Fattal chain profits soar – but there is one figure to pay attention to

Fattal Holdings concludes the second quarter of 2026 with an increase in net profit and profitability metrics, despite the effects of exchange rates and the continued impact of the security situation on hotel operations in Israel.

The company's net profit in the second quarter totaled approximately 142 million shekels, compared to about 121 million shekels in the corresponding quarter last year, an increase of about 17%. Net profit excluding the impact of IFRS16 totaled about 164 million shekels, compared to about 148.9 million shekels in the corresponding quarter.

Revenues in the second quarter, including proportional consolidation, totaled about 2.36 billion shekels excluding the impact of exchange rates, compared to about 2.23 billion shekels in the corresponding quarter, an increase of about 5.7%. After the impact of exchange rates, revenues totaled about 2.1 billion shekels.

According to the company, the decrease in revenues in shekels was influenced, among other things, by Operation "Lion's Roar" and the continued security situation, which harmed inbound tourism to Israel, as well as a decrease of about 274 million shekels in revenues from operations in Europe as a result of exchange rate changes. In local currency, an increase in revenues was recorded in all sectors.

Growth was also recorded in profitability metrics. EBITDA, including proportional consolidation, totaled about 538 million shekels excluding the impact of exchange rates, and about 478 million shekels after its impact, compared to about 463 million shekels in the corresponding quarter. EBITDAR totaled about 881 million shekels excluding the impact of exchange rates and about 774 million shekels after its impact, compared to about 796 million shekels in the corresponding quarter.

The company notes that in local currency, an increase was recorded in metrics for operations in Europe, the UK, and Israel. Alongside this, the effects of exchange rates and the security situation in Israel harmed the results reported in shekels.

In the first half of 2026, revenues totaled about 3.5 billion shekels, compared to about 3.7 billion shekels in the corresponding half of last year.

At the same time, Fattal reports that it is meeting its annual forecasts for 2026 in the original currency, except in Israel, and has updated the forecast in shekels following the decline in exchange rates. The company expects revenues of 7.8–8.1 billion shekels, including proportional consolidation, and EBITDAR of 2.6–2.8 billion shekels.

Hotel occupancy results were mixed. In Israel, the occupancy rate in the second quarter rose to 60%, compared to 58% in the corresponding quarter. In the UK and Ireland, occupancy was about 83%, compared to 84% in the corresponding quarter. In Europe, the occupancy rate fell from 81% to 79%, and in the Mediterranean sector, a decrease from 86% to 80% was recorded.

The average daily rate (ADR) for the entire chain rose by 12% in local currency over the last two years, from about 144 euros in the second quarter of 2024 to about 162 euros in the second quarter of 2026.

As of the end of June 2026, the company's equity excluding IFRS16 increased to about 5.7 billion shekels. Fixed assets increased to about 12.3 billion shekels, compared to about 11.4 billion shekels in June 2025. Cash, cash equivalents, and securities held for trading totaled about 997 million shekels.

Alongside ongoing operations, the company continues to raise the fourth partnership for investments in hotels in Europe. The expected fundraising volume is about 800–1,000 million euros. Investment commitments of about 700 million euros have been signed by 9 partners, and about 140 million euros more have passed the required committees but the signing of the joining documents has not yet been completed. Fattal's share in the partnership is expected to be about 200 million euros.

Shahar Aka, Director and CFO, said:

"In the current quarter, an increase was recorded in almost all metrics in constant currency in the various sectors of the company's operations, growth that testifies to the company's operational capabilities."

Aka also said:

"In this quarter, the exchange rate harmed the results in shekels, and this is alongside a challenging security situation that prevented a full return of tourism to the company's hotels in Israel."

According to him, the positive trends of tourism in Europe continue and are expected to continue in the coming years.