Metals Firm's Stock Soars Over 100%, Turning Chairman into Billionaire
Translated & summarized from Globes by baba
Shmuel Shila, chairman of the metals company Scopus, has become a billionaire on paper as the company's stock price has surged over 100% in the past year. Strong financial results, driven by international operations and a recent acquisition, have fueled the stock's performance, benefiting both the controlling shareholder and institutional investors.
The story in 5 lines · by baba
- Scopus stock price increased by 105% in one year, making chairman Shmuel Shila a billionaire.
- The company reported strong first-half financial results with increased revenues and profits.
- International operations, particularly in the U.S. and South Korea, drove revenue growth.
- Scopus recently acquired U.S. company North American Metals to expand into the oil and gas sector.
- Institutional investors have also seen significant returns on their Scopus holdings.
The significant rise in the Israeli stock market over recent years, coupled with strong performances from various companies, has substantially increased the wealth of many controlling shareholders. Among them is Shmuel Shila, the controlling shareholder and chairman of the metals company Scopus, whose net worth has reached billionaire status on paper due to a continuous surge in his company's stock price.
Over the past year, Scopus's stock price has jumped approximately 105%, bringing its market capitalization close to its July peak at around 3.8 billion shekels. This surge has propelled Shila's 40% stake in the company to a value exceeding 1.5 billion shekels. Despite the stock's appreciation, Shila increased his holdings slightly in the past year, acquiring shares worth about 5 million shekels.
Scopus, founded in 1980, imports and markets raw materials, primarily aluminum, steel, and nickel, as well as engineering plastics, serving industrial clients globally. Earlier this year, the company expanded into distributing specialized steel and metal products for the oil and gas industry by acquiring the U.S. company North American Metals (NAM) for approximately $23 million, with potential additional payments based on performance.
The stock's upward trend is largely attributed to the company's robust financial results. In the first half of the year, Scopus reported revenues of about 1.27 billion shekels, a 23% increase year-over-year, driven by higher demand and a shift in sales mix. The acquisition of NAM also contributed, with its revenues tripling to about 105 million shekels in the same period. Net profit rose by 31.5% to approximately 103 million shekels, boosted by improved gross and operating margins resulting from product mix changes.
International operations were the primary driver of Scopus's revenue growth, accounting for about 75% of first-half revenues, up from 69% in the prior year. Its U.S. and South Korean subsidiary, Hadco, contributed nearly 60% of revenues and grew by 38%. European subsidiaries in Poland, the Czech Republic, and Romania saw a 13% revenue increase, while its small Indian operation experienced a nearly 72% revenue jump. Scopus plans to expand into Southeast Asia by establishing operations in Singapore, Vietnam, and Thailand by 2027.
While international growth compensated for a slight 1% revenue decrease in local operations due to the strong shekel, the Israeli segment still improved its gross profit by 2%. Institutional investors, including Phoenix Insurance, Menora, Migdal, and Harel, along with investment house Meitav, hold significant stakes in Scopus, benefiting from the stock's substantial gains since a private placement last year.