May 29, 2014 / 5:07 PM / in 4 years

Israel's Delek Group moves to Q1 loss on write-downs

JERUSALEM, May 29 (Reuters) - Israeli conglomerate Delek Group swung to a loss in the first quarter, due to write-downs to the value of various holdings the company intends to sell as it refocuses its business on gas exploration.

Delek, which currently encompasses energy, insurance and biochemicals, said on Thursday it lost 195 million shekels ($56.2 million) in the quarter, compared with net profit of 53 million shekels a year earlier. A loss at its European fuel operations also hurt its bottom line.

Excluding impairments, Delek posted net income in the first three months of 2014 of 111 million shekels. Revenue fell to 8.9 billion shekels from 9.1 billion.

Delek plans to reduce its stake in Delek US Holdings to 9.8 percent and sell its holdings in Republic Insurance and in Phoenix Holdings.

The company, through its subsidiaries, has major shares in a number of newly discovered gas fields off Israel’s coast.

The Tamar field, which Delek developed together with Texas-based Noble Energy, has estimated reserves of 10 trillion cubic feet (tcf) and began production last year. Net profit from gas production, which totalled 1.7 billion cubic meters, was 38 million shekels in the first three months of the year, compared with a 5 million shekel loss a year ago.

“Our strategic vision of ... of focusing our efforts on oil and gas exploration and production is clear and now has become even more substantially visible,” said Asaf Bartfeld, Delek’s chief executive.

Tamar has signed deals worth tens of billions of dollars to supply the local market with gas. It also inked deals with Jordan and the Palestinian Authority.

Nearby Tamar is Leviathan, with an estimated 19 tcf of reserves and set to come online in 2016 and 2017. Some 40 percent of offshore reserves are allocated for export.

$1 = 3.4724 Israeli Shekels Reporting by Steven Scheer

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