Easot reports a record quarter: Net profit jumped 32% to 19.4 million shekels
The defense company controlled by the FIMI fund has moved from net debt to a financial surplus of 112 million shekels and holds an order backlog of 2.4 billion shekels. But the security moderation in the region poses a question: what will happen to demand when the arena calms down?
Easot Ashkelon, a manufacturer of drive systems and transmissions for IDF armored vehicles (Merkava, Namer, and others) controlled by the FIMI fund (50%), published its results for the second quarter of 2026 and recorded a record net profit of 19.4 million shekels, a jump of about 32% compared to the same period last year.
The jump in profitability is based mainly on an increase in activity with the Ministry of Defense following the war, alongside a sharp improvement in the company's balance sheet thanks to a capital raise of 120 million shekels carried out at the beginning of the year.
The interesting line in the report is the gap between revenue and profit. Revenue rose by only about 3.5% to 123.2 million shekels, while net profit jumped by almost 32%. Such a gap is a sign of operating leverage: when revenue rises slightly but profit jumps, it is a sign that the company is earning more on every shekel of sales.
Operating profit grew by about 9.9% to 20.6 million shekels, and EBITDA rose by about 9% to 25.4 million shekels. The net profit margin climbed from 12.3% last year to 15.7% this quarter. Part of the improvement in the bottom line came from a decrease in financing expenses: instead of paying interest on bank credit, Easot is now enjoying interest income on large cash balances.
The most dramatic figure is in the balance sheet. At the end of 2025, Easot's net financial debt stood at about 46 million shekels. At the end of the second quarter, it is already in the opposite situation — a net financial surplus of 112.6 million shekels.
This turnaround was financed mainly by a private share issuance to institutional investors in the amount of about 120 million shekels carried out in January, along with positive cash flow from current operations. Equity climbed in parallel to about 719.9 million shekels, compared to about 562.5 million shekels at the end of 2025.
The growth in Easot's military sector, mainly in the restoration of transmissions for the Ministry of Defense, came directly from the war. However, in recent months, a trend of security moderation has been recorded in the region, with a series of ceasefires mediated by the US with Iran and in Lebanon. For defense manufacturers, this is a double-edged sword: peak demand during wartime may moderate when the arena calms down. Facing this risk, Easot presents an order backlog and expected orders from framework agreements in the amount of about 2.4 billion shekels, a cushion that is spread over several years and provides some visibility.
Easot does not depend only on the Israeli defense budget. It supplies shafts and critical components for jet engines to international aviation corporations, operates the Reliance Gear company in Illinois, and in 2024 expanded its activity with the acquisition of the Israeli company EDC. The company notes that it is working to identify and promote M&A deals that will support growth.
Eli Damari, CEO of Easot Ashkelon, stated:
"We are concluding the second quarter of 2026 with record results. In this quarter, we recorded an increase in the revenues of the military sector as a result of the acceleration of the volume of activity with the Ministry of Defense following the continuation of the war, mainly in the fields of transmission restoration, which allow for increasing the synergy between projects in the military sector."
He added that since the beginning of 2026, the company has received additional orders from the Ministry of Defense totaling about 250 million NIS, and has signed significant contracts in the aviation sector totaling about 250 million dollars.
