Increased Natural Gas Production Fails to Boost Delek Group's Profit

JERUSALEM--Increased natural gas production was not enough to increase profits for Israeli holding company Delek Group Ltd. (DLEKG.TV), which said Thursday that its third quarter net profit fell on lower revenue and higher tax and financing costs.

Delek, which owns part of the large offshore-Israel Tamar natural gas field that began production in March, said its net profit fell to 84 million shekels ($23.8 million) for the three months from July to September from ILS237 million in the same period a year earlier. Revenue fell to ILS9.64 billion from ILS9.94 billion.

Revenue from natural gas exploration and production in Israel increased to ILS177 million from ILS93 million. But higher financing expenses, which climbed to ILS563 million from ILS478, and a one-time tax expense canceled the effects of the increased revenue from the Israeli energy sector.

The Tamar gas field, which Delek owns the rights to along with Texas-based Noble Energy Inc. (NBL) and some smaller Israeli companies, contains up to 10 billion cubic feet of natural gas. Production at the field began in March and according to government officials, the field contains enough gas to meet Israel's needs for three decades.

Delek also has interests in the retail, auto and real-estate sectors.

At 1150GMT, shares of Delek were down ILS14.00, or 1.04%, at ILS1,330.00, in a higher Tel Aviv market.

Write to Sara Toth Stub at [e-mail]

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