Delek Group Q2 2025 slides: Revenue surges 39% amid strategic acquisitions

Introduction & Market Context

Delek Group (TASE:DLEKG) released its second quarter 2025 financial results on August 20, showing significant revenue growth despite mixed performance across its business segments. The energy conglomerate continues its strategic expansion through acquisitions while maintaining a strong dividend policy.

The company’s stock rose 3.79% to 72,650 shekels following the presentation, reflecting positive market reception to the quarterly results and strategic developments.

Quarterly Performance Highlights

Delek Group reported substantial revenue growth in Q2 2025, with total revenue reaching 3.5 billion shekels, a 39% increase from 2.52 billion shekels in the same period last year. EBITDAX (earnings before interest, taxes, depreciation, amortization, and exploration expenses) showed even stronger growth, rising 45% year-over-year to 2.13 billion shekels.

As shown in the following chart highlighting the company’s key financial metrics:

Despite the impressive top-line growth, net profit attributable to shareholders declined to 176 million shekels in Q2 2025, compared to 382 million shekels in Q2 2024. This 54% decrease in profitability presents a mixed picture for investors.

The quarterly financial comparison clearly illustrates this divergence between revenue growth and profit decline:

Strategic Initiatives and Acquisitions

Delek Group completed several strategic transactions during and after the second quarter, expanding its portfolio across multiple sectors. Most notably, the company finalized its acquisition of Isracard on July 23, 2025, after receiving regulatory approval. This transaction, valued at 1.36 billion shekels, gave Delek a 37.05% stake in Isracard, bringing its total ownership to 40.07% after the acquisition.

Other significant strategic moves included:

• Purchase of a 32.7% stake in InPlay Oil for $67 million
• Ithaca Energy (LON:ITH) increasing its holdings in Cygnus to 85%
• An update to the Leviathan export agreement to increase gas exports
• Credit rating improvement from Midroog for the company’s debt

The company also announced substantial dividends across its business units, with Ithaca Energy declaring a $167 million dividend, NewMed Energy announcing a $60 million dividend, and Delek Group itself declaring a 250 million shekel dividend, reflecting a 10% dividend yield.

Subsidiary Performance

Ithaca Energy emerged as the standout performer in Delek’s portfolio, with exceptional growth in Q2 2025. The North Sea oil and gas producer reported a 140% increase in EBITDAX to $464 million, while revenue more than doubled from $362 million to $746 million year-over-year.

The following chart illustrates Ithaca’s impressive performance metrics:

Ithaca’s production volumes showed remarkable growth, with average daily production increasing from 47,000 to 119,800 barrels of oil equivalent per day. Total (EPA:TTEF) production for the quarter reached 10.9 million barrels, up from 4.3 million in Q2 2024. The company maintained a healthy financial position with a debt-to-EBITDAX ratio of just 0.32.

In contrast, NewMed Energy faced challenges during the quarter. The company reported decreased production and financial results, with revenues falling from 962 million to 596 million shekels and net profit declining from 286 million to 157 million shekels. This performance decline was attributed to "Operation With Levias," which impacted gas production.

Despite these challenges, NewMed Energy committed to a significant export agreement of 130 BCM (billion cubic meters) and announced plans to distribute dividends totaling $180 million starting in 2025.

Financial Position and Outlook

Delek Group’s financial position shows some concerning trends alongside positive indicators. While the company has maintained relatively stable net financial debt of 2.53 billion shekels as of June 30, 2025 (down from 2.92 billion a year earlier), shareholders’ equity has declined significantly from 10 billion shekels in June 2024 to 7.79 billion shekels in June 2025.

The following chart shows the evolution of the company’s debt and equity over the past year:

On a more positive note, Delek Group reported 13.8 billion shekels in unencumbered assets and a conservative leverage ratio of 13%. The company also maintains substantial liquidity with 4.8 billion shekels in consolidated cash and short-term investments.

The additional financial metrics provide further context on the company’s position:

With its strategic acquisitions and strong dividend policy, Delek Group appears focused on diversifying its portfolio while maintaining shareholder returns, despite the mixed financial performance in the latest quarter.

Full presentation:

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