Delek Group’s first-quarter profit grows on higher natural-gas sales

Israeli energy conglomerate Delek Group on Monday reported sharply higher quarterly net profit, boosted by increased sales of natural gas from the Tamar reservoir and higher profit at its insurance subsidiary.

Delek said it earned NIS 220 million ($61.5m.) in the first quarter, up from NIS 85m. a year earlier. Revenue rose to NIS 1.5 billion from NIS 1.3b.

Delek also had a large profit from Phoenix, the insurance unit it is seeking to sell to China’s Yango Group, due to higher income and a rise in the share price.

Delek, through its subsidiaries, has major shares in the Tamar and Leviathan gas fields off Israel’s coast. Profit from exploration and production was NIS 127m. in the quarter, compared with NIS 110m. in the same period in 2016.

It said it produced 2.4 billion cubic meters of natural gas at Tamar in the quarter, up 9% from a year earlier.

It expects production at Leviathan to begin by the end of 2019. The project’s partners have budgeted $3.75b. for its development.

Delek expects to complete its purchase of the remaining shares in North Sea oil producer Ithaca Energy Inc. by the end of June, at which point the shares will be delisted from the Toronto Stock Exchange and London’s AIM.

“Having acquired control of Ithaca, we intend to continue to strengthen the group’s international presence as part of our strategy to focus on the energy sector and become a key player in global markets,” chief executive Asaf Bartfeld said.

Delek declared a dividend of NIS 200m. , or NIS 16.69 a share, unchanged from the fourth quarter.