Following the win of a company
Dor Alon
+ 0.77%
Base:8,133
opening:8,265
Tall:8,265
low:8,060
change:557,753
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In a tender for the supply of up to 50% of the Palestinian Authority’s fuel consumption, we spoke with the company’s CEO, Amit Zeev. Dor Alon has long been more than just an energy company. In addition to gas stations, it owns AM: PM branches, Alonit convenience stores and even A private power plant. Perhaps this is the explanation for the fact that unlike companies such as Zen and Paz Neft, whose shares lost about 60% and 30% this year (respectively), Dor Alon’s share managed to reverse most declines and even shows a 2% increase since the beginning of the year. Zeev “Despite the drop in revenue sources, the company is also profitable in Corona, although this year has been the toughest of applications in the field worldwide.”
Doing business with the Palestinian Authority – despite the dubious morality of payments
“Dor Alon supplied fuels to the Palestinian Authority until 2012, so we know them well,” says Zeev about the choice to approach the tender. “We know the history of the Palestinian Authority as one that pays debts to its suppliers and in the last 20 years it has not happened that the PA has not paid.” According to Zeev: “We also have a check for the right of the Israeli government to collect the debts if the authority does not pay and there are always huge collection surpluses in this fund, but we do not believe we will get there because the authority has a long history of payments. It has no lost debts.”
Zeev’s words are surprising because as of the beginning of the year and after paying about NIS 900 million, the Palestinian Authority’s debts to the IEC amounted to about NIS 1 billion, and in 2014, IEC chairman Yiftach Ron Tal told the Knesset Finance Committee that “Palestinians Accumulated debt of close to NIS 1.4 billion despite our warnings to them for years. “If an ordinary citizen did not pay the electricity bill, we would cut it off within a week and here, despite the company’s huge financial debt, we are forced to continue to supply electricity to the authority.”
PA also had a debt of NIS 340 million to Bazan, which since 2012 has been one of the two only suppliers of petroleum distillates to the Authority. Bezen wrote regarding the debt that “there is no certainty as to the company’s ability to collect the balance of credit and as to the extent of the loss of profit.” However, Zeev is confident about the ability to collect the debt.
Fuel prices are high because the state is addicted to taxes
Zeev has a lot of criticism of the state’s conduct regarding the fuel companies: “The reason fuel prices are high is because the state can. The state has become addicted to tax money on a large scale and we all pay the price on every trip. Unfortunately, this is Israel’s tax structure. The country takes a lot. More than 3 shekels per liter go to the country. If you want to reduce the cost of living you can simply lower taxes on fuel. This is also true for cars, there is 100% tax on vehicles in Israel, and that is something that has no equal in the world. ”
Zeev rejects the position that the purpose of the high taxation on fuel and vehicles is to reduce traffic congestion on the roads: “I do not think this is the goal of the state and this is not the motivation of the government. It exists many years ago, even before there was developed public transportation in Israel. ”
Fuel consumption will continue to rise – no matter what world leaders do
Dor Alon is not impressed by the statements of world leaders about the desire to reduce the use of oil in the world and switch to renewable energies. Zeev states that even if the leaders work to reduce the use of oil, “the fuel sector is not going anywhere. In practice, there is no real decrease in fuel consumption, on the contrary: there is a real increase that is expected to continue and grow. “The apocalyptic case will materialize until there are no fossil fuels by 2050 – we are prepared for that. We will provide energy whether electricity, gas, hydrogen or any other energy that vehicles will need.”
The Corona has hurt business, but according to Zeev: “Global fuel consumption continues to grow every year at a rate of 2% -3%. The economy is developing and the world population is growing. There are more vehicles on the road, more driving and air transport and that is where we are. To stop but to grow. ”
“Right now by 2030 fuel consumption is expected to go up and up, and electric vehicles will come in slowly. Currently electric vehicle volumes are promille, but even if their sales volume doubles, even if it reaches 4% or even 10% or 30% of new vehicles on the road “There is a fleet of about 3 million vehicles in Israel. Every year 200-300 thousand new vehicles enter. So even if 100,000 electric vehicles enter, we will still reach a situation where the absolute fuel consumption is on the rise.”
Still, more than 50% of EBITDA is not fueled
Although on the one hand the company is not afraid, in practice it is preparing for the changes that are expected to come in the field. It has set up a power plant, set up a chain of mini supermarkets, has Dor Gas, which is the fourth largest player in the country, and also its subsidiary Amgazit, an oil plant that supplies oils to all car importers and more. “Today, more than 50% of our EBITDA does not come from fuels. In the last two years, our retail sales have amounted to NIS 1.3 billion.
“We are also not afraid of the entry of electric vehicles,” says the CEO, who notes that he himself travels in a hybrid vehicle and says “We see this as an opportunity. We are the first to set up ultra-fast charging stations. There are currently only 4 ultra-fast charging stations in the whole country where it is possible to charge a vehicle within 6 minutes, and they are all in Dor Alon. The rest of the 10-hour slow charging options are irrelevant to the public, and in the coming months we will complete a deployment of 20 such fast charging stations. We will be happy to offer fast charging stations to Tesla customers. ”
And what will happen to Israir?
As mentioned, the company diversifies its sources of income and according to Zeev, “We are exploring many directions in all our areas of business – development, retail and real estate. The example of our bid to acquire Israir is an example of the directions in which it is right for us to develop. “Dor Alon has not yet given up on the acquisition and a court hearing will be held tomorrow. The company submitted a bid and theoretically was not far from winning the tender. On the offer, for now. “Everything is still open with Israir, Dor Alon’s offer from a purely economic point of view is a much better offer than all the others and I believe the court will make the right financial decision and will accept Dor Alon’s offer,” Zeev concludes optimistically.