Ashtrom paid 220 million shekels in interest - and moved from profit to loss
The company recorded a decrease in apartment sales in the second quarter of the year, but an increase in sales on a semi-annual basis. At Ashtrom, they admit that "there is a decrease in sales, but interest rate cuts will increase sales, including in high-demand areas." How many apartments did it manage to sell in the last 3 months?
The Ashtrom Group has launched a broad, nationwide advertising campaign in the residential sector in recent months - it offered discounts on apartment purchases and tried to maximize sales to increase revenue. The big question is how this campaign affected its financial results.
An examination of the second-quarter report shows that revenue in the second quarter totaled approximately 1.25 billion shekels, compared to approximately 1.1 billion shekels in the same quarter last year, an increase of approximately 13%. Gross profit in the second quarter totaled approximately 254 million shekels, compared to approximately 246 million shekels in the same quarter last year, an increase of approximately 3%.
Now, let's move on to apartment sales, where a decrease has been recorded in some companies in recent months, including transaction cancellations. In the first half and the second quarter of 2026, Ashtrom Residential sold 123 units and 52 units, respectively. In the first half and the second quarter of 2025, the company sold 112 units and 63 units - meaning there is a decrease in the second quarter, which was less successful than the first, and an increase in the half-year.
Revenue totaled approximately 215 million shekels, compared to approximately 168 million shekels last year - an increase of approximately 28%. Gross profit totaled approximately 29 million shekels, compared to approximately 39 million shekels in the same quarter. The gross profit margin in the second quarter stands at 13.6%, compared to 23.4% in the same quarter last year.
Why is there a decrease in profitability? Mainly due to the decline in apartment sales in Israel, with an emphasis on high-demand areas where the company operates, against the backdrop of high interest rates and the long war. The company estimates that "further interest rate cuts and security and political calm may improve market conditions and increase the ability to sell apartments, including in high-demand areas. This assessment by the company is based, among other things, on macro data in the market indicating a shortage of apartments in general, and in light of the war, of protected apartments in particular."
It is interesting to see that during a period of slowdown, the company recorded an increase in the value of investment real estate. The net amount in the second quarter totaled approximately 23 million shekels, compared to approximately 128 million shekels in the same quarter last year. Operating profit in the second quarter totaled approximately 149 million shekels, compared to approximately 274 million shekels in the same quarter last year, while net financing expenses are 223 million shekels, compared to approximately 176 million shekels in the same quarter last year - a very high figure. The company recorded a net loss of 78 million shekels, compared to a net profit of approximately 93 million shekels last year. The transition to a loss is mainly due to an increase in net financing expenses.
Equity attributable to shareholders stands at approximately 5.104 billion shekels, compared to 5.546 billion shekels, with the decrease mainly due to the impact of the decline in foreign exchange rates in the amount of approximately 240 million shekels, the loss of approximately 115 million shekels, and a dividend distribution of approximately 100 million shekels. The order backlog totaled approximately 9.3 billion shekels and rose shortly before the report's publication to 9.5 billion.
And what about the residential, construction contracting, and infrastructure market in Israel? There, an increase in revenue was actually recorded, but a decrease in profit. Revenue in the second quarter totaled approximately 727 million shekels, compared to approximately 647 million shekels in the same quarter last year, an increase of approximately 12.3%. Gross profit in the second quarter totaled approximately 49 million shekels, compared to approximately 62 million shekels in the same quarter last year. The gross profit margin in the second quarter stands at 6.7%, compared to 9.6% in the same quarter last year.
Rami Nussbaum, Chairman of the Ashtrom Group, said in response:
"We continue to promote the group's business and present good operational results, despite the complex security and economic reality in Israel. During the second quarter, we continued to increase our project backlog, invest in the development and expansion of production facilities, and locate attractive assets for acquisition in Israel and abroad. We believe that the State of Israel is heading towards huge investments in transport infrastructure in the coming years, which will positively affect the results of our contracting, industrial, and concession sectors. We will continue to act to realize business opportunities and will compete in the largest tenders in the economy. As part of the company's strategy for the coming years, we are strengthening the various sectors, while adding partners, reducing leverage, and taking additional actions to improve the company's capital base, along with continued growth."
