3-fold profit jump: Real estate and infrastructure giant crushes forecasts

Shapir Engineering is a diversified company: on one hand, it produces and supplies raw materials for construction and infrastructure, and on the other, it is a residential real estate developer. Its reports clearly reflect the impact on the contracting sector at a time when commodity prices are rising and execution costs are no longer what they used to be.

Nevertheless, the second-quarter reports show that revenue grew by 21% to 1.684 billion shekels, compared to 1.392 billion shekels last year. Gross profit rose by about 24% to 224 million shekels, and the gross profit margin increased to 13.3%, compared to 12.9% in the corresponding quarter. Additionally, in the second quarter, the company recorded other net income of about 125 million shekels, mainly as a result of the revaluation of investment real estate. On the other hand, financing expenses for the period included a provision of about 45 million shekels for credit risk regarding loans granted to an associated company. These results are very strong and indicate that it was too early to write off companies with an execution arm, at a time when many contractors are going bankrupt.

Key figures from the report:

• Operating profit for the quarter totaled about 246 million shekels, compared to 90 million shekels in the second quarter of 2025.

• Adjusted EBITDA totaled about 423 million shekels, compared to 258 million shekels in the corresponding quarter.

• The group's net profit jumped almost 3 times, to about 136 million shekels, compared to 46 million shekels in the corresponding quarter, while profit attributable to shareholders totaled about 108 million shekels, compared to 47 million shekels last year.

Half-year figures:

In the first half of the year, the group's revenue grew by about 17% and totaled 3.241 billion shekels, compared to 2.762 billion shekels in the corresponding period in 2025. Gross profit for the half-year rose by 21% to 442 million shekels, and operating profit totaled 364 million shekels, compared to 181 million shekels in the corresponding half-year. Adjusted EBITDA reached 665 million shekels, compared to 478 million shekels. Net profit for the half-year totaled 195 million shekels, compared to 67 million shekels in the corresponding period, of which 164 million shekels are attributable to the company's shareholders.

In the residential sector, revenue in the second quarter rose by 84% to 162 million shekels, compared to 88 million shekels in the corresponding quarter, against the backdrop of an increase in the number of apartments sold and the expansion of development activity. In the first half of the year, sector revenue almost doubled and totaled 356 million shekels, compared to 180 million shekels in the corresponding period, and sector profit rose to 74 million shekels.

CFO Moshe Sabuski stated this morning:

"The results of the second quarter and the first half of the year reflect a significant increase in the group's activity volumes. The investments we have made in recent years are also reflected in production capacity and the ability to deal with challenges in the infrastructure sector. Winning the extension of Highway 6 to the north and the waste-to-energy facility project in Neot Hovav strengthen Shapir's backlog for the coming years."

Recall that in April, a memorandum of understanding was signed for the sale of the natural gas distribution activity. The company, through a subsidiary, entered into an agreement for the sale of all its rights in the companies Super NG Merkaz and Super NG Hadera, which hold licenses for natural gas distribution.