The cancellation of a highway project in Ethiopia and the devaluation of the Nigerian currency are weighing heavily on the Israeli construction company.
Bad news from Africa continues to plague Israeli construction and infrastructures company Shikun & Binui Holdings Ltd. (TASE: SKBN). The company, controlled by Naty Saidoff and managed by CEO Tamir Cohen, has announced the loss of about NIS 98 million after a halt in a highways project it is building in Ethiopia. This can be added to the NIS 135 million loss that it recorded in the third quarter, for a total loss of NIS 233 million. Shikun & Binui’s share price fell 5.61% today to a market cap of NIS 4.7 billion, 20% down from the end of November.
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In November, Shikun & Binui announced that due to the state of emergency in Ethiopia, and the rise in unrest and rioting, as well as the lack of cement in the country, the project to build a 57 kilometer highway was being discontinued due to force majeure.
To this development must be added Shikun & Binui’s announcement last week about negative effects of devaluation of the Nigerian naira currency, which is expected to cause losses of over NIS 250 million shekels. Nigeria is one the main countries in which Shikun & Binui is active in infrastructure and construction contracting for government ministries and local authorities.
Shikhun & Binui reported at the end of January there has been a sharp 55% devaluation in the Nigerian currency against the US dollar since the end of 2023. The effect of that devaluation for the first quarter of 2024 will be a loss of NIS 107 million ($29 million), in addition to a loss of NIS 49 million that will appear in the fourth quarter of 2023 results as a result of a 22% devaluation of the naira during that quarter. This is in addition to a sharp devaluation of the naira in the first half of 2023 that led to a loss of over NIS 100 million.
Published by Globes, Israel business news – en.globes.co.il – on February 11, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.
Shikun & Binui CEO Tamir Cohen credit: Sivan Faraj
