Shikun & Binui CEO Defends Energy Unit Sale Amid AI Boom
Amit Birman, CEO of Shikun & Binui, has defended the company's recent sale of its energy subsidiary, Shikun & Binui Energy, for NIS 4.45 billion to Generation Capital. Birman stated that selling the energy arm, even at the height of the AI revolution, was the most rational decision for the company's strategic direction. He explained that the energy sector requires massive capital investment, which the company lacks, whereas its core business as a contractor and service provider is less capital-intensive.
Birman, who took office in December 2024, has seen Shikun & Binui's market value increase by 35% to NIS 10 billion. His goal is to double this value by 2030. He emphasized that the sale does not prevent future investments in energy, as there is no non-compete clause. The company's strategy, he elaborated, is to be primarily a contractor, with services as an added arm, a model he likened to Warren Buffett's investment philosophy.
He revealed that the company had previously considered a sale for around NIS 3 billion, but he convinced the board that the energy unit was worth significantly more and that the market was poised for growth. Birman also discussed the company's past issues with over-leveraging, attributing it to prolonged low-interest rates, and its strategic shift from infrastructure to residential construction, where profitability and stability are greater. He highlighted the company's strong position as a contractor, particularly for residential projects, with over 50% of its backlog from external clients.
Looking ahead, Birman sees significant potential in the metro systems, particularly in tunneling, station construction, and operational systems, having recently acquired an elevator company to support these endeavors. He also noted the vast opportunities in the neglected U.S. infrastructure market, where projects are increasingly being offered through Build-Operate-Transfer (BOT) models. Birman also addressed the company's past struggles, including a significant loss on the Northern Road 6 tender and the fallout from a bribery scandal in Africa, which led to the sale of its African operations.
