Input index spike erodes Danya Cebus profit by 12.8%
Danya Cebus released its Q2 2026 results, showing steady revenue but a 12.8% decline in net profit due to rising construction costs and commodity prices. The board approved a 30 million shekel dividend distribution.
Danya Cebus is a major construction contractor, arguably the largest in Israel. The central question is how the company is navigating the current slowdown in the real estate market and the rising commodity prices impacting its bottom line.
According to the second-quarter reports for 2026, the company's revenue reached approximately 1.65 billion shekels, with a first-half total of 3.3 billion shekels, consistent with the previous year's activity levels. The order backlog as of the end of Q2 2026 stands at 23.5 billion shekels, up from 18.3 billion shekels in the same quarter last year.
Net profit, however, recorded a decline. In the current quarter, net profit amounted to 35.3 million shekels compared to approximately 40.5 million shekels in the same quarter last year—a decrease of 12.8%. EBITDA reached approximately 75.5 million shekels, compared to 72.6 million shekels in the same quarter last year.
The primary challenge stems from the construction input index and rising commodity prices. The company stated it continues to work with authorized bodies to make necessary adjustments to construction input indices to reflect changes in labor costs and workforce composition resulting from the war. Previously, Danya successfully demanded that the Central Bureau of Statistics update the index weightings.
The board of directors, following the company's recent departure from the top six companies in the real estate index, decided to distribute a 30 million shekel dividend to shareholders. For the first time, S&P Maalot has granted the company an AA- rating.
Danya primarily finances operations through its own equity. However, with the execution phase of PPP projects, such as the Blue Line in Jerusalem, the company issued 220 million shekels in debt securities to fund these investments. As of June 30, 2026, the company's equity stood at approximately 882 million shekels, with over 290 million shekels invested in PPP projects.
Ronen Ginzburg, CEO of Danya Group, stated:
"Danya is acting with increased vigor to maximize growth opportunities, with an emphasis on national infrastructure and construction projects, supported by an impressive 24 billion shekel backlog. We are expanding investments in PPP projects while maintaining financial robustness and a responsible leverage level, despite the challenges created by the war."
Yaakov Luxenburg, Chairman of Danya, added:
"Even in a period of ongoing uncertainty, the company continues to demonstrate financial resilience and consistent growth in its order backlog. Our strength allows us to realize business opportunities and establish growth engines for the coming years, while continuing to expand our long-term franchising activities."
