Bazan Group, Israel’s largest refining and petrochemical conglomerate, announced the release of financial results for the third quarter of 2023 on Monday. The group concluded the third quarter with continued momentum and strong results in the refining segment, with a net income of $115 million and consolidated adjusted EBITDA of $233 million. Cumulative adjusted consolidated EBITDA since the beginning of the year totaled approximately $630 million.
Moshe Kaplinsky, Chairman of Bazan Group: “October 7 is a new watershed for all of us on a personal, community, and state level. Our hearts are with the bereaved families, and we embrace the security forces and their families. We strengthen the families of the captives and pray for their speedy return.
“Since the outbreak of the war, Bazan has mobilized on three main fronts: maintaining energy continuity in the economy, supplying products to petrochemical customers, and providing significant support for the Israeli home front. I am proud of the team’s achievements in all three of these areas. On the subject of energy continuity, we have acted and continue to work professionally and creatively in order to prevent shortages. I think Bazan has proven once again that it is the cornerstone of the country’s fuel supply.
“On the subject of community support, I am proud to be part of Bazan during this period. We have increased our annual donation budget to NIS 30 million, and we have been working since the first day of the war to assist the community in a number of areas. In parallel with the immediate activity, we decided on the long-term strategic adoption of the community of Kibbutz Nahal Oz.”
Assaf Almagor, CEO of Bazan Group: “The recent period has proven beyond doubt our vitality to the Israeli economy. Since October 7, Bazan has proven itself to be a critical factor in maintaining a continuous supply to the energy sector, starting with the use of our shipping fleet, which operated almost alone, the supply of diesel fuel to the Israel Electric Corporation as an alternative to natural gas, fuel for the Ministry of Defense and regular fuel supply to every region and need in the country. We can already draw preliminary lessons regarding long-term planning for Israel’s energy sector.”
Bazan is off to a good start financially for the challenging period, with a net financial debt of $560 million and showing financial leverage of 0.7, alongside a reduction in working capital financing channels and renewal of short-term binding credit facilities.
Against the background of the war, on October 12, the Minister of Energy and Infrastructure issued an order to the company regarding the operation of the refinery. In accordance with the directive, the company was forced, among other things, to postpone the periodic treatment scheduled to begin in October 2023 at its main refining facility. Bazan is currently preparing to carry out the treatment during the second quarter of 2024.
Bazan continues its activities to maintain the energy continuity of the energy sector and supply products to petrochemical customers. However, this wartime activity involves excess costs and additional effects, which the company estimates may adversely affect after-tax profit for the fourth quarter of 2023 by an estimated $20 million to $35 million. It should be noted that the effects of the war on the Group’s activity are declining in view of positive developments regarding the manner and ability to use the relevant infrastructures in conjunction with the Company’s activities in order to reduce incremental costs.