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Report Date : |
25.09.2013 |
IDENTIFICATION DETAILS
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Name : |
SCOPE METALS GROUP LTD. |
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Formerly Known As : |
SCOPE METALS TRADING AND TECHNICAL SERVICES LTD |
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Registered Office : |
P.O. Box 3 3 Hamerkava Street Re'em Industrial Zone Bnei Ayish 6086000 |
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Country : |
Israel |
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Financials (as on) : |
30.06.2013 |
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Date of Incorporation : |
27.04.1980 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Subject is engaged in distribution and industrial metal supply center, handling a wide range of metals & engineering plastic products. |
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No. of Employees : |
314 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
No complaints |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31st, 2013
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Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
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Israel |
A2 |
A2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
ISRAEL - ECONOMIC OVERVIEW
Israel has a technologically advanced market economy. Its
major imports include crude oil, grains, raw materials, and military equipment.
Cut diamonds, high-technology equipment, and pharmaceuticals are among the
leading exports. Israel usually posts sizable trade deficits, which are covered
by tourism and other service exports, as well as significant foreign investment
inflows. The global financial crisis of 2008-09 spurred a brief recession in
Israel, but the country entered the crisis with solid fundamentals - following
years of prudent fiscal policy and a resilient banking sector. The economy has
recovered better than most advanced, comparably sized economies. In 2010,
Israel formally acceded to the OECD. Israel's economy also has weathered the
Arab Spring because strong trade ties outside the Middle East have insulated
the economy from spillover effects. Natural gasfields discovered off Israel's
coast during the past two years have brightened Israel''s energy security
outlook. The Leviathan field was one of the world''s largest offshore natural
gas finds this past decade, and production from the Tama field is expected to
meet all of Israel''s natural gas demand beginning mid-2013. In mid-2011,
public protests arose around income inequality and rising housing and commodity
prices. The government formed committees to address some of the grievances but
has maintained that it will not engage in deficit spending to satisfy populist
demands
Source
: CIA
SCOPE METALS GROUP LTD.
TELEPHONE 972 8 863 10 00
FAX 972 8 863 10 20
P.O. Box 3
3 Hamerkava Street
Re'em Industrial Zone
BNEI AYISH 6086000 ISRAEL
Originally incorporated as
a private limited company, registered as per file
No. 51-084980-5 on the 27.04.1980.
Converted into a public
limited liability company, registered as per file
No. 52-003742-5 on the 30.04.1992 and in parallel published a prospectus,
offering shares to the public, raising a sum of US$ 2.5 million.
Originally registered under the name SCOPE TRADING & FOOD MARKETING LTD., which changed to SCOPE METALS TRADING AND TECHNICAL SERVICES LTD. on the 05.04.1981, which changed to the present name on the 19.08.2007.
Authorized share capital NIS 30,000,000.00, divided into: -
30,000,000 ordinary shares of NIS 1.00 each,
of which 10,893,871 shares amounting to NIS 10,893,871.00 were issued.
1. Shmuel Shiloh (via fully owned company), 45%,
2. FIMSCO HOLDINGS LTD., 21.2%, of FIMI Fund, controlled by Ishay Davidi,
3. MIGDAL INSURANCE, 10%, an institutional investor,
4. CLAL INSURANCE ENTERPRISES HOLDINGS LTD., 4.7%,
5. DS APEX, 5.3%,
6. YALIN LAPIDOT, 5.3%, (latter 4 shareholders are an institutional investors),
7. Shares are also traded on the Tel Aviv Stock Exchange.
In April 2006, FIMI Investment Fund (via FIMSCO) acquired 2,935,000 shares in subject, for a sum of NIS 157 million.
In May 2013 Shmuel Shiloh acquired 9% of subject's shares from FIMSCO for NIS 45.1 million (paying a premium of some 19% over market price), reaching current holding.
Shmuel Shiloh, Chairman,
Ishay Davidi, CEO of FIMI,
Matityahu (Mati) Dov,
Amiram Boehm,
Shalom Singer,
Ms. Orna Lichtenstein,
Uzi Nethanel,
Dan Sion.
Gil Haver.
A global distribution and industrial metal supply center, handling a wide range of metals & engineering plastic products under one roof. Subject & Group operate as trades, importers, exporters and marketers in the alloys “white metal” area, including Steel & Stainless Steel, Aluminum, Copper, Bronze, Brass, Titanium, Lead and Zinc.
Products include pipes, bolts & nuts, fittings, welding equipment, nets and cables, fasteners, plates, etc., for the various industries and construction. Having an inventory of over 80,000 different items.
Subject provides also stock storage facilities, cutting and sawing services ("one-stop-shop" model).
Also operate in the real estate field (very low volume).
Group operates via subsidiaries abroad (USA, Czech Republic, Poland, Romania and China). 45% of Groups sales are export. Exports are to Romania, Bulgaria, Moldova, Russia, Greece, India, Cyprus, Kenya, Egypt, Turkey and Ukraine.
95% of purchase is import.
Among local suppliers:
BETH EL ZIKHRON YAAQOV INDUSTRIES, KIDRON TRADING & AGENCIES, etc.
Sole local agents of:
COLOMBUS STAINLESS (PTY) LTD., ALMAC STAINLESS TUBE (PTY) LTD.,
ANDREW MENTIS (PTY) LTD., all of South Africa,
ROLDAN S.A., of Spain,
STAR STAINLESS SCREW CO., of the U.S.A.,
REDAELLI TECNA SPA, of Italy.
Subject has over 4,500 clients in Israel and some 40 customers abroad (of subject),. The Group as a whole has over 8,000 active clients abroad.
Among clientele are: ISRAEL AEROSPACE INDUSTRIES, SIEMENS CONCENTRATED SOLAR POWER, RAFAEL ADVANCED DEFENSE SYSTEMS, INCOMAC, GOLD BAR, M.G.T. ISRAEL TASIYOT- MIFALEI TRIFMAN, ENERGETICA GENERAL ENGINEERING & HEAT SYSTEMS, BERMAD, A.Z. INDUSTRIES, SHATAL ENGINEERING, SELA ELECTRONICS SYSTEMS, ALUM ESHET (OMAN), VERED EROSIA, HATECHOF ISI YOGEV, A.B.M PLASTIC INDUSTRIES, ELCON MAMAB CONTROL INSTRUMENTS, INCO ENGIENERING SERVICES, AHARON YOSEF & SONS PACKAGING INDUSTRIES, K & K PLASTIC ENGINEERING, MODOTEC, etc.
Operating from premises, a site which includes owned area of 50,366 sq. meters and leased area of 27,500 sq. meters (of which 43,000 sq. meters are built), in 3 Hamerkava Street, Re'em Industrial Zone, Bnei Ayish, and from branches in the USA, China, Romania, Poland and the Czech Republic.
Having 598 employees serving whole SCOPE Group as of end of March 2013, of which 314 employees in subject itself (in Israel).
In April 2005, subject raised NIS 40 million by issuing shares to institutional investors.
In March 2007, subject completed a raise of NIS 150 million by issuing bonds to institutional investors.
Subject intended to offer some 26% of its shares and raise US $100 million through the New York Stock Exchange, and already submitted draft prospectus to the American SEC, however it decided to back-off the issuance the public offering due to unfavorable market condition.
There are no charges registered on the company's assets.
NIS (thousands)
31.12.2012 30.06.2013
ASSETS
Current assets
Cash & cash equivalents 167,005 203,453
Negotiable securities 7,455 9,095
Customers 319,281 375,315
Other debtors 14,195 17,243
Stock 526,141
525,592
1,034,077 1,130,698
Non-current assets
Fixed assets (net) 283,111 275,831
Goodwill & intangible assets 17,276 16,993
Other non-current assets 10,769 5,720
311,156 298,544
1,345,233 1,429,242
======== ========
LIABILITIES
Current liabilities
Short-term credit from banks & others 224,980 238,678
Other current liabilities 124,339 193,630
349,319 432,308
Non-current liabilities
Credit from banks & others 347,075 423,561
Debentures 67,351 33,879
Deferred taxes 37,110 32,880
478,536 490,320
Equity 517,378 506,614
1,345,233 1,429,242
======== ========
Consolidated Statements of Income
NIS (thousands)
Year ended December 31st
2010 2011 2012
Revenues 972,531 1,049,285 1,158,382
Gross profit 249,903 265,567 262,924
Operating income 61,036 63,473 60,199
Profits before taxes on income 28,325 24,146 31,063
Net income 17,206 1,121 20,724
======== ======== ========
Consolidated sales for the first 6 months of 2013 were NIS 652,859,000 (13% increase compared to parallel period of 2012), making a gross profit of
NIS 148,982,000, an operating profit of NIS 49,225,000 and a net profit of
NIS 28,547,000.
ADIT INDUSTRY BUILDINGS LTD., 100%, real estate holdings,
ILERLI TIN PROCESSING LTD., 100%,
EL-ZON HOLDINGS LTD., 100%, non-active,
GILINOX S.R.L., 100%, Romania,
PRIMAPOL METAL SPOT S.R.O., 100%, Czech Republic, owns ALINOX POLSKA Sp.z.o.o., of Poland and ALINOX UKRAINE of Ukraine.
DALIAN BEST METALS CO. LTD. (D.B.M.), 100%, China,
SCOPE METALS USA INC. (formerly SHINTU), 100%, USA, fully owns 2 U.S. subsidiaries: MATERIALS TECHNOLOGY SOLUTIONS LLC. (M.T.S.) and HADCO METAL TRADING LLC., which owns HADCO METAL KOREA LLC.
Bank Leumi Le’Israel Ltd., Tel Aviv Central Branch (No. 800), Tel Aviv.
Bank Hapoalim Ltd., Business Central Branch (No. 600), Tel Aviv.
Israel Discount Bank Ltd., Main Branch (No. 010), Tel Aviv.
Mizrahi Tefahot Bank Ltd., Main Business Center Branch (No. 461), Tel Aviv.
The First International Bank of Israel Ltd., Tel Aviv Main Branch (No. 046), Tel Aviv.
Also working with: Mercantile Discount Bank Ltd., Beit Maiya Branch (No. 656), Tel Aviv, account No. 56782 (a check with the Central Banks' data base did not reveal negative information regarding subject’s a/m account).
Nothing unfavorable learned.
Despite our efforts, we were unable to speak with subject's officials, as they were always unavailable. We left messages which so far remain unanswered.
Subject is considered a local leading company in the "white metals" sector.
Subject is ISO 9002 certified.
Founded in 1997, FIMI Fund (mainly via 5 funds) is a leading local private equity investment fund (mezzanine and buy-out fund), headed by its founder Ishay Davidi. Having a successful track record of 67 major transactions (37 cash exits) in total value of over US$ 1.7 billion. Presently, the Fund has more than US$900 million equity available for new investments. FIMI investors list includes leading US and Israeli institutional investors (mainly ISRAEL DISCOUNT BANK). According to American research firm PREQIN, based on the average annual yield to its investors, FIMI Fund was ranked the 4th best private equity fund in the world.
In 2002, subject acquired all the activities (including goodwill, stock, machinery and equipment) of 2 sister companies FEINGOLD STEEL INDUSTRIES LTD. and FEINGOLD STEELS (1960) LTD., for a sum of US$ 3.6 million. FEINGOLD was a veteran and well-known Group in the steel field.
In 2004 subject acquired all stock of GLOBAL METALS, a local metal company which went into receivership, as well as acquiring 51% of an American metal trading company M.T.S., for a sum of US$ 500,000.
In 2004 subject established a new subsidiary in the Czech Republic, which in 2005 acquired the activities of a metal trading Czech company, for € 895,000.
In 2006 subject acquired American metal trading firm through HADCO, a subsidiary established for this purpose in the USA, for a sum of US$ 11 million.
In June 2006, subject acquired a 10,000 sq. meters plot in Romania, for a sum of € 1 million and invested in warehouses an additional € 1.7 million.
In December 2006 subject reported it signed an agreement to purchase aluminum products in volume of US$ 40-44 million from a European plant, in the framework of subject's international expansion plans.
In December 2009 it
was reported that subject will install a solar system by GINERGIA on the roofs
of its plant for NIS 1 million, and will further install a larger system for
some NIS 20 million.
The global economic crisis took its toll from subject during 2008/9: The decrease in the global activity caused a decrease in demands for metals and metal’s prices fell drastically. As a result, subject wrote-off total of NIS 42.6 million for inventory value in its financial statements in 2008. Subject took streamlining measures, which included a cut-back in its workforce in Israel and abroad, salary cuts and stock decreasing. The measures, coupled with the recovery in global and local markets lead to an improvement in subject’s performance – as may be seen in the 2010, 2011 and 2012 results.
According to data by of the Metal, Electrical and Infrastructure Industries Association, representing the local Metal and Electricity Industries, which includes large scale export-oriented industries on one hand and family-owned plants which sell to the local market: 2010 sales (local and export) by the said industries amounted to NIS 70 billion, comprising 25% of Israel's industrial output. Results are similar to 2008 scales, after some 20% drop in 2009 due to the significant slow-down in the local economy, affected by the global financial and economic crisis. Sales for export reached US$ 10 billion in 2010.
Some 90,000 employees serve the said industries (26% of Israel's industrial workforce).
Export of products of Basic Metals by the local industry fell 11% in 2012 from 2011, reaching US$2,396 million, after rising by 12.6% in 2011 (continuing the growth trend from 2010 when it rose by 39% from 2009).
Export of Machinery &
Equipment also marked 10% increase in 2012 (in value of US$3,317 million),
after around 8% yearly rise in both 2011 and 2010.
According to the Central
Bureau of Statistics (CBS), import of metals raw materials to the local industries in 2012 marked a
decreasing trend, after a remarkable recovery in the years 2010 and 2011 from
2009 (a year where the local industry suffered from slow-down in economy).
Import of raw materials divided in 2012 as follows: Iron and Steel – fell by
11.5%, reaching US$ 2,177 million (after rising by over 30% per year in 2010
and in 2011); Precious Metals – down 13% (after rising by 2% in 2011 and 22.5%
in 2010) and reaching US$ 146 million; Non-ferrous Metals – fell by 13% (after
increase by 20% in 2011 and by 41% in 2010), reaching US$ 803 million.
CBS data reveals that investments by the local manufacturing
industries -both from import and domestic production- in machinery &
equipment (M&E) in 2012 fell by 1%, which comes after 41% rise in 2011. The
investments originating from import, which comprised 70% of overall investment
in M&E, fell 3.8% (after 69% rise in 2011), while investment originating
from local production rose by 6.2% in 2012 (fell 5.3% in 2011).
Gross Domestic Capital
Formation (investment) in machinery & other equipment in 2012 reached (in current prices) NIS 47,540 million, of
which NIS 33,336 million was from imports and NIS 14,204 miilion from domestic
production.
According to the CBS, investments by the local industrial branch in
imported machinery and other equipment in 2012 witnessed almost 20% (in current
prices) decrease from 2011, after climbing by 108% in 2011 from 2010. The fall
in 2012 in investment could be explained by the continuing unfavorable business
environment, which is also negatively affected by the slow-down in overseas
markets.
Good for trade engagements.
Note:
Since February 2013 Israel Post has started using a new area code method of 7 digits (the old method of 5 digits is no longer valid).
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.62.66 |
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1 |
Rs.100.46 |
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Euro |
1 |
Rs.84.60 |
INFORMATION DETAILS
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Report
Prepared by : |
NIS |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NB |
New Business |
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This score serves as a reference to assess
SC’s credit risk and to set the amount of credit to be extended. It is
calculated from a composite of weighted scores obtained from each of the major
sections of this report. The assessed factors and their relative weights (as
indicated through %) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend (10%) Operational size
(10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.