PV projects buoy Shikun & Binui's Q2 results

Israeli construction and infrastructure giant Shikun & Binui saw an impressive second-quarter revenue increase of 270% in its renewable energy division due in large part to construction of photovoltaic plants.

The Tel Aviv-based company’s renewable energy unit made ILS 85 million ($) from April to June compared to ILS 23 million in the same period last year, resulting in an operating profit of ILS 12 million, up from a loss of ILS 6 million in the second quarter of 2012.

In June, Negev Energy, a joint company established by Shikun & Binui and Spanish group Abengoa, won a contract to build a 110 MW concentrated solar power (CSP) plant in southern Israel.

Renewable energy proved one of the strongest growing segments for the group, which suffered revenue declines due to its real estate and construction activities.

Shikun & Binui on Sunday reported total revenue of ILS 1.75 billion for the quarter, an increase of 8.3% while net profit fell 26% to ILS 96 million. Operating profit at the group, which accounted for 11.5% of revenue, declined 17% to ILS 203 million. The company attributed the drop in profit to the real estate development in Israel as well as to its infrastructure and construction operations outside of Israel.

"The Group is presenting net profit, favorable cash flows from operating activities and an impressive dividend yield,” said Tal Raz, Shikun & Binui’s chief financial officer.

Raz added that the group was in the midst of restructuring its public debt, adding that Israeli credit rating agency and Moody’s subsidiary Midroog had upgraded the group’s debt from A2 to A1 with a stable outlook.