ALON BLUE SQUARE ISRAEL LTD 
By ROSH HA'AYIN, Israel, May 30, 2013 /PRNewswire/ --
-- Cash flows from operating activity amounted to NIS 309 million in this
quarter, an increase of 93%, the Adjusted EBITDA in this quarter
amounted to NIS 98 million compared to NIS 115 million in the
corresponding quarter last year.
-- Decrease in financial debt, net of NIS 250 million compared to December
31, 2012.
-- In the Fueling and commercial sites: An improvement in the operating
profit in this quarter compared to the corresponding quarter last year.
The operating profit in this quarter amounted to NIS 37 million
(increase of 21%). The Adjusted EBITDA in this quarter amounted to NIS
64 million compared to NIS 57 million in the corresponding quarter last
year.
-- In the Supermarkets segment: An activity to increase the market share of
Mega resulted, for the first time in six quarters, an increase in the
same stores sales (SSS) in this quarter compared to the corresponding
quarter last year. This activity included, among others, the reduction
of prices at an average rate of 1.8%.
-- In the Real Estate segment: BSRE presents a continuing increase in NOI
(NIS 53 million in this quarter). The Company continues the development
and the betterment of projects under construction and completed in this
quarter, the sale of 50% of the Comverse Building in Ra'anana in
consideration of NIS 51 million.
-- In the Non Food segment (from continuing operations): an increase in
sales of approximately 14% and increase in operating profit before other
expenses of 6% in this quarter compared to the corresponding quarter
last year.
Segment Profits:
Operating Profit in
millions of NIS Q1 2013 Q1 2012 Rate of change
Fueling and Commercial
sites 36.6 28.5 28%
Supermarkets (3.1) 16.5 -
Non-Food (from continuing
operations) 7.4 7.0 6%
Real Estate 4.7 4.3 9%
Comments of Management
Mr. David Weissman, CEO and Chief Business Officer
"In the current quarter we put a special emphasis on the improvement of cash flows from operating activity which amounted to NIS 309 million in this quarter, an increase of 93% compared to the corresponding quarter. The impressive improvement in the cash flows from operating activity derived from measures taken to improve the working capital and reducing customer days and inventory.
Dor Alon continues to take efficacy measures that resulted in the improvement of operating results of approximately 20% and an increase in net income of 49% and an impressive increase in cash flows from operating activity of NIS 174 million compared to the corresponding quarter last year.
BSRE continues to present an improvement in its current activity and continues the development and initiation of 7 projects. In January 2013, the Company admitted Harel, Insurance Company, as a partner (50%) in Comverse Building, which is under construction.
The Supermarkets segment is on the change of trend and for the first time after six quarters, Mega moved in the SSS stores to a positive increase while Mega Bool leads the change-over with an increase of over 7% in the SSS stores while improving all other operating criteria in all the chain, an increase in sales per sq.m of 3.9% and an increase in sales per position of 4.2%. The change of trend came at the expense of the gross profit while at the same time the Company works on an innovative strategic plan with international sources. In June, the Company intends to present the strategic plan for the coming years, which includes operating and structural changes in Mega.
In the Non Food segment, the Company is in merger procedures with BEE Retail and Mega, such that the logistic center and headquarters shall be assimilated in Mega and Na'aman shall become a subsidiary of Mega. In this quarter, Na'aman presents an improvement in its results compared to the corresponding quarter last year, which derives from an increase in sales following marketing efforts and the Passover holiday.
YouPhone brand turned into a legitimate factor, as a cellular network, which brings innovation and the lowest prices in the market. The rate of joining new customers stands at 20,000 per quarter. The establishment costs of the company are part of the Company's operating expenses."
Results for the first quarter of 2013[2]
Gross revenues
Revenues (including government levies) in the first quarter of 2013 amounted to NIS 3,792.8 million (U.S. $1,039.7 million) as compared to revenues of NIS 3,826.2 million in the comparable quarter last year, a decrease of 0.9%. The decrease mainly derives from decrease in revenues of Dor Alon compared to the corresponding quarter last year.
Revenues from sales, net
Revenues of the Fueling and Commercial sites segment - amounted in this quarter to NIS 1,337.5 million (U.S. $366.6 million) as compared to NIS 1,387.6 million in the corresponding quarter last year, a decrease of 3.6%. The main decrease was due to discontinued sales to the Palestinian authority.
Revenues of the Supermarkets segment - amounted in this quarter to NIS 1,627.6 million (U.S. $446.2 million) as compared to NIS 1,626.0 million in the corresponding quarter last year, with no material change. The sales of the same store sales (SSS) increased in this quarter at a rate of 2.1% compared to the corresponding period last year and were offset from a decrease of 3% in selling spaces following the closing of branches during the last 15 months.
Revenues of the Non-Food segment - an increase in revenues by 22% from NIS 87.6 million in the first quarter of 2012 to NIS 106.9 million (U.S. $29.3 million) in the current quarter. The increase in revenues is mainly due to an increase in sales in the home activity and in the textile activity resulting from expanding the marketing activities and the Passover holiday timing that occurred this year earlier than last year.
Revenues of the Real Estate segment - an increase in rental income of 31% from NIS 7.2 million in the first quarter of 2012 to NIS 9.4 million (U.S. $2.6 million) in the current quarter. The increase in rental income in this quarter mainly derives from increase in spaces rented to external parties.
Gross profit in the first quarter of 2013 amounted to NIS 656.6 million (U.S. $180.0 million) (21.3% of revenues) as compared to gross profit of NIS 674.2 million (21.7% of revenues) in the comparable quarter last year. The decrease in the gross profit compared to the corresponding quarter last year was mainly due to the decrease in the gross profit in the Supermarkets segment.
In the Fueling and Commercial sites segment, gross profit amounted to NIS 190.0 million (U.S. $52.1 million), (14.2% of revenues) compared to NIS 184.2 million in the comparable quarter last year (13.3% of revenues). The increase in the gross profit mainly derived from the increased profitability of the convenience stores.
In the Supermarkets segment, gross profit amounted to NIS 406.9 million (U.S. $111.5 million), (25.0% of revenues) compared to NIS 436.6 million in the first quarter of 2012 (26.8% of revenues), a decrease of 6.8% stemming from a decrease in the gross profit following the reduction of margins.
In the Non Food segment, gross profit amounted to NIS 53.0 million (U.S. $14.5 million), (49.6% of revenues) compared to NIS 46.3 million in the first quarter of 2012 (52.8% of revenues), an increase of 14.5% that mainly derives from increase in sales, as aforementioned.
Selling, general and administrative expenses in the first quarter of 2013 amounted to NIS 636.2 million (U.S. $174.4 million) (20.6% of revenues), compared to expenses of NIS 639.4 million (20.6% of revenues) in the comparable quarter last year.
In the Fueling and Commercial sites segment, these expenses amounted to NIS 153.4 million (U.S. $42.1 million) compared to NIS 155.6 million in the first quarter of 2012, a decrease of 1.4%, mainly deriving from efficiency measures.
In the Supermarkets segment, selling, general and administrative expenses amounted to NIS 409.9 million (U.S. $112.4 million) compared to expenses of NIS 420.0 million in the first quarter of 2012, a decrease of 2.4% in expenses that mainly derives from efficacy measures and exiting branches.
In the Non Food segment, these expenses amounted to NIS 45.6 million (U.S. $12.5 million) compared to NIS 39.2 million in the first quarter of 2012, an increase of 16.2% in expenses that mainly derives from increase in sales and increase in marketing and advertising expenses.
In the Real Estate segment, these expenses amounted to NIS 4.7 million (U.S. $1.3 million) compared to NIS 2.8 million in the first quarter of 2012.
Operating profit (before other gains and losses and changes in fair value of investment property) in the first quarter of 2013 amounted to NIS 20.4 million (U.S. $5.6 million) (0.7% of revenues) as compared to NIS 34.8 million (1.1% of revenues) in the comparable quarter last year, a decrease of 41.4%. The decrease in the operating profit was mainly due to losses incurred by the Supermarkets segment.
In the Fueling and Commercial sites segment, operating profit in this quarter amounted to NIS 36.6 million (U.S. $10.0 million) compared to operating profit of NIS 28.5 million in the first quarter of 2012, an increase of 28.1%. The increase derives from improvement of gross profit and from decrease in selling, general and administrative expenses.
In the Supermarkets segment, operating loss amounted to NIS 3.0 million (U.S. $0.8 million) compared to operating profit of NIS 16.5 in the first quarter of 2012. The transfer to a loss derives from erosion of gross profit rate and was partly offset from decrease in selling, general and administrative expenses.
In the Non Food segment, operating profit amounted to NIS 7.4 million (U.S. $2.0 million) as compared to an operating profit of NIS 7.0 million in the first quarter of 2012, an increase of 5.9%. The increase in the operating profit derives from increase in sales and was partly offset from increase in selling, general and administrative expenses.
In the Real Estate segment, the operating profit in this quarter amounted to NIS 4.7 million (U.S. $1.3 million) compared to NIS 4.3 million in the first quarter of 2012, an increase of 9.0%. The increase in the operating profit derives from increase in rental income and was partly offset from increase in selling, general and administrative expenses.
Changes in fair value of investment property in this quarter the Company recorded a profit in the amount of NIS 5.5 million (U.S. $1.5 million) compared to a profit of NIS 2.7 million in the first quarter of 2012. The main profit in this quarter derives from revaluation of Comverse Building in Ra'anana, which half was realized in this quarter.
Other income (expenses), net other expenses in this quarter amounted to NIS 6.3 million (U.S. $1.7 million) compared to other expenses of NIS 0.1 million in the first quarter of 2012.
Operating profit amounted to NIS 19.3 million (U.S. $5.3 million) (0.6% of revenues) as compared to operating profit of NIS 40.8 million (1.3% of revenues) in the first quarter of 2012, a decrease of 52.7%.
Finance costs, net in this quarter amounted to NIS 53.8 million (U.S. $14.8 million) as compared to net finance costs of NIS 39.6 million in the first quarter of 2012. The increase in finance costs, net derives from an increase in the Company's indebtedness and from a decrease in finance income.
Taxes on income tax benefit in this quarter amounted to NIS 2.6 million (U.S. $0.7 million) as compared to tax benefit of NIS 4.4 million in the first quarter of 2012.
Income (loss) from continuing operation in this quarter loss amounted to NIS 31.9 million (U.S. $8.8 million) compared to an income of NIS 5.6 million in the first quarter of 2012. The loss in this quarter attributed to the Company's shareholders amounted to NIS 39.6 million (U.S. $10.9 million) or NIS 0.60 per share (U.S. $0.17) and the income attributed to non-controlling interests amounted to NIS 7.7 million (U.S. $2.1 million).
Net loss from discontinued operation in this quarter amounted to NIS 2.0 million (U.S. $0.6 million) or NIS 0.03 per share (U.S. $0.01) compared to a loss of NIS 3.4 in the first quarter of 2012, which attributed in its entirety to the Company's shareholders.
Cash flows for the first quarter of 2013
Cash flows from operating activities: Net cash flow provided by operating activities amounted to NIS 309.6 million (U.S. $84.8 million) in the first quarter of 2013 compared to NIS 159.6 million from operating activities in the comparable quarter last year. The main increase derives from a decrease in working capital needs following measures taken to reduce customer days and reduction of inventories in the amount of NIS 128 million (U.S. $35.1 million) and from tax refunds in this quarter of NIS 42.8 million (U.S. $11.7 million) compared to tax payments of NIS 10.0 million in the corresponding quarter last year offset by a decrease in operating profit of NIS 14.4 million (U.S. $3.9 million).
Cash flows used in investing activities: Net cash flows used in investing activities amounted to NIS 47.2 million (U.S. $12.9 million) in this quarter as compared to net cash used in investing activities of NIS 151.3 million in the comparable quarter. Cash flows used in investing activities in this quarter mainly included the purchase of investment property, property and equipment and intangible assets of total NIS 50.4 million (U.S. $13.8 million), the grant of long term loans of NIS 26.8 million (U.S. $7.3 million) and was offset by proceeds from realization of investment property of NIS 45.1 million (U.S. $12.4 million), repayment of long term loans of NIS 17.5 million (U.S. $4.8 million), and interest received of NIS 8.7 million (U.S. $2.4 million). In the first quarter of 2012 the cash flows used in investing activities mainly included the purchase of property and equipment, investment property and intangible assets of NIS 97.1 million, grant of long term loans of NIS 23.6 million and investment in securities in the amount of NIS 95.2 million, net of proceeds from realization of securities in the amount of NIS 65.2 million.
Cash flows used in financing activities: Net cash flows used in financing activities amounted to NIS 97.9 million (U.S. $26.8 million) in this quarter as compared to net cash flows deriving from financing activities of NIS 13.1 million in the corresponding quarter last year. The cash flows used in financing activities this quarter mainly included interest payments of NIS 62.5 million (U.S. $17.1 million), decrease in short term bank credit, net of NIS 172.2 million (U.S. $47.2 million), repayment of loans of NIS 53.8 million (U.S. $14.7 million) and was partly offset by issuance of debentures of NIS 152.3 million (U.S. $41.7 million) and receiving loans of NIS 40.7 million (U.S. $11.1 million). The net cash flows deriving from financing activities in the first quarter of 2012 included mainly the issuance of debentures of NIS 264.2 million and was offset by repayment of loans of NIS 119.0 million, decrease in short term credit, net, in the amount of NIS 71.3 million and from interest payments of NIS 56.3 million.
Additional Information
1. Adjusted EBITDA (Earnings before Interest, Taxes, Depreciation, and
Amortization)[3] in the first quarter of 2013 adjusted EBITDA was NIS
98.6 million (U.S. $27.0 million) (3.2% of revenues) compared to NIS
114.7 million (3.7% of revenues) in the first quarter of 2012.
Events during the reporting period
General
a. Effective January 1, 2013, the Company applies IFRS 11 "Joint Arrangements". The application is retrospective. Jointly controlled entities presented in the past in the consolidated statements using the proportionate consolidation method are presented in these financial statements as part of the associates.
The following presents the effect on the financial statements as of December 31, 2012 and March 31, 2012 and for the periods then ended:
The effect on the statement of financial position:
December 31, 2012
(Unaudited)
----------
As previously The effect of As reported after
reported retrospective the application
application of the standard
----------- ---------------
NIS in millions
---------------
Current assets 3,387 (53) 3,334
----- --- -----
Non-current assets
Investment in
associates 349 572 921
--- --- ---
Other non-current
assets 5,757 (798) 4,959
----- ---- -----
Current liabilities 4,074 (80) 3,994
----- --- -----
Non-current liabilities 3,813 (180) 3,633
----- ---- -----
Equity 1,606 (19) 1,587
===== === =====
March 31, 2012
(Unaudited)
----------
As previously The effect of As reported after
reported retrospective the application
application of the standard
----------- ---------------
NIS in millions
---------------
Current assets 3,739 (68) 3,671
----- --- -----
Noncurrent assets
Investment in
associates 206 554 760
--- --- ---
Other non-current
assets 5,793 (765) 5,028
----- ---- -----
Current liabilities 4,110 (123) 3,987
----- ---- -----
Non-current liabilities 4,079 (155) 3,924
----- ---- -----
Equity 1,549 (1) 1,548
===== === =====
Effect on the statement of income:
Year ended December 31, 2012
(Unaudited)
----------
As previously The effect of As reported after
reported retrospective the application
application of the standard
----------- ---------------
NIS in millions
---------------
Revenues,
net 12,850 (165) 12,685
Gross
profit 2,842 (90) 2,752
Operating
profit
before
changes 184 (11) 173
Share
in
gains
of
associates - 87 87
Increase
in
fair
value
of
investment 107 (90) 17
property,
net
Other
gains,
net 23 (19) 4
--- --- ---
Operating
profit
after
changes 314 (33) 281
Finance
expenses,
net (246) 7 (239)
Tax
benefit
(taxes
on
income) (16) 19 3
Share
in
gains
of
associates 12 (12) -
--- --- ---
Net
income
from
continuing
operation 64 (19) 45
=== === ===
The main decrease in the profit in 2012 derives from eliminating profit, loss of control in a jointly controlled entity as a result of applying IFRS 11.
Three months ended March 31, 2012
(Unaudited)
----------
As previously The effect of As reported after
reported retrospective the application
application of the standard
----------- ---------------
NIS in millions
---------------
Revenues,
net 3,152 (44) 3,108
Gross
profit 696 (22) 674
Operating
profit
before
changes 38 (3) 35
Share
in
gains
of
associates - 3 3
Increase
in
fair
value
of
investment 3 - 3
property,
net
Other
gains,
net - - -
--- --- ---
Operating
profit
after
changes 41 - 41
Finance
expenses,
net (42) 2 (40)
Tax
benefit 4 - 4
Share
in
gains
of
associates 3 (3) -
--- --- ---
Net
income
from
continuing
operation 6 (1) 5
=== === ===
Effect on the statement of cash flows:
Year ended December 31, 2012
(Unaudited)
----------
As previously The effect of As reported after
reported retrospective the application
application of the standard
----------- ---------------
NIS in millions
---------------
Net cash
provided by
operating
activity 299 203 502
Net cash
used in
investing
activity (573) 177 (396)
Net cash
provided by
financing
activity 482 (381) 101
--- ---- ---
Increase in
cash and
cash
equivalents 208 (1) 207
Balance of
cash and
cash
equivalents
at 74 (22) 52
the
beginning
of the year
Translation
differences
on cash and
cash - - -
equivalents
Balance of
cash and
cash
equivalents
at 282 (23) 259
the end of
the year
Three months ended March 31, 2012
(Unaudited)
----------
As previously The effect of As reported after
reported retrospective the application
application of the standard
----------- ---------------
NIS in millions
---------------
Net cash
provided by
operating
activity 157 2 159
Net cash
used in
investing
activity (156) 5 (151)
Net cash
provided by
financing
activity 21 (8) 13
--- --- ---
Increase in
cash and
cash
equivalents 22 (1) 21
Balance of
cash and
cash
equivalents
at the 74 (22) 52
beginning of
the period
Translation
differences
on cash and
cash - - -
equivalents
Balance of
cash and
cash
equivalents 96 (23) 73
at the end
of the
period
b. On March 22, 2013, Mrs. Limor Ganot was appointed as co-CEO of the Company. The appointment is in effect from April 1, 2013.
c. On April 24, 2013, the Company changed its name from "Alon Holdings Blue Square Israel Ltd" to "Alon Blue Square Israel Ltd".
d. The Company resolved to merge BEE group into Mega Retail. The merger will be consummated in 2013.
Fueling and Commercial sites segment
a. As of March 31, 2013, Dor Alon operated 203 fueling stations and 209 convenience stores in various formats.
b. Dor Alon declared a dividend of NIS 20 million (U.S $5.5 million). The Company's share is NIS 15.7 million (U.S $4.3 million). The dividend was paid on April 9, 2013.
Supermarkets segment
a. As of March 31, 2013, the Company operated 211 supermarkets divided as follows: Mega In Town - 119; Mega Bool - 66; Zol Beshefa - 15; Eden Teva Market - 20 of which 9 Eden within Mega.
b. As of March 31, 2013, the Company operated branches in a total area of 365,400 sq.m. Sales per meter amounted in the first quarter of 2013 to NIS 4,460 (U.S. $1,223) compared to NIS 4,293 in the corresponding quarter last year.
During the quarter ending on March 31, 2013, one branch with a total area of 3,600 sq.m was closed.
Non Food segment
a. As of March 31, 2013, Bee Group operates 138 branches (of which 22 franchised).
b. Discontinued activity - in view of the Company's resolution from December 2012, to realize Kfar Hasha'shuim (Kfar), the results of Kfar are included in the consolidated statement of operations under "Loss from discontinued operation (after tax)".
Following are the operating results of Kfar for the reported periods:
Year ended Three months
ended
December 31 March 31
--------
2012 2012 2013
---- ---- ----
(Audited) (Unaudited)
-------- ----------
Sales 115,214 26,511 33,155
Gross profit 23,308 2,493 6,138
Operating profit (loss) (12,648) (2,373) 25
Net loss included in loss
from (22,468) (3,403) (2,018)
discontinued operations
Real Estate segment
a. Comverse Building
On January 21, 2013, BSRE entered into an agreement for the sale of half of its rights in the property to Harel Investments, Insurance and Financial Services Ltd. (Harel) in return for NIS 51 million and shall bear 50% of the remaining establishment costs. In addition, BSRE is entitled to an additional consideration for building rights of 2,500 sq.m that were not yet utilized and such consideration is to be payable according to the agreement. The agreement further determines that if the building rights in the real estate are increased, Harel shall have the option to purchase 50% of these rights at a consideration to be determined according to the value of the rights. A collaboration agreement was signed between BSRE and Harel. The above consideration reflects the fair value of part of the real estate that was realized and therefore, in the reported period, the Company recorded gain from change in value of investment property of NIS 5.5 million in addition to a gain that was recorded in 2012 in the amount of NIS 4 million.
b. Cohen Building in Petach Tikva
In November 2012, BSRE granted an option to purchase the property in Petach Tikva subject to various conditions in return for NIS 56 million. On March 6, 2013, the option was exercised and a sale agreement was signed. The purchasers did not complete the first payment according to the date set forth in the sale agreement. An extension was granted to the purchasers to complete the payment and the rest of the payments according to the agreement.
c. BSRE declared a dividend of NIS 50 million (U.S. $13.7 million), the Company's share amounts to NIS 39 million (U.S. $10.7 million). The dividend was paid on April 23, 2013.
Issuance of bonds
a. On January 31, 2013, the bonds series of Dor Alon (Series C and D) was expanded by a private offering of NIS 21 million par value of bonds (Series C) to institutional investors for 97.95% of their par value, reflecting a return of 5.3% and NIS 129 million par value of bonds (Series D) for 103.8% of their par value, reflecting a return of 5.2%.
b. On May 13, 2013, Midroog announced the ratification of the A2 rating on bonds (series A and C) issued by the Company, while changing the outlook from stable to negative. In addition, Midroog ratifies the P-1 rating with for commercial paper issued by the Company in the amount of NIS 75 million up to NIS 120 million.
c. On May 20, 2013 the bonds series of BSRE (Series D) was expanded by a privet offering of NIS 76 million par value of bonds (Series D) to institutional investors for 117.9% of their par value, reflecting a return of 2.8%.
d. On May 28, 2013, Midroog announced the ratification of the A1 rating on bonds (series A to D) issued by BSRE, while changing the outlook from negative to stable. In addition, Midroog granted A1 rating with stable outlook for bonds up to NIS 100 million par value which BSRE intends to issue by expanding one of its existing series.
Post balance sheet events
On May 7, 2013, the Company sold 3.5% of BSRE shares for NIS 49 million. After the sale, the Company holds 74.76% of BSRE share capital.
NOTE A: Convenience Translation to Dollars
The convenience translation of New Israeli Shekel (NIS) into U.S. dollars was made at the exchange rate prevailing at March 31, 2013: U.S. $1.00 equals NIS 3.648. The translation was made solely for the convenience of the reader.
Alon Blue Square Israel Ltd. (hereinafter: "Alon Blue Square") is the leading retail company in the State of Israel and operates in four reporting segments: In its supermarket segment, Alon Blue Square, as a pioneer in the modern food retail, through its 100% subsidiary, Mega Retail Ltd., currently operates 211 supermarkets under different formats, each offering a wide range of food products, "Near Food" products and "Non-Food" products at varying levels of service and pricing. In its "Non-Food" segment, Alon Blue Square, through its 100% subsidiary BEE Group Retail Ltd., operates specialist outlets in self-operation and franchises and offers a wide range of "Non-Food" products as retailer and wholesaler. In the Fueling and Commercial Sites segment, through its 78.43% subsidiary, which is listed on the Tel Aviv stock exchange ("TASE"), Dor Alon Energy in Israel (1988) Ltd is one of the four largest fuel retail companies in Israel based on the number of petrol stations and a leader in the field of convenience stores. Dor Alon operates a chain of 203 petrol stations and 209 convenience stores in different formats in Israel. In its Real Estate segment, Alon Blue Square, through its TASE traded 74.76% subsidiary Blue Square Real Estate Ltd., owns, leases and develops yield generating commercial properties and projects. In other segments, Alon Blue Square through its 100% subsidiary, Alon Cellular Ltd, operates an MVNO network in Israel and through Diners Club Israel Ltd., an associate held at 49%, which operates in the sector of issuance and clearance of YOU credit cards to the customer club members of the group.
Forward-looking statements
This press release contains forward-looking statements within the meaning of safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, plans or projections about our business, our future revenues, expenses and profitability. Forward-looking statements may be, but are not necessarily, identified by the use of forward-looking terminology such as "may," "anticipates," "estimates," "expects," "intends," "plans," "believes," and words and terms of similar substance. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual events, results, performance, circumstance and achievements to be materially different from any future events, results, performance, circumstance and achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, the following: the effect of the economic conditions in Israel on the sales in our stores and of our products and on our profitability; our ability to compete effectively against low-priced supermarkets, large fuel companies and our other competitors; enactment of new laws and regulations, including the enactment of recommendations of governmental appointed committees and regulations with respect to the procurement of petroleum products by fuel companies and the price of petroleum products that are subject to regulation; quarterly fluctuations in our operating results that may cause volatility of our ADS and share price; fluctuations in the price of petroleum products and increases in excise tax rates imposed on the sale of petroleum products in Israel; risks associated with our dependence on a limited number of key suppliers for products that we sell in our stores; the effect of an increase in the minimum wage in Israel on our operating results; the effect of any actions taken by the Israeli Antitrust Authority on our ability to execute our business strategy and on our profitability; the effect of increases in oil, raw material and product prices in recent years; the effects of damage to our reputation or to the reputation of our store brands due to reports in the media or otherwise; government policies with respect to residential building may have a negative impact on our operations in residential building, and other risks, uncertainties and factors disclosed in our filings with the U.S. Securities and Exchange Commission (SEC), including, but not limited to, risks, uncertainties and factors identified under the heading "Risk Factors" in our annual report on Form 20-F for the year ended December 31, 2012. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except for our ongoing obligations to disclose material information under the applicable securities laws, we undertake no obligation to update the forward-looking information contained in this press release.
ALON BLUE SQUARE ISRAEL LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF MARCH 31, 2013
(UNAUDITED)
Convenience translation
December 31, March 31, March 31,
---------- ----------
2012* 2012* 2013 2013
---- ---- ---- ----
NIS U.S. dollars
--- ------------
In thousands
------------
A s s e t s
CURRENT ASSETS:
Cash and cash equivalents 261,674 86,953 419,178 114,906
Investment in securities 325,313 330,950 360,863 98,921
Short-term bank deposits 96,146 96,331 103,487 28,368
Trade receivables 1,415,828 1,682,263 1,440,508 394,876
Other accounts receivable including 271,258 573,781 577,447 158,291
current maturities of long term
loans granted
Assets classified as held for sale 94,216 - 45,600 12,500
Assets of disposal groups classified as 133,915 - 136,555 37,433
held for sale
Income taxes receivable 90,882 127,096 34,941 9,578
Inventories 644,809 773,872 609,701 167,133
------- ------- ------- -------
3,334,041 3,728,280 1,022,006
3,671,246
---------
NON-CURRENT ASSETS:
Investments in associates 921,227 759,716 919,493 252,054
Derivative financial instruments 1,790 1,312 3,374 925
Real estate inventories 106,064 99,683 105,641 28,958
Investments in securities 48,609 36,419 54,300 14,885
Loans receivable, net of current 200,294 185,984 204,960 56,184
maturities
Property and equipment, net 2,651,678 2,767,739 2,618,968 717,919
Investment property 543,873 489,495 561,732 153,984
Intangible assets, net 1,258,828 1,305,650 1,244,701 341,202
Other long-term receivables 33,251 35,457 36,484 10,001
Deferred taxes 114,805 106,741 126,191 34,592
------- ------- ------- ------
5,880,419 5,875,844 1,610,704
5,788,196
---------
Total assets 9,214,460 9,604,124 2,632,710
9,459,442
=========
ALON BLUE SQUARE ISRAEL LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF MARCH 31, 2013
(UNAUDITED)
Convenience
translation
December 31, March 31, March 31,
----------
2012* 2012* 2013 2013
---- ---- ---- ----
NIS U.S. dollars
--- ------------
In thousands
------------
Liabilities and shareholders' equity
CURRENT LIABILITIES:
Credit and loans from banks and others 1,129,526 924,129 947,670 259,778
Current maturities of debentures and 556,188 212,173 593,947 162,814
convertible debentures
Current maturities of long-term loans 247,581 266,987 235,913 64,669
from banks
Trade payables 1,228,013 1,585,458 1,441,889 395,255
Other accounts payable and accrued 628,915 886,607 897,129 245,926
expenses
Customers' deposits 28,011 27,692 27,881 7,643
Derivative financial instruments 17,566 11,002 17,658 4,840
Income taxes payable 10,124 5,001 9,213 2,525
Provisions 60,578 67,689 60,221 16,508
Liabilities of disposal groups 87,794 - 89,870 24,635
classified as held for sale
3,994,296 3,986,738 4,321,391 1,184,593
--------- --------- --------- ---------
NON CURRENT LIABILITIES:
Long-term loans from banks and others, net of current
maturities 1,134,436 1,148,293 1,133,440 310,702
Convertible debentures, net of current 90,402 118,671 90,200 24,726
maturities
Debentures, net of current maturities 2,048,829 2,296,088 2,163,434 593,046
Other liabilities 142,016 157,234 139,010 38,106
Derivative financial instruments 6,382 13,787 3,823 1,048
Liabilities in respect of employee 69,457 58,962 69,636 19,089
benefits, net of amounts funded
Deferred taxes 141,093 131,189 143,170 39,246
------- ------- ------- ------
3,632,615 3,924,224 3,742,713 1,025,963
--------- --------- --------- ---------
Total liabilities 7,626,911 7,910,962 8,064,104 2,210,556
--------- --------- --------- ---------
EQUITY:
Equity attributed to equity holders of
the Company:
Ordinary shares of NIS 1 par value 79,881 79,881 79,881 21,897
Additional paid-in capital 1,219,279 1,219,279 1,219,279 334,232
Other reserves 9,245 (10,321) 10,092 2,766
Accumulated deficit (129,666) (112,801) (170,948) (46,861)
-------- -------- -------- -------
1,178,739 1,176,038 1,138,304 312,034
Non-controlling interests 408,810 372,442 401,716 110,120
------- ------- ------- -------
Total equity 1,587,549 1,548,480 1,540,020 422,154
--------- --------- --------- -------
Total liabilities and equity 9,214,460 9,459,442 9,604,124 2,632,710
========= ========= ========= =========
* Retroactive application, see events during the reporting period
ALON BLUE SQUARE ISRAEL LTD.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)
Convenience
translation
Year ended Three months for the three
months
December 31, ended March
31, ended March 31,
------------
2012* 2012* 2013 2013
---- ---- ---- ----
In thousands (except per share data)
-----------------------------------
Revenues 15,640,331 3,826,175 3,792,802 1,039,694
Less - government levies 2,955,154 717,857 703,534 192,855
--------- ------- ------- -------
Net revenues 12,685,177 3,108,318 3,089,268 846,839
Cost of sales 9,932,721 2,434,157 2,432,676 666,852
--------- --------- --------- -------
Gross profit 2,752,456 674,161 656,592 179,987
Selling, general and administrative expenses 2,579,770 639,385 636,224 174,404
--------- ------- ------- -------
Operating profit before other gains and losses 172,686 34,776 20,368 5,583
and changes in fair value of investment
property
Other gains 19,941 - 30 8
Other losses (15,663) (72) (6,304) (1,728)
Increase in fair value of investment property, 16,874 2,685 5,559 1,524
net
Share in gains (losses) of associates 87,060 3,380 (389) (107)
------ ----- ---- ----
Operating profit 280,898 40,769 19,264 5,280
Finance income 83,002 21,064 16,789 4,602
Finance expenses (321,930) (60,647) (70,639) (19,364)
-------- ------- ------- -------
Finance expenses, net (238,928) (39,583) (53,850) (14,762)
-------- ------- ------- -------
Income before taxes on income 41,970 1,186 (34,586) (9,482)
Taxes on income (2,863) (4,381) (2,638) (723)
------ ------ ------ ----
Net income (loss) from continued operations 44,833 5,567 (31,948) (8,759)
Net loss from discontinued operation 22,468 3,403 2,018 553
------ ----- ----- ---
22,365 2,164 (33,966) (9,312)
====== ===== ======= ======
Attributable to:
Equity holders of the Company (17,907) (6,829) (41,655) (11,418)
------- ------ ------- -------
Non-controlling interests 40,272 8,993 7,689 2,106
------ ----- ----- -----
Earnings per ordinary share or ADS
attributable to equity holders of the
company
Basic and fully diluted
Continuing operations 0.29 (0.05) (0.60) (0.16)
Discontinued operations (0.34) (0.05) (0.03) (0.01)
----- ----- ----- -----
(0.05) (0.10) (0.63) (0.17)
===== ===== ===== =====
Weighted average number of shares or ADSs
used for computation of earnings per share:
Basic and fully diluted 65,954 65,954 65,954 65,954
====== ====== ====== ======
ALON BLUE SQUARE ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)
Convenience
translation
Year ended Three months ended for the three
months ended
December 31, March 31, March 31,
2012* 2012* 2013 2013
---- ---- ---- ----
NIS in thousands U.S. dollars in
thousands
---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Income (loss) before taxes on income from 41,970 1,186 (34,586) (9,482)
continuing operations
Loss before taxes from discontinued operation (17,468) (3,403) (2,018) (553)
Income tax (paid) received, net 18,714 (10,018) 42,828 11,740
Adjustments for cash generated from operations 458,957 171,845 303,351 83,158
------- ------- ------- ------
Net cash provided by operating activities 502,173 159,610 309,575 84,863
------- ------- ------- ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (164,458) (73,528) (24,192) (6,632)
Purchase of investment property (64,546) (7,049) (20,862) (5,719)
Purchase of intangible assets (43,392) (16,506) (5,334) (1,462)
Proceeds from collection of (investment in) 5,166 4,981 (7,341) (2,012)
short-term bank deposits, net
Proceeds from sale of property and equipment 20,139 438 1,814 497
Proceeds from sale of investment property 3,610 - 45,090 12,360
Proceeds from sale of marketable securities 150,945 65,246 34,080 9,342
Investment in marketable securities (178,149) (95,191) (67,669) (18,550)
Grant of loans to associates (124,488) (6,230) (1,075) (295)
Investment in associates (391) (7,715) (1,157) (317)
Grant of long term loans (37,585) (23,583) (26,835) (7,356)
Collection of long-term loans 13,524 3,174 17,513 4,801
Interest received 24,349 4,615 8,734 2,394
------ ----- ----- -----
Net cash used in investing (395,276) (151,348) (47,234) (12,949)
activities
ALON BLUE SQUARE ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)
Convenience
translation
Year ended Three months ended for the three
months ended
December 31, March 31, March 31,
2012* 2012* 2013 2013
---- ---- ---- ----
NIS in thousands U.S. dollars
in thousands
------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of
debentures 504,136 264,242 152,263 41,739
Repayment of
debentures (209,321) (3,795) (2,377) (652)
Transactions
with non-
controlling
interests (467) (682) - -
in subsidiary without loss of
control
Receipt of long-
term loans 226,478 - 40,653 11,144
Repayment of
long-term
loans (342,314) (119,013) (53,807) (14,750)
Short-term
credit from
banks and
others, net 177,795 (71,301) (172,156) (47,192)
Settlement of
forward
contracts (2,808) - - -
Interest paid (252,955) (56,308) (62,495) (17,131)
-------- ------- ------- -------
Net cash
provided by
(used in)
financing 100,544 13,143 (97,919) (26,842)
activities
207,441 21,405 164,422 45,072
INCREASE IN CASH AND CASH
EQUIVALENTS AND BANK
OVERDRAFTS
Translation
differences on
cash and cash
equivalents (1) (4) (2) (1)
--- --- --- ---
BALANCE OF CASH
AND CASH 51,605 51,605 259,045 71,010
EQUIVALENTS AND BANK
OVERDRAFTS AT BEGINNING OF
PERIOD
BALANCE OF CASH
AND CASH 259,045 73,006 423,465 116,081
EQUIVALENTS AND BANK
OVERDRAFTS AT END OF PERIOD
(Continued - 2)
ALON BLUE SQUARE ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)
Convenience
translation
for the three
Year ended Three months months ended
December 31, ended March 31, March 31,
------------
2012* 2012* 2013 2013
---- ---- ---- ----
NIS U.S. dollars
--- ------------
In thousands
------------
(a) Net cash provided by operating activities:
Adjustments for:
Depreciation and amortization 278,514 67,402 67,282 18,444
Increase in fair value of investment property, net (16,874) (2,685) (5,559) (1,524)
Share in losses (profit) of associates, net (87,060) (3,380) 389 107
Dividend received 41,544 - 4,119 1,129
Share based payment (493) 463 (151) (41)
Loss (gain) from sale and disposal of property (14,684) 32 153 43
and equipment, net
Provision for impairment of property and - 189 - -
equipment, net
Gain from changes in fair value of derivative (1,437) (2,357) (3,570) (979)
financial instruments
Linkage differences on monetary assets, 29,208 2,005 1,863 511
debentures, loans and other long term liabilities
Employee benefit liability, net 2,246 (2,082) 199 55
Decrease (increase) in value of investment in 1,622 8,973 (87) (24)
securities, deposits and long-term receivables,
net
Interest paid, net 227,186 49,700 56,026 15,358
Changes in operating assets and liabilities:
Investment in real estate inventories ( 380) (823) (555) (152)
Decrease (increase) in trade receivables and 67,550 (386,412) (333,901) (91,530)
other accounts
Increase (decrease) in trade payables and other (56,025) 547,489 482,721 132,626
accounts payable
Decrease (increase) in inventories (11,960) (106,669) 34,422 9,435
-------- ------- ------ -----
458,957 171,845 303,351 83,158
======= ======= ======= ======
(Concluded - 3)
ALON BLUE SQUARE ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)
Convenience
translation
for the three
Year ended Three months months ended
December 31, ended March 31, March 31,
------------
2012 2012 2013 2013
---- ---- ---- ----
NIS U.S. dollars
--- ------------
In thousands
------------
(b) Supplementary information on investing and
financing activities not involving cash flows:
Purchase of property and equipment on credit 27,866 4,930 13,182 3,613
====== ===== ====== =====
Dividends declared to non-controlling interests - - 15,215 4,171
=== === ====== =====
Realization of property and equipment 11,000 - - -
====== === === ===
ALON BLUE SQUARE ISRAEL LTD.
NET LIABILITIES
(UNAUDITED)
Convenience
translation
December 31, March 31, March 31,
2012* 2012* 2013 2013
---- ---- ---- ----
NIS U.S. dollars
--- ------------
In thousands
------------
Alon Blue Square**
-----------------
Cash
and
cash
equivalence 2,039 1,942 4,428 1,214
Investment
in
securities 68,429 66,345 69,172 18,962
------ ------ ------ ------
Total
assets 70,468 68,287 73,600 20,176
====== ====== ====== ======
Short
term
and
Long-
term
debt:
Short
term
loans
from
banks 347,572 167,533 347,289 95,200
Long
term
loans
from
banks 156,639 171,569 156,663 42,945
Debentures 171,002 233,286 172,414 47,263
------- ------- ------- ------
Total
long-
term
debt 675,213 572,388 676,366 185,408
======= ======= ======= =======
Equity:
Equity
attributable
to
equity
holders
of
the
company: 1,178,739 1,176,038 1,138,304 312,034
--------- --------- --------- -------
Total
debt,
net (604,745) (504,101) (602,766) (165,232)
======== ======== ======== ========
* Net of grant of loans or loans received from subsidiaries
ALON BLUE SQUARE ISRAEL LTD.
RECONCILIATION BETWEEN NET INCOME FOR THE PERIOD AND ADJUSTED EBITDA
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)
Convenience
translation
Year ended Three months for the three
months ended
December 31, ended March
31, March 31,
------------
2012* 2012* 2013 2013
---- ---- ---- ----
NIS in thousands U.S. dollars in
thousands
--------- ---------
Net income (loss) from continuing operations 44,833 5,567 (31,498) ( 8,759)
Tax benefits (2,863) (4,381) (2,638) ( 723)
Share in losses (gains) of associates (87,060) (3,380) 389 107
Share in adjusted EBITDA of 39,250 12,095 11,100 3,043
equity accounted investees
Finance expenses, net 238,928 39,583 53,850 14,762
Other losses (gains), net (4,278) 72 6,274 1,720
Changes in fair value of investment (16,874) (2,685) (5,559) ( 1,524)
property
Depreciation and amortization 278,514 67,402 67,282 18,444
Share based payment (493) 463 (151) ( 41)
---- --- ---- ----
Adjusted EBITDA 489,957 114,736 98,599 27,029
======= ======= ====== ======
ALON BLUE SQUARE ISRAEL LTD.
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)
Note 1 - Segment reporting
The Company includes segment information according to IFRS 8. The reporting is based on the Company's organizational structure, the internal reporting, the allocation of resources and the decision-making process. The Company presents four reporting segments: Supermarkets, Fueling and Commercial sites, Non-Food Retail and Wholesale and Real Estate in addition to other segment which includes mainly Cellular activity and the Company's share in the issuance and clearance activity of credit cards. The segments' results include the operating profit before financial expenses from continuing operations including the Company's share in gains (losses) of associates. The segments' results for prior periods were adjusted[4] in order to reflect the segment's results and the adjustment to the results in the consolidated report for those periods from continuing operations.
The Company's operating segments consist of the following:
1. Fueling and commercial sites - Through its subsidiary Dor-Alon the
Company is engaged in the development, construction and operation of
vehicle fueling stations, adjacent commercial centers and independent
convenience stores, marketing of fuel products and other products through
the fueling stations and convenience stores and direct marketing of
distillates to customers. The fueling and commercial sites segment is
presented according to the published financial statements of Dor-Alon,
with reclassification of credit card fees and with the amortization of
the excess of cost arising at the time of acquisition allocated to the
reconciliation between the operating profit of the segment and the total
operating profit.
2. Supermarkets - The Company operates the second largest food retail chain
in Israel. Through its subsidiary, Mega Retail Ltd. ("Mega Retail"),
which operates Supermarket branches, the Company offers a wide range of
food and beverage products and "Non-food" items, such as houseware, toys,
small electrical appliances, computers and computer accessories,
entertainment and leisure products and textile products and "Near-Food"
products, such as health and beauty aids, products for infants, cosmetics
and hygiene products. As of March 31, 2013, Mega Retail operated 211
supermarkets. This segment also includes properties owned through Blue
Square Real Estate ("BSRE"), in connection with the supermarket operation
of Mega Retail's stores (including warehouses and offices).
3. Non-Food (Retail and Wholesale) - Mostly through its subsidiary, BEE
Group Retail Ltd. ("BEE Group"), the Company is engaged in non-food
retail and wholesale activities. As of March 31, 2013, the Company
operated 138 non-food retail outlets, some through franchisees, with
specialties in houseware and home textile, toys, leisure, and infant.
This segment also includes properties owned through Blue Square Real
Estate ("BSRE") which are used by the segment.
4. Real Estate - Through its subsidiary BSRE the Company is engaged in
generating yield from commercial centers, logistics centers and offices,
land for the purpose of capital appreciation and deriving long-term yield
as well as in the development of the "Wholesale Market" residency
project.
5. Others - Alon Blue Square through its 100% subsidiary, Alon Cellular Ltd,
operates an MVNO network in Israel and through Diners Club Israel Ltd.,
an associate held at 49%, which operates in the sector of issuance and
clearance of YOU credit cards to the customer club members of the group.
ALON BLUE SQUARE ISRAEL LTD.
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)
Note 1 - Segment reporting (continued)
Three months ended March 31, 2013
---------------------------------
Fueling and Supermarkets Non-Food Real Estate Others Adjustments Total
consolidated
Commercial sites
----------------
NIS in thousands
----------------
Net segment revenues 1,337,450 1,627,625* 106,947 9,447 7,799 - 3,089,268
Inter segment revenues 7,011 - 6,864 - - (13,875) -
Gross profit (loss) 190,036 406,856 53,031 9,447 (3,081) 303 656,592
Depreciation and amortization 21,479 39,940 2,940 - 1,163 1,760 67,282
Operating profit (loss) before 36,563 (3,050) 7,445 4,730 (12,331) (8,372) 24,985
other gains and losses net,
share in gains (losses) of
associates and changes in fair
value of investment property
Segment profit 37,112 (8,135) 6,339 6,974 (6,821) (11,588) 23,881
Unallocated corporate expenses (4,617)
Financial expenses, net (53,850)
-------
Loss before taxes on income (34,586)
=======
* Nine branches less compared to 2012
Three months ended March 31, 2012
---------------------------------
Fueling and Supermarkets Non-Food Real Estate Others Adjustments Total
consolidated
Commercial sites
----------------
NIS in thousands
----------------
Net segment revenues 1,387,566 1,626,018 87,567 7,167 - - 3,108,318
Inter segment revenues 8,677 - 12,127 - - (20,804) -
Gross profit 184,165 436,576 46,253 7,167 - - 674,161
Depreciation and amortization 21,266 41,947 2,652 - - 1,537 67,402
Operating profit (loss) before 28,538 16,531 7,030 4,338 (3,681) (11,138) 41,618
other gains and losses net,
share in gains (losses) of
associates and changes in fair
value of investment property
Segment profit 29,562 16,259 7,004 6,002 2,689 (13,905) 47,611
Unallocated corporate expenses (6,842)
Financial expenses, net (39,583)
-------
Income before taxes on income 1,186
=====
ALON BLUE SQUARE ISRAEL LTD.
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013
(UNAUDITED)
Note 1 - Segment reporting (continued)
Year ended December 31, 2012
----------------------------
Fueling and Supermarkets Non-Food Real Estate Others Adjustments Total
consolidated
Commercial sites
----------------
NIS in thousands
----------------
Net segment revenues 5,773,398 6,552,909 321,116 30,569 7,185 - 12,685,177
Inter segment revenues 41,197 - 29,458 - - (70,655) -
Gross profit (loss) 796,994 1,788,614 148,348 30,569 (11,570) (499) 2,752,456
Depreciation and amortization 87,808 167,464 11,438 - 2,099 9,705 287,514
Operating profit (loss) before 145,527 126,231 (12,072) 17,197 (33,628) (46,301) 196,954
other gains and losses net,
share in gains (losses) of
associates and changes in fair
value of investment property
Segment profit 149,534 137,036 (
15,450) 99,302 (9,887) (55,369) 305,166
Unallocated corporate expenses (24,268)
Financial expenses, net (238,928)
--------
Income before taxes on income 41,970
======
Three months ended March 31, 2013
---------------------------------
Fueling and Supermarkets Non-Food Real Estate Others Adjustments Total
consolidated
Commercial sites
----------------
U.S. dollars in thousands
-------------------------
Net segment revenues 366,626 446,169 29,317 2,590 2,137 - 846,839
Inter segment revenues 1,922 - 1,882 - - (3,804) -
Gross profit (loss) 52,903 111,529 14,537 2,590 (845) 83 179,987
Depreciation and amortization 5,888 10,948 806 - 319 483 18,444
Operating profit (loss) before 10,023 (836) 2,041 1,297 (3,381) (2,295) 6,849
other gains and losses net,
share in gains (losses) of
associates and changes in fair
value of investment property
Segment profit 10,173 (2,230) 1,738 1,912 (1,870) (3,177) 6,546
Unallocated corporate expenses (1,266)
Financial expenses, net (14,762)
-------
Loss before taxes on income (9,482)
======
[1] Effective January 1, 2013, the Company applies IFRS 11 "Joint Arrangements" (IFRS 11 or the Standard). IFRS 11 is to be applied retrospectively in financial statements for annual periods such that comparative figures are restated. According to the Standard, investments in jointly controlled entities (Joint ventures) are no longer to be consolidated proportionally but rather the company's investments in these ventures should be presented according to the equity method of accounting. Investments in joint operations shall continue to be consolidated under the proportionate consolidation method in the Company's consolidated financial statements. The Company's share in gains (losses) of associates is presented under operating income since associates are integrated into the operations of the Company. For the effect of the adoption as of March 31, 2012 and December 31, 2012, and for the periods ending on those dates on the assets, liabilities, equity, results and cash flows of the Company, see further details in this report below.
[2] The Company operates in four reportable segments: Supermarkets, Fueling and Commercial sites, Non Food retail and wholesale and Real Estate. Segmental information is included in this report below.
[3] Use of financial measures that are not in accordance with Generally Accepted Accounting Principles
Adjusted EBITDA is a measure that is not in accordance with Generally Accepted Accounting Principles (Non-GAAP) and is defined as income before financial income (expenses) net, other gains (losses) net, changes in fair value of investment property, taxes, share in gains of associates, depreciation and amortization in addition to share in adjusted EBITDA of equity accounted investees. It is an accepted ratio in the retail industry. It is presented as an additional performance measure, since it enables comparisons of operating performances between periods and companies while neutralizing potential differences resulting from changes in capital structures, taxes, age of property and equipment and its related depreciation expenses. Adjusted EBITDA, however, should not be related to as a single measure or as an alternative to operating income, another performance indicator and to cash flow information, which are prepared using Generally Accepted Accounting Principles (GAAP) as indicators of profit or liquidity. Adjusted EBITDA does not take the costs of servicing debt and other liabilities into account, including capital expenditures and therefore it does not necessarily indicate the amounts that may be available to the use of the company and in addition Adjusted EBITDA should not be compared to other indicators with similar names reported by other companies because of differences in the calculation of these indicators. See the reconciliation between our net income and Adjusted EBITDA which is presented in this press release.
[4] The adjustments include retrospective applications of IFRS 11 "Joint Arrangements" (the Company's share in previously consolidated companies by the proportionate method in the Company's consolidated financial statements and their results are presented now under the Company's share in gains (losses) of associates and are included in this report in segment results)
Contact:
Alon Blue Square-Israel Ltd.
Dror Moran, CFO
Toll-free telephone from U.S. and Canada: 888-572-4698
Telephone from rest of world: 972-3-928-2220
Fax: 972-3-928-2611
Email: cfo@bsi.co.il
SOURCE Alon Holdings Blue Square - Israel Ltd.
