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Introduction & Market Context
Delek Group (TASE:DLEKG) released its first quarter 2025 financial results on May 21, showcasing robust performance across its energy portfolio despite ongoing regional tensions in the Middle East. The company, a major player in Israel’s energy sector with significant international operations, continues to strengthen its financial position through strategic debt management while capitalizing on favorable energy market conditions.
The presentation comes as Delek’s stock has been trading near its 52-week high of 64,400 shekels, reflecting investor confidence in the company’s growth strategy and operational execution in both its Israeli natural gas assets and North Sea operations.
Quarterly Performance Highlights
Delek Group reported substantial year-over-year growth in key financial metrics for Q1 2025. Revenue increased by 30.3%, reaching 3.85 billion shekels compared to 2.96 billion shekels in Q1 2024. This growth was accompanied by an even more impressive 62.7% surge in EBITDAX (earnings before interest, taxes, depreciation, amortization, and exploration expenses), which climbed to 3.15 billion shekels from 1.94 billion shekels in the same period last year.
As shown in the following chart of quarterly financial performance:
Adjusted net profit also showed positive momentum, increasing to 315 million shekels in Q1 2025 from 269 million shekels in Q1 2024, representing a 17.1% improvement. This growth reflects the company’s operational efficiency and the strong performance of its key subsidiaries, Ithaca Energy (LON:ITH) and NewMed Energy.
The company’s key financial highlights as of March 31, 2025, include:
Detailed Financial Analysis
Delek Group has made significant progress in strengthening its balance sheet, with net financial debt decreasing to 2.43 billion shekels as of March 31, 2025, down from 3.08 billion shekels a year earlier. This represents a 21% reduction in debt over the 12-month period, demonstrating the company’s commitment to improving its financial position.
The following chart illustrates the company’s debt reduction progress:
While equity decreased from 9.68 billion shekels to 8.75 billion shekels year-over-year, the company maintains a strong financial position with a leverage ratio (LTV) of just 14.5% and a debt ratio of 0.17. Delek also reported 6 billion shekels in non-lien assets and 5 billion shekels in short-term investments, providing substantial financial flexibility.
Additional financial metrics that highlight the company’s solid position include:
Strategic Initiatives
Delek Group highlighted several strategic developments during Q1 2025 and subsequent events. The company secured an agreement with Israel Credit for 1.3 to 1.4 billion shekels and completed a bond issuance, further enhancing its financial structure. Additionally, Delek received approvals for various mergers and acquisitions, positioning it for continued growth.
The company’s subsidiaries also reported significant achievements. Ithaca Energy increased its 2P reserves in the North Sea by 30 million barrels and paid a substantial dividend of 200 million dollars. Meanwhile, NewMed Energy conducted drilling operations in Bulgaria through its Blican project and announced a 60 million dollar dividend distribution.
NewMed Energy, a key component of Delek’s portfolio, showed strong performance with revenue increasing from 840 million shekels in Q1 2024 to 901 million shekels in Q1 2025. The company’s gas volume increased from 2.6 to 2.95, while condensate volume surged from 52 to 237, demonstrating operational growth.
The following chart illustrates NewMed’s financial performance:
Forward-Looking Statements
Looking ahead, Delek Group appears well-positioned to continue its growth trajectory, supported by strong operational performance in its core energy assets and a progressively strengthening balance sheet. The company’s strategic focus on debt reduction while maintaining dividend distributions (with a 10.7% dividend yield on the TA-35 Index) suggests a balanced approach to shareholder returns and financial stability.
The ongoing development of natural gas assets in Israel and exploration activities in Bulgaria, combined with the enhanced reserves position in the North Sea, provide multiple avenues for future growth. However, as with all energy companies, Delek remains exposed to commodity price fluctuations and geopolitical risks in its operating regions.
Delek Group’s Q1 2025 results demonstrate that the company continues to execute effectively on its strategic priorities, delivering improved financial performance while strengthening its balance sheet and positioning itself for sustainable long-term growth in the global energy market.
Full presentation:
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