090,310
|
||||||
Debentures
|
304,798
|
326,216
|
Note 4 – |
Financial Instruments (Cont.)
|
At December 31, 2018
|
||||||||
Book
|
Fair
|
|||||||
Value*
|
Value
|
|||||||
In Thousands of NIS
|
||||||||
Loans from banks and financial institutions
|
1,904,743
|
2,082,275
|
||||||
Debentures
|
293,875
|
303,582
|
Exchange
|
Exchange
|
|||||||||||
rate of
|
rate of
|
|||||||||||
the dollar
|
the euro
|
|||||||||||
CPI
|
against
|
against
|
||||||||||
(in points)
|
shekel
|
shekel
|
||||||||||
June 30, 2019
|
101.7
|
3.566
|
4.062
|
|||||||||
June 30, 2018
|
100.2
|
3.650
|
4.255
|
|||||||||
December 31, 2018
|
100.5
|
3.748
|
4.292
|
|||||||||
Change during the six months ended:
|
||||||||||||
June 30, 2019
|
1.2
|
%
|
(4.9
|
)%
|
(5.4
|
)%
|
||||||
June 30, 2018
|
0.9
|
%
|
5.3
|
%
|
2.5
|
%
|
||||||
Change during the three months ended:
|
||||||||||||
June 30, 2019
|
1.5
|
%
|
(1.8
|
)%
|
(0.4
|
)%
|
||||||
June 30, 2018
|
1.2
|
%
|
3.9
|
%
|
(1.7
|
)%
|
||||||
Change during the year ended:
|
||||||||||||
December 31, 2018
|
1.2
|
%
|
8.1
|
%
|
3.3
|
%
|
Note 5 – |
Additional Information
|
A. |
Further to that stated in Note 24(A)(6) to the Annual Financial Statements, in January 2019, an outline was determined for expansion of the activities of the Group to which the Company belongs (“the Idan Ofer Group” as defined in the
outline) in the area of generation of electricity from an economy‑wide business concentration perspective (hereinafter – “the Business Concentration Outline”). The Business Concentration Outline is intended to allow the Business
Concentration Committee to revise its opinion regarding provision of a conditional license for generation of electricity to Zomet Energy Ltd. (hereinafter – “Zomet”), and to notify the Electricity Authority that it does not see a
preclusion for reasons of economy‑wide business concentration to granting the requested license to Zomet, however this being only after compliance with the conditions provided in the Business Concentration Outline, and to permit the
Business Concentration Committee to notify the Electricity Authority that it does not see a preclusion for reasons of economy‑wide business concentration to allowing the Idan Ofer Group to receive additional licenses in the area of
electricity generation up to the scope provided in the sector arrangement. In April 2019, sale of the shares of the Idan Ofer Group (as defined in the Business Concentration Outline) in Media Network Ltd. was completed, which was
stipulated as a condition in the Business Concentration Outline.
|
Note 5 – |
Additional Information (Cont.)
|
A. |
(Cont.)
|
B. |
Further to that stated in Note 24(A)(3) to the Annual Financial Statements, in January 2019, an amendment was signed to credit framework agreement whereby the operation and maintenance of the Rotem Power Plant will be performed by
Rotem itself in place of Rotem’s operations company as provided in the agreement. As part of the amendment to the agreement, Rotem committed to deposit an additional amount of NIS 4 million in the Owners’ Guarantee Fund. Pursuant to the
amendment, in February 2019 the corporate guarantee provided by Veridis Power Plants Ltd. (the holder of the non‑controlling interests in Rotem) and the Company, in the amount of $1 million was released. Rotem Operations Company is
expected to voluntarily liquidate during 2019.
|
Note 5 – |
Additional Information (Cont.)
|
C. |
Further to that stated in Notes 9(A) and 25(A) to the Annual Financial Statements, in January 2019 an amendment to the set of agreements between Hadera and Hadera Paper Mills was signed providing that the period of the long‑term supply
agreement, whereby Hadera will supply electricity and steam exclusively to Hadera Paper Mills, will be 25 years from the date of commercial operation of the Hadera Power Plant, and the indemnity limitation, in the amount of $2 million,
which Hadera is to pay Hadera Paper Mills was removed, such that the indemnification is now unlimited as to amount.
|
D. |
Further to that stated in Note 25(B) to the Annual Financial Statements, in December 2018, the Electricity Authority published a decision regarding update of the tariffs for 2019, whereby the rate of the generation component was raised
by 3.3% from NIS 281.6 per MWh to NIS 290.9 per MWh.
|
E. |
Further to that stated in Note 25(J) to the Annual Financial Statements, in January 2019, an amendment to the option agreement with Hadera Paper Mills was signed whereby it was agreed to extend the option period to 2019, and where the
amendment provides that notwithstanding that stated in the original option agreement, the Company is to pay Hadera Paper Mills NIS 2.2 million for 2019, and if the Company exercises the option and signs a lease agreement it will pay
Hadera Paper on the financial closing date with a financing party with respect to construction of the Hadera Power Plant, an additional amount of NIS 0.8 million. The amendment to the option provides that no other change applies to the
option periods in respect of the years 2020–2022 and the payment in respect thereof.
|
F. |
In March 2019, OPC Solar Limited Partnership, which is a wholly‑owned limited partnership of the Company (hereinafter – “OPC Solar”) signed a binding memorandum of understanding for sale of all its shares and holdings in Greenday
Renewable Energy Ltd. (hereinafter – “Greenday”), through which the Company operated with respect to initiation of projects in the area of electricity generation activities using photovoltaic technology, to Solgreen Ltd. for a
consideration of about NIS 2.75 million and for another contingent consideration for success as specified in the MoU.
|
G. |
Further to that stated in Note 23(D) to the Annual Financial Statements, in February 2019, the amount of the guarantees to Israel Electric Company, as required as part of Rotem’s electricity purchase agreement, as described in Note
27(C) to the Annual Financial Statements, were updated to NIS 90 million (linked to the CPI).
|
Note 5 – |
Additional Information (Cont.)
|
H. |
In February 2019, the Rating Committee of Midroog Ltd. updated Rotem’s long‑term rating to Aa2 with a stable rating outlook and updated the rating of Rotem’s senior debt at Aa2 from a positive rating outlook to a stable rating outlook.
|
I. |
In March 2019, Rotem declared distribution of a dividend in the amount of NIS 88 million. The share of the Company and of the holder of the non‑controlling interests in the dividend is NIS 70.4 million and NIS 17.6 million,
respectively. The dividend was paid in April 2019.
|
J. |
In March 2019, the Company declared distribution of a dividend, in the amount of NIS 36 million. The dividend was paid in April 2019.
|
K. |
Further to that stated in Note 25D to the annual financial statements, in accordance with the notification provided by the construction contractor of the Hadera Power Plant, the completion date of the Hadera Power Plant is expected to
be delayed beyond the third quarter of 2019. In light of that stated, the Company estimates that the commercial operation date of the Hadera Power Plant is expected to take place in the fourth quarter of 2019. Accordingly, and in
accordance with the agreement with the construction contractor, in the statement of financial position as at June 30, 2019, Hadera recognized an asset (amount) receivable in respect of agreed compensation from the construction contractor
due to the said delay, in the amount of about NIS 22 million – this being against a reduction of the “property, plant and equipment” category.
|
L. |
Further to that stated in Note 25A(2) to the annual financial statements, in light of the delay in the commercial operation date of the Hadera Power Plant, as stated above, the Company will be required to pay compensation to customers.
As at June 30, 2019, the compensation to customers amounted to about NIS 3 million, of which an insignificant amount was paid in the period of the report. Pursuant to the provisions of IFRS 15 relating to “contingent consideration”, on
the date of payment of compensation to customers, the Company recognizes “long‑term prepaid expenses” that are amortized over the period of the contract, commencing from the commercial operation date of the Hadera Power Plant, against a
reduction of “revenues from contracts with customers”.
|
M. |
In May and June 2019, the Company’s Board of Directors and the General Meeting of the Company’s shareholders approved the service and employment conditions of Mr. Avisar Paz as the Chairman of the Company’s Board of Directors,
including, among other things, allotment of 352,424 options (hereinafter – “the Options”). On June 23, 2019, approval of the Stock Exchange was received to register 352,424 shares for trading that will derive from exercise of the Options
and the Options were allotted to Mr. Paz, subsequent to the date of the report, on July 1, 2019. The Options are non‑marketable and each Option is exercisable for one ordinary share of the Company, and in total 352,424 ordinary shares of
the Company of NIS 0.01 par value each. The Options were granted in accordance with the Company’s options’ plan (for details – see Note 17B to the annual financial statements) and under the Capital Track (with a trustee) pursuant to
Section 102 of the Income Tax Ordinance, in four equal tranches. The vesting conditions and expiration dates are as follows:
|
Note 5 – |
Additional Information (Cont.)
|
M. |
(Cont.)
|
Tranche No.
|
Vesting Conditions
|
Expiration Date
|
||
Tranche 1
|
At the end of 12 months from the grant date
|
At the end of 36 months from the vesting date
|
||
Tranche 2
|
At the end of 24 months from the grant date
|
At the end of 24 months from the vesting date
|
||
Tranche 3
|
At the end of 36 months from the grant date
|
At the end of 24 months from the vesting date
|
||
Tranche 4
|
At the end of 48 months from the grant date
|
At the end of 24 months from the vesting date
|
N. |
In June 2019, the Company issued 5,179,147 of the Company’s ordinary shares of NIS 0.01 par value each to three institutional entities based on a price per share of NIS 23.17 per share (the share price on the Stock Exchange at the end
of the trading day preceding the issuance). The proceeds of the issuance, in the amount of about NIS 120 million, less the issuance costs in the amount of about NIS 1.6 million, was recorded to equity.
|
O. |
On June 12, 2019, the Group entered into a hedge agreement with Bank Hapoalim Ltd. for hedge of 80% of the exposure to the CPI with respect to the principal of loans from financial institutions, in exchange for payment of additional
interest of between 1.70% and 1.76%. The Group chose to designate these CPI Transactions as an “accounting hedge”.
|
P. |
In June 2019, in connection with a purchase bid as part of the tender for sale of the Alon Tavor Power Plant, which was published by Israel Electric Company (hereinafter – “the Tender”), the Company provided a financial guarantee
linked to the CPI that is valid up to June 2020, in the amount of about NIS 30 million. Subsequent to the date of the report, in July 2019, the Company was informed that it was declared “Second Qualifier” pursuant to the Tender documents.
|
Note 6 – |
Events Occurring Subsequent to the Date of the Statement of Financial Position
|
A. |
Further to that stated in Note 25(G) to the Annual Financial Statements, in July 2019, the arbitration decision was received, which rejected all the contentions of Tamar Partners against Rotem, and also ruled that Tamar Partners is to
pay Rotem a reimbursement of expenses, in the amount of about £3.3 million (about NIS 15 million), and a payment in respect of supplementation of the interest on the deposit in trust to Libor + 2%, amounting to about NIS 4 million. These
receipts will be recorded in the statement of income for the third quarter of 2019.
|
B. |
In July 2019, a rating of A– was reconfirmed and the rating outlook was updated from “stable” to “positive” for the Company and a rating of A– for the Company’s debentures (Series A) by Maalot. In addition, in August 2019 a rating of
A3 was reconfirmed and the rating outlook was updated to a positive rating outlook by Maalot for the debentures (Series A).
|
C. |
Further to that stated in Note 17B to the annual financial statements, in July 2019, the Company issued 55,289 of the Company’s ordinary shares of NIS 0.01 par value each, to seven managers and officers in the Group, in light of the
vesting of the first tranche of the RSUs (Restricted Share Units), which were granted to them as part of the equity remuneration plan for Company employees.
|
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