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IR - Elco Ltd. Q2 2024 financial report - translated version [The full Hebrew Q2 2024 report was published on August 28, 2024]

Company: Elco Ltd. Date: 2024-09-11 Language: English Register to download
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## **Interim Consolidated Financial Information**

#### **As of June 30, 2024**

### **Convenience Translation into U.S. Dollars**

#### **(Unaudited)**

This is an English translation of parts of the information included in the full Hebrew report of the company, that was published on August 28, 2024 (reference No. 2024-01-089463) at the ISA reporting website (magna.isa.gov.il) (hereafter: "the Hebrew Version"). The English version is Voluntary and only for convenience purposes. This is not an official translation and has no binding force. The translation in any case cannot perfectly reflect the Hebrew Version. In the event of any discrepancy between the Hebrew Version and this translation, the Hebrew Version shall prevail.

# **Contents**

| Review of<br>Interim<br>Information3                     |  |  |  |  |  |
|----------------------------------------------------------|--|--|--|--|--|
| Financial Information as of June 30, 2024<br>(Unaudited) |  |  |  |  |  |
| Consolidated<br>Information of Financial Position5       |  |  |  |  |  |
| Consolidated<br>Information of Profit or Loss7           |  |  |  |  |  |
| Consolidated<br>Information of Comprehensive Income8     |  |  |  |  |  |
| Consolidated<br>Information of Changes in<br>Equity<br>9 |  |  |  |  |  |
| Consolidated<br>Information of Cash<br>Flows14           |  |  |  |  |  |
| Notes to the Consolidated Financial Information18        |  |  |  |  |  |

![](_page_2_Picture_0.jpeg)

**To: Elco LTD.**

**Kost Forer Gabbay & Kasierer** 144 Menachem Begin Road, Building A, Tel-Aviv 6492102, Israel

Tel: +972-3-6232525 Fax: +972-3-5622555 ey.com

## <span id="page-2-0"></span>**Re: Convenience Translation of Interim Financial Information**

Per your request, we have reviewed the accompanying interim consolidated financial information of Elco Ltd. ("the Company") as of June 30, 2024 and for the periods of six months and of three months then ended ("the Interim Financial Information"). The Interim Financial Information is the responsibility of the Company's Board of Directors and management. Our responsibility is to express a conclusion regarding the Interim Financial Information based on our review.

We did not review the interim financial information of certain subsidiaries, whose assets constitute approximately 1.08% of the total consolidated assets as of June 30, 2024 and whose revenues constitute approximately 0% and approximately 0.53% of the total consolidated revenue for periods of six months and of the three months ended on June 30, 2023. Furthermore, we did not review the interim financial information of certain companies accounted for at equity, the investment in which amounted to approximately 109,680 thousand dollars as of June 30, 2024, and the Company's share of their profits (loss) amounted to approximately 9,603 thousand dollars and approximately 5,842 thousand dollars for the periods of six months and of three months ended on June 30, 2024. The interim financial information for those companies were reviewed by other auditors, whose reports have been furnished to us, and our conclusion, insofar as it relates to amounts included for those companies, is based on the reports of the other auditors.

We conducted our review in accordance with Review Standard (Israel) 2410 of the Institute of Certified Public Accountants in Israel, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards in Israel and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

The accompanying Interim Financial Information in US Dollars are a convenience translation of the interim consolidated financial statements as prepared in New Israeli Shekels at the rate of exchange of the Shekel into US Dollars prevailing on June 30, 2024, as described in note 3 of the Interim Financial Information.

Based on our review and the reports of the other auditors, we concluded an unqualified conclusion on the Company's consolidated interim financial statements in our report dated August 27, 2024.

The accompanying interim financial information, which are derived from the company's interim consolidated financial statements, are condensed interim financial information and do not include the disclosures required by International Financial Reporting Standards (IFRS). If the omitted disclosures were included in the accompanying interim financial information, it might influence the user's conclusions about the consolidated financial position, results of operations, changes in equity and cash flows of the company. Accordingly, the accompanying interim financial information are not designated for those who are not informed about such matters.

Based on our review and the reports of other auditors, nothing has come to our attention that causes us to believe that the accompanying Interim Financial Information is not present fairly, in all material respects, the information contained in it.

Tel-Aviv, Israel August 27, 2024 KOST FORER GABBAY & KASIERER A Member of Ernst & Young Global

## <span id="page-3-0"></span>**CONSOLIDATED INFORMATION OF FINANCIAL POSITION CONVENIENCE TRANSLATION INTO US DOLLARS (in thousands)**

|                                                                         | June 30<br>2024 | June 30<br>2023 | December 31<br>2023 |
|-------------------------------------------------------------------------|-----------------|-----------------|---------------------|
| Section                                                                 | Unaudited       | Unaudited       | Audited             |
| Current assets                                                          |                 |                 |                     |
| Cash and cash equivalents                                               | 225,342         | 237,424         | 306,010             |
| Short-term investments                                                  | 157,171         | 128,806         | 88,927              |
| Trade receivables                                                       | 759,856         | 672,827         | 668,975             |
| Other accounts receivables                                              | 755,639         | 732,956         | 661,361             |
| Inventory, inventory of land, buildings and apartments<br>for sale      | 823,675         | 612,603         | 759,687             |
| Assets held for sale                                                    | 6,019           | 112,643         | 125,119             |
|                                                                         | 2,727,702       | 2,497,259       | 2,610,079           |
| Non-current assets                                                      |                 |                 |                     |
| Long-term receivables                                                   | 128,753         | 78,717          | 120,152             |
| Receivables for concession arrangement for the<br>provision of services | 64,237          | 45,862          | 57,069              |
| Investment in entities accounted for at equity                          | 844,696         | 964,604         | 868,443             |
| Long-term inventory of land                                             | 254,075         | 356,986         | 208,064             |
| Investment property and investment property<br>under construction       | 122,281         | 114,837         | 121,838             |
| Fixed assets                                                            | 577,264         | 496,662         | 536,971             |
| Right-of-use<br>assets                                                  | 792,746         | 625,297         | 620,693             |
| Goodwill and other intangible assets                                    | 1,206,089       | 1,244,250       | 1,202,657           |
| Deferred taxes                                                          | 33,529          | 29,755          | 33,189              |
|                                                                         | 4,023,670       | 3,956,970       | 3,769,076           |
|                                                                         | 6,751,372       | 6,454,229       | 6,379,155           |

## **CONSOLIDATED INFORMATION OF FINANCIAL POSITION CONVENIENCE TRANSLATION INTO US DOLLARS (in thousands**)

|                                                      | June 30<br>2024 | June 30<br>2023 | December 31<br>2023 |
|------------------------------------------------------|-----------------|-----------------|---------------------|
| Section                                              | Unaudited       | Unaudited       | Audited             |
| Current Liabilities                                  |                 |                 |                     |
| Credit from banking institutions and others          | 717,283         | 669,426         | 611,079 *)          |
| Bonds -<br>current maturities                        | 137,870         | 113,390         | 123,582             |
| Current maturities of leasing liabilities            | 101,662         | 97,696          | 108,037             |
| Suppliers and providers of services                  | 1,121,330       | 1,047,135       | 1,044,681           |
| Other payables                                       | 775,446         | 737,294         | 782,294             |
| Liabilities attributed to assets held for sale       | -               | 116,579         | 119,353             |
|                                                      | 2,853,591       | 2,781,520       | 2,789,026           |
| Long-Term Liabilities                                |                 |                 |                     |
| Credit from banking institutions and others          | 684,042         | 674,713         | 723,110 *)          |
| Bonds                                                | 778,565         | 621,982         | 629,591             |
| Leasing liabilities                                  | 767,662         | 590,678         | 585,163             |
| Other liabilities                                    | 169,088         | 168,849         | 154,659             |
| Employee benefit liabilities, net                    | 22,064          | 22,969          | 22,051              |
| Deferred taxes                                       | 123,480         | 166,543         | 149,237             |
|                                                      | 2,544,901       | 2,245,734       | 2,263,811           |
| Equity                                               |                 |                 |                     |
| Equity attributable to equity holders of the Company | 593,225         | 666,501         | 598,097             |
| Non-controlling interests                            | 759,655         | 760,474         | 728,221             |
| Total equity                                         | 1,352,880       | 1,426,975       | 1,326,318           |
|                                                      | 6,751,372       | 6,454,229       | 6,379,155           |
|                                                      |                 |                 |                     |

\*) Reclassified.

August 27, 2024

Date of approval of financial statements

E. Vessely Chief Financial Officer

Chief Financial Officer sig

> D. Salkind Joint General Manager

Joint General Manager sign

> M. Fridman Chairman of the Board of Directors

> Chairman of the Board of Directors signture

## <span id="page-5-0"></span>**CONSOLIDATED INFORMATION OF PROFIT OR LOSS CONVENIENCE TRANSLATION INTO US DOLLARS (in thousands)**

|                                                                                                                    | Six<br>months<br>ended<br>June 30<br>2024 | Six<br>months<br>ended<br>June 30<br>2023 *) | Three<br>months<br>ended<br>June 30<br>2024 | Three<br>months<br>ended<br>June 30<br>2023 *) | Year ended<br>December 31<br>2023 *) |
|--------------------------------------------------------------------------------------------------------------------|-------------------------------------------|----------------------------------------------|---------------------------------------------|------------------------------------------------|--------------------------------------|
| Section                                                                                                            | Unaudited                                 | Unaudited                                    | Unaudited                                   | Unaudited                                      | Audited                              |
| Revenues, net<br>Adjustment of the fair value and the<br>results of the disposal of income                         | 2,611,331                                 | 2,434,059                                    | 1,308,752                                   | 1,195,498                                      | 4,970,952                            |
| generating assets, net<br>Group's share of the profits<br>(losses)<br>of companies accounted for at<br>equity, net | (403)<br>(27,773)                         | (188)<br>19,809                              | (174)<br>(20,602)                           | (92)<br>12,872                                 | (1,891)<br>8,967                     |
| Other income                                                                                                       | 11,015                                    | 12,534                                       | 4,368                                       | 10,077                                         | 17,516                               |
| Total                                                                                                              | 2,594,170                                 | 2,466,214                                    | 1,292,344                                   | 1,218,355                                      | 4,995,544                            |
| Cost of producing revenues<br>Selling and marketing expenses                                                       | (2,220,625)<br>(245,764)                  | (2,069,348)<br>(231,458)                     | (1,115,406)<br>(124,550)                    | (1,029,666)<br>(118,939)                       | (4,247,007)<br>(467,788)             |
| Administrative and general<br>expenses<br>Other expenses                                                           | (84,140)<br>(19,275)                      | (83,198)<br>(40,777)                         | (42,253)<br>(7,144)                         | (41,112)<br>(29,461)                           | (163,554)<br>(67,212)                |
| Financing income<br>Financing expenses                                                                             | 18,755<br>(75,153)                        | 16,180<br>(82,903)                           | 9,241<br>(37,304)                           | 7,570<br>(47,880)                              | 23,515<br>(152,786)                  |
| Total                                                                                                              | (2,626,202)                               | (2,491,504)                                  | (1,317,416)                                 | (1,259,488)                                    | (5,074,832)                          |
| Loss<br>before taxes on income                                                                                     | (32,032)                                  | (25,290)                                     | (25,072)                                    | (41,133)                                       | (79,288)                             |
| Tax benefit (taxes on income)                                                                                      | 2,241                                     | (12,480)                                     | 5,115                                       | (2,202)                                        | (13,559)                             |
| Loss from continuing operations<br>Loss<br>from discontinued operations,<br>net                                    | (29,791)<br>(2,891)                       | (37,770)<br>(7,866)                          | (19,957)<br>(1,455)                         | (43,335)<br>(4,245)                            | (92,847)<br>(43,098)                 |
|                                                                                                                    |                                           |                                              |                                             |                                                |                                      |
| Loss<br>Attributable to:                                                                                           | (32,682)                                  | (45,636)                                     | (21,412)                                    | (47,580)                                       | (135,945)                            |
| Equity holders in the Company<br>Non-controlling interest                                                          | (25,308)<br>(7,374)                       | (32,578)<br>(13,058)                         | (14,265)<br>(7,147)                         | (36,051)<br>(11,529)                           | (76,813)<br>(59,132)                 |
|                                                                                                                    | (32,682)                                  | (45,636)                                     | (21,412)                                    | (47,580)                                       | (135,945)                            |
| Loss per share -<br>attributable to<br>the equity holders of the<br>Company:                                       |                                           |                                              |                                             |                                                |                                      |
| Basic -<br>loss                                                                                                    |                                           |                                              |                                             |                                                |                                      |
| From continuing operations                                                                                         | (0.89)                                    | (1.06)                                       | (0.51)                                      | (1.25)                                         | (2.04)                               |
| From discontinued operations                                                                                       | (0.05)                                    | (0.14)                                       | (0.02)                                      | (0.08)                                         | (0.79)                               |
|                                                                                                                    | (0.94)                                    | (1.20)                                       | (0.53)                                      | (1.33)                                         | (2.83)                               |
| Fully diluted -<br>loss                                                                                            |                                           |                                              |                                             |                                                |                                      |
| From continuing operations<br>From discontinued operations                                                         | (0.89)<br>(0.05)                          | (1.06)<br>(0.14)                             | (0.51)<br>(0.02)                            | (1.25)<br>(0.08)                               | (2.07)<br>(0.79)                     |
|                                                                                                                    | (0.94)                                    | (1.20)                                       | (0.53)                                      | (1.33)                                         | (2.86)                               |
|                                                                                                                    |                                           |                                              |                                             |                                                |                                      |

\*) Reclassified for discontinued operations.

## <span id="page-6-0"></span>**CONSOLIDATED INFORMATION OF COMPREHENSIVE INCOME CONVENIENCE TRANSLATION INTO US DOLLARS (in thousands)**

|                                                                                                                                                    | Six<br>months<br>ended<br>June 30<br>2024 | Six<br>months<br>ended<br>June 30<br>2023 | Three<br>months<br>ended<br>June 30<br>2024 | Three<br>months<br>ended<br>June 30<br>2023 | Year ended<br>December 31<br>2023 |
|----------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------|-------------------------------------------|---------------------------------------------|---------------------------------------------|-----------------------------------|
| Section                                                                                                                                            | Unaudited                                 | Unaudited                                 | Unaudited                                   | Unaudited                                   | Audited                           |
| Loss                                                                                                                                               | (32,682)                                  | )45,636)                                  | (21,412)                                    | (47,580)                                    | (135,945)                         |
| Other comprehensive income (loss)<br>(after tax effects):                                                                                          |                                           |                                           |                                             |                                             |                                   |
| Amounts that will never be<br>reclassified to profit or loss:                                                                                      |                                           |                                           |                                             |                                             |                                   |
| Gain from the re-measurement of<br>defined benefit plans, net                                                                                      | -                                         | -                                         | -                                           | -                                           | 326                               |
| Revaluation of a fixed asset that has<br>been reclassified to investment<br>property                                                               | -                                         | 3,409                                     | -                                           | -                                           | 3,409                             |
|                                                                                                                                                    | -                                         | 3,409                                     | -                                           | -                                           | 3,735                             |
| Amounts that will be classified or<br>reclassified to the profit or loss,<br>when specific conditions are<br>met:<br>Adjustments deriving from the |                                           |                                           |                                             |                                             |                                   |
| translation of the financial<br>statements of foreign operations,<br>net                                                                           | 32,430                                    | 26,376                                    | 18,170                                      | 13,650                                      | 11,019                            |
| Realization of reserve on translation<br>differences on foreign operations                                                                         | 978                                       | -                                         | -                                           | -                                           | -                                 |
| Gain<br>(loss)<br>on hedging transactions,<br>net                                                                                                  | 2,385                                     | 3,185                                     | 990                                         | (1,720)                                     | 1,019                             |
|                                                                                                                                                    | 35,793                                    | 29,561                                    | 19,160                                      | 11,930                                      | 12,038                            |
| Total other comprehensive<br>income                                                                                                                | 35,793                                    | 32,970                                    | 19,160                                      | 11,930                                      | 15,773                            |
| Total comprehensive income<br>(loss)                                                                                                               | 3,111                                     | (12,666)                                  | (2,252)                                     | (35,650)                                    | (120,172)                         |
| Comprehensive income (loss)<br>attributable to:                                                                                                    |                                           |                                           |                                             |                                             |                                   |
| Equity holders in the company                                                                                                                      | (6,179)                                   | (10,408)                                  | (3,883)                                     | (28,261)                                    | (64,533)                          |
| Non-controlling interests                                                                                                                          | 9,290                                     | (2,258)                                   | 1,631                                       | (7,389)                                     | (55,639)                          |
|                                                                                                                                                    | 3,111                                     | (12,666)                                  | (2,252)                                     | (35,650)                                    | (120,172)                         |

<span id="page-7-0"></span>

| Section                                                                         | Share<br>Capital<br>Unaudited | Share<br>Premium<br>Unaudited | Treasury<br>Shares<br>Unaudited | Retained<br>Earnings<br>Unaudited | Capital<br>reserve on<br>transactions<br>With<br>controlling<br>interests<br>Unaudited | Capital reserve<br>on financial<br>assets at fair<br>value through<br>other<br>comprehensive<br>income<br>Unaudited | Capital<br>reserve on<br>hedging<br>transactions<br>Unaudited | Capital<br>reserve on the<br>re<br>measurement<br>of defined<br>benefit plans<br>Unaudited | Adjustment<br>s deriving<br>from the<br>translation<br>of financial<br>Statements<br>Unaudited | Capital<br>reserve on<br>share<br>based<br>payment<br>Unaudited | Total<br>Attributable<br>to equity<br>holders in<br>the company<br>Unaudited | Non<br>controlling<br>interests<br>Unaudited | Total<br>equity<br>Unaudited |
|---------------------------------------------------------------------------------|-------------------------------|-------------------------------|---------------------------------|-----------------------------------|----------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------|--------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|------------------------------------------------------------------------------|----------------------------------------------|------------------------------|
| Balance as of January 1, 2024<br>(Audited)                                      | 30,330                        | 16,999                        | (78,331)                        | 724,695                           | 269                                                                                    | (47,788)                                                                                                            | 3,667                                                         | 703                                                                                        | (61,342)                                                                                       | 8,895                                                           | 598,097                                                                      | 728,221                                      | 1,326,318                    |
| Loss                                                                            | -                             | -                             | -                               | (25,308)                          | -                                                                                      | -                                                                                                                   | -                                                             | -                                                                                          | -                                                                                              | -                                                               | (25,308)                                                                     | (7,374)                                      | (32,682)                     |
| Total other comprehensive<br>income                                             | -                             | -                             | -                               | -                                 | -                                                                                      | -                                                                                                                   | 1,128                                                         | -                                                                                          | 18,001                                                                                         | -                                                               | 19,129                                                                       | 16,664                                       | 35,793                       |
| Total comprehensive income<br>(loss)                                            | -                             | -                             | -                               | (25,308)                          | -                                                                                      | -                                                                                                                   | 1,128                                                         | -                                                                                          | 18,001                                                                                         | -                                                               | (6,179)                                                                      | 9,290                                        | 3,111                        |
| Cost of share-based payment                                                     | -                             | -                             | -                               | -                                 | -                                                                                      | -                                                                                                                   | -                                                             | -                                                                                          | -                                                                                              | 121                                                             | 121                                                                          | 3,669                                        | 3,790                        |
| Dividend to shareholders in the<br>company                                      | -                             | -                             | -                               | (7,981)                           | -                                                                                      | -                                                                                                                   | -                                                             | -                                                                                          | -                                                                                              | -                                                               | (7,981)                                                                      | -                                            | (7,981)                      |
| Dividend to non-controlling<br>interests                                        | -                             | -                             | -                               | -                                 | -                                                                                      | -                                                                                                                   | -                                                             | -                                                                                          | -                                                                                              | -                                                               | -                                                                            | (11,803)                                     | (11,803)                     |
| Acquisition of treasury shares in<br>the company and in subsidiary<br>companies | -                             | -                             | (3,255)                         | (2,073)                           | -                                                                                      | -                                                                                                                   | -                                                             | -                                                                                          | -                                                                                              | -                                                               | (5,328)                                                                      | (2,461)                                      | (7,789)                      |
| Exercise of option warrants                                                     | 1                             | 133                           | -                               | -                                 | -                                                                                      | -                                                                                                                   | -                                                             | -                                                                                          | -                                                                                              | (133)                                                           | 1                                                                            | -                                            | 1                            |
| Entry of a consolidated company<br>into consolidation                           | -                             | -                             | -                               | -                                 | -                                                                                      | -                                                                                                                   | -                                                             | -                                                                                          | -                                                                                              | -                                                               | -                                                                            | (50)                                         | (50)                         |
| Issuance of capital/purchase and<br>sale of shares in consolidated<br>companies | -                             | -                             | -                               | 13,035                            | -                                                                                      | 1,559                                                                                                               | -                                                             | (1)                                                                                        | (99)                                                                                           | -                                                               | 14,494                                                                       | 32,789                                       | 47,283                       |
| As of June 30,<br>2024                                                          | 30,331                        | 17,132                        | (81,586)                        | 702,368                           | 269                                                                                    | (46,229)                                                                                                            | 4,795                                                         | 702                                                                                        | (43,440)                                                                                       | 8,883                                                           | 593,225                                                                      | 759,655                                      | 1,352,880                    |

| Section                                                                               | Share<br>Capital<br>Unaudited | Share<br>Premium<br>Unaudited | Treasury<br>Shares<br>Unaudited | Retained<br>Earnings<br>Unaudited | Capital<br>reserve on<br>transactions<br>With<br>controlling<br>interests<br>Unaudited | Capital reserve<br>on financial<br>assets at fair<br>value through<br>other<br>comprehensive<br>income<br>Unaudited | Capital<br>reserve on<br>hedging<br>transactions<br>Unaudited | Capital<br>reserve on the<br>re<br>measurement<br>of defined<br>benefit plans<br>Unaudited | Adjustment<br>s deriving<br>from the<br>translation<br>of financial<br>Statements<br>Unaudited | Capital<br>reserve on<br>share<br>based<br>payment<br>Unaudited | Revaluation<br>reserve<br>Unaudited | Total<br>Attributable<br>to equity<br>holders in<br>the company<br>Unaudited | Non<br>controlling<br>interests<br>Unaudited | Total<br>equity<br>Unaudited |
|---------------------------------------------------------------------------------------|-------------------------------|-------------------------------|---------------------------------|-----------------------------------|----------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------|--------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|-------------------------------------|------------------------------------------------------------------------------|----------------------------------------------|------------------------------|
| Balance as of January<br>1, 2023<br>(Audited)                                         | 30,329                        | 16,833                        | (74,467)                        | 819,534                           | 269                                                                                    | (48,867)                                                                                                            | 3,367                                                         | 513                                                                                        | (69,623)                                                                                       | 8,738                                                           | -                                   | 686,626                                                                      | 762,714                                      | 1,449,340                    |
| Loss                                                                                  | -                             | -                             | -                               | (32,578)                          | -                                                                                      | -                                                                                                                   | -                                                             | -                                                                                          | -                                                                                              | -                                                               | -                                   | (32,578)                                                                     | (13,058)                                     | (45,636)                     |
| Total other<br>comprehensive<br>income                                                | -                             | -                             | -                               | -                                 | -                                                                                      | -                                                                                                                   | 1,317                                                         | -                                                                                          | 17,444                                                                                         | -                                                               | 3,409                               | 22,170                                                                       | 10,800                                       | 32,970                       |
| Total comprehensive<br>income (loss)                                                  | -                             | -                             | -                               | (32,578)                          | -                                                                                      | -                                                                                                                   | 1,317                                                         | -                                                                                          | 17,444                                                                                         | -                                                               | 3,409                               | (10,408)                                                                     | (2,258)                                      | (12,666)                     |
| Cost of share-based<br>payment                                                        | -                             | -                             | -                               | -                                 | -                                                                                      | -                                                                                                                   | -                                                             | -                                                                                          | -                                                                                              | 176                                                             | -                                   | 176                                                                          | 4,124                                        | 4,300                        |
| Dividend to<br>shareholders in the<br>company                                         | -                             | -                             | -                               | (13,301)                          | -                                                                                      | -                                                                                                                   | -                                                             | -                                                                                          | -                                                                                              | -                                                               | -                                   | (13,301)                                                                     | -                                            | (13,301)                     |
| Dividend to non<br>controlling interests                                              | -                             | -                             | -                               | -                                 | -                                                                                      | -                                                                                                                   | -                                                             | -                                                                                          | -                                                                                              | -                                                               | -                                   | -                                                                            | (14,982)                                     | (14,982)                     |
| Acquisition of treasury<br>shares in the<br>company and in<br>subsidiary companies    | -                             | -                             | (414)                           | (1,865)                           | -                                                                                      | -                                                                                                                   | -                                                             | -                                                                                          | -                                                                                              | -                                                               | -                                   | (2,279)                                                                      | (2,016)                                      | (4,295)                      |
| Exercise of option<br>warrants                                                        | 1                             | 166                           | -                               | -                                 | -                                                                                      | -                                                                                                                   | -                                                             | -                                                                                          | -                                                                                              | (166)                                                           | -                                   | 1                                                                            | -                                            | 1                            |
| Exit of a consolidated<br>partnership from<br>consolidation                           | -                             | -                             | -                               | -                                 | -                                                                                      | -                                                                                                                   | -                                                             | -                                                                                          | -                                                                                              | -                                                               | -                                   | -                                                                            | 732                                          | 732                          |
| Issuance of<br>capital/purchase and<br>sale of shares in<br>consolidated<br>companies | -                             | -                             | -                               | 4,876                             | -                                                                                      | 873                                                                                                                 | 4                                                             | -                                                                                          | (67)                                                                                           | -                                                               | -                                   | 5,686                                                                        | 12,160                                       | 17,846                       |
| As of June 30, 2023                                                                   | 30,330                        | 16,999                        | (74,881)                        | 776,666                           | 269                                                                                    | (47,994)                                                                                                            | 4,688                                                         | 513                                                                                        | (52,246)                                                                                       | 8,748                                                           | 3,409                               | 666,501                                                                      | 760,474                                      | 1,426,975                    |
|                                                                                       |                               |                               |                                 |                                   |                                                                                        |                                                                                                                     |                                                               |                                                                                            |                                                                                                |                                                                 |                                     |                                                                              |                                              |                              |

|                                                                                 | Share<br>Capital | Share<br>Premium | Treasury<br>Shares | Retained<br>Earnings | Capital<br>reserve on<br>transactions<br>With<br>controlling<br>interests | Capital reserve<br>on financial<br>assets at fair<br>value through<br>other<br>comprehensive<br>income | Capital<br>reserve on<br>hedging<br>transactions | Capital<br>reserve on the<br>re<br>measurement<br>of defined<br>benefit plans | Adjustment<br>s deriving<br>from the<br>translation<br>of financial<br>Statements | Capital<br>reserve on<br>share<br>based<br>payment | Total<br>Attributable<br>to equity<br>holders in<br>the company | Non<br>controlling<br>interests | Total<br>equity |
|---------------------------------------------------------------------------------|------------------|------------------|--------------------|----------------------|---------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|--------------------------------------------------|-------------------------------------------------------------------------------|-----------------------------------------------------------------------------------|----------------------------------------------------|-----------------------------------------------------------------|---------------------------------|-----------------|
| Section                                                                         | Unaudited        | Unaudited        | Unaudited          | Unaudited            | Unaudited                                                                 | Unaudited                                                                                              | Unaudited                                        | Unaudited                                                                     | Unaudited                                                                         | Unaudited                                          | Unaudited                                                       | Unaudited                       | Unaudited       |
| Balance as of April<br>1, 2024                                                  | 30,330           | 16,999           | (81,586)           | 709,491              | 269                                                                       | (46,229)                                                                                               | 4,325                                            | 704                                                                           | (53,348)                                                                          | 8,968                                              | 589,923                                                         | 762,586                         | 1,352,509       |
| Loss                                                                            | -                | -                | -                  | (14,265)             | -                                                                         | -                                                                                                      | -                                                | -                                                                             | -                                                                                 | -                                                  | (14,265)                                                        | (7,147)                         | (21,412)        |
| Total other comprehensive<br>income                                             | -                | -                | -                  | -                    | -                                                                         | -                                                                                                      | 470                                              | -                                                                             | 9,912                                                                             | -                                                  | 10,382                                                          | 8,778                           | 19,160          |
| Total comprehensive income<br>(loss)                                            | -                | -                | -                  | (14,265)             | -                                                                         | -                                                                                                      | 470                                              | -                                                                             | 9,912                                                                             | -                                                  | (3,883)                                                         | 1,631                           | (2,252)         |
| Cost of share-based payment                                                     | -                | -                | -                  | -                    | -                                                                         | -                                                                                                      | -                                                | -                                                                             | -                                                                                 | 48                                                 | 48                                                              | 1,867                           | 1,915           |
| Dividend to non-controlling<br>interests                                        | -                | -                | -                  | -                    | -                                                                         | -                                                                                                      | -                                                | -                                                                             | -                                                                                 | -                                                  | -                                                               | (3,607)                         | (3,607)         |
| Acquisition of treasury shares in<br>the company and in subsidiary<br>companies | -                | -                | -                  | (1,404)              | -                                                                         | -                                                                                                      | -                                                | -                                                                             | -                                                                                 | -                                                  | (1,404)                                                         | (1,667)                         | (3,071)         |
| Exercise of option warrants                                                     | 1                | 133              | -                  | -                    | -                                                                         | -                                                                                                      | -                                                | -                                                                             | -                                                                                 | (133)                                              | 1                                                               | -                               | 1               |
| Entry of a consolidated company<br>into consolidation                           | -                | -                | -                  | -                    | -                                                                         | -                                                                                                      | -                                                | -                                                                             | -                                                                                 | -                                                  | -                                                               | (50)                            | (50)            |
| Issuance of capital/purchase and<br>sale of shares in consolidated<br>companies | -                | -                | -                  | 8,546                | -                                                                         | -                                                                                                      | -                                                | (2)                                                                           | (4)                                                                               | -                                                  | 8,540                                                           | (1,105)                         | 7,435           |
| As of June 30, 2024                                                             | 30,331           | 17,132           | (81,586)           | 702,368              | 269                                                                       | (46,229)                                                                                               | 4,795                                            | 702                                                                           | (43,440)                                                                          | 8,883                                              | 593,225                                                         | 759,655                         | 1,352,880       |

|                                                                                       | Share<br>Capital | Share<br>Premium | Treasury<br>Shares | Retained<br>Earnings | Capital<br>reserve on<br>transactions<br>With<br>controlling<br>interests | Capital reserve<br>on financial<br>assets at fair<br>value through<br>other<br>comprehensive<br>income | Capital<br>reserve on<br>hedging<br>transactions | Capital<br>reserve on the<br>re<br>measurement<br>of defined<br>benefit plans | Adjustment<br>s deriving<br>from the<br>translation<br>of financial<br>Statements | Capital<br>reserve on<br>share<br>based<br>payment | Revaluation<br>reserve | Total<br>Attributable<br>to equity<br>holders in<br>the company | Non<br>controlling<br>interests | Total<br>equity |
|---------------------------------------------------------------------------------------|------------------|------------------|--------------------|----------------------|---------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|--------------------------------------------------|-------------------------------------------------------------------------------|-----------------------------------------------------------------------------------|----------------------------------------------------|------------------------|-----------------------------------------------------------------|---------------------------------|-----------------|
| Section                                                                               | Unaudited        | Unaudited        | Unaudited          | Unaudited            | Unaudited                                                                 | Unaudited                                                                                              | Unaudited                                        | Unaudited                                                                     | Unaudited                                                                         | Unaudited                                          | Unaudited              | Unaudited                                                       | Unaudited                       | Unaudited       |
| Balance as of April<br>1,<br>2023                                                     | 30,329           | 16,833           | (74,881)           | 811,252              | 269                                                                       | (48,867)                                                                                               | 5,479                                            | 512                                                                           | (60,763)                                                                          | 8,829                                              | 3,409                  | 692,401                                                         | 759,344                         | 1,451,745       |
| Loss                                                                                  | -                | -                | -                  | (36,051)             | -                                                                         | -                                                                                                      | -                                                | -                                                                             | -                                                                                 | -                                                  | -                      | (36,051)                                                        | (11,529)                        | (47,580)        |
| Total other<br>comprehensive<br>income (loss)                                         | -                | -                | -                  | -                    | -                                                                         | -                                                                                                      | (794)                                            | -                                                                             | 8,584                                                                             | -                                                  | -                      | 7,790                                                           | 4,140                           | 11,930          |
| Total comprehensive<br>income<br>(loss)                                               | -                | -                | -                  | (36,051)             | -                                                                         | -                                                                                                      | (794)                                            | -                                                                             | 8,584                                                                             | -                                                  | -                      | (28,261)                                                        | (7,389)                         | (35,650)        |
| Cost of share-based<br>payment                                                        | -                | -                | -                  | -                    | -                                                                         | -                                                                                                      | -                                                | -                                                                             | -                                                                                 | 85                                                 | -                      | 85                                                              | 2,208                           | 2,293           |
| Dividend to non<br>controlling interests                                              | -                | -                | -                  | -                    | -                                                                         | -                                                                                                      | -                                                | -                                                                             | -                                                                                 | -                                                  | -                      | -                                                               | (188)                           | (188)           |
| Acquisition of treasury<br>shares in the<br>company and in<br>subsidiary companies    | -                | -                | -                  | (1,368)              | -                                                                         | -                                                                                                      | -                                                | -                                                                             | -                                                                                 | -                                                  | -                      | (1,368)                                                         | (1,495)                         | (2,863)         |
| Exercise of option<br>warrants                                                        | 1                | 166              | -                  | -                    | -                                                                         | -                                                                                                      | -                                                | -                                                                             | -                                                                                 | (166)                                              | -                      | 1                                                               | -                               | 1               |
| Exit of a consolidated<br>partnership from<br>consolidation                           | -                | -                | -                  | -                    | -                                                                         | -                                                                                                      | -                                                | -                                                                             | -                                                                                 | -                                                  | -                      | -                                                               | 732                             | 732             |
| Issuance of<br>capital/purchase and<br>sale of shares in<br>consolidated<br>companies | -                | -                | -                  | 2,833                | -                                                                         | 873                                                                                                    | 3                                                | 1                                                                             | (67)                                                                              | -                                                  | -                      | 3,643                                                           | 7,262                           | 10,905          |
| As of June 30, 2023                                                                   | 30,330           | 16,999           | (74,881)           | 776,666              | 269                                                                       | (47,994)                                                                                               | 4,688                                            | 513                                                                           | (52,246)                                                                          | 8,748                                              | 3,409                  | 666,501                                                         | 760,474                         | 1,426,975       |

| paragraph                                                                        |                  |                  |                    |                      | Capital<br>reserve on<br>transactions<br>with | Capital<br>reserve on<br>financial assets<br>at fair value<br>through other | Capital<br>reserve on   | Capital<br>reserve on<br>the re<br>measurement | Adjustments<br>deriving<br>from the<br>translation | Capital<br>reserve<br>on<br>share |                        | Total<br>attributable<br>to<br>equity<br>holders | Non                      |                 |
|----------------------------------------------------------------------------------|------------------|------------------|--------------------|----------------------|-----------------------------------------------|-----------------------------------------------------------------------------|-------------------------|------------------------------------------------|----------------------------------------------------|-----------------------------------|------------------------|--------------------------------------------------|--------------------------|-----------------|
|                                                                                  | Share<br>capital | Share<br>premium | Treasury<br>shares | Retained<br>earnings | controlling<br>interests                      | comprehensive<br>income                                                     | hedging<br>transactions | of defined<br>benefit plans                    | of financial<br>Statements                         | based<br>payment                  | Revaluation<br>reserve | in the<br>company                                | controlling<br>interests | Total<br>equity |
|                                                                                  | Audited          | Audited          | Audited            | Audited              | Audited                                       | Audited                                                                     | Audited                 | Audited                                        | Audited                                            | Audited                           | Audited                | Audited                                          | Audited                  | Audited         |
| Balance as of January 1, 2023                                                    | 30,329           | 16,833           | (74,467)           | 819,534              | 269                                           | (48,867)                                                                    | 3,367                   | 513                                            | (69,623)                                           | 8,738                             | -                      | 686,626                                          | 762,714                  | 1,449,340       |
| Loss                                                                             | -                | -                | -                  | (76,813)             | -                                             | -                                                                           | -                       | -                                              | -                                                  | -                                 | -                      | (76,813)                                         | (59,132)                 | (135,945)       |
| Total other comprehensive income                                                 | -                | -                | -                  | -                    | -                                             | -                                                                           | 299                     | 171                                            | 8,401                                              | -                                 | 3,409                  | 12,280                                           | 3,493                    | 15,773          |
| Total comprehensive income<br>(loss)                                             | -                | -                | -                  | (76,813)             | -                                             | -                                                                           | 299                     | 171                                            | 8,401                                              | -                                 | 3,409                  | (64,533)                                         | (55,639)                 | (120,172)       |
| Cost of share-based payment                                                      | -                | -                | -                  | -                    | -                                             | -                                                                           | -                       | -                                              | -                                                  | 323                               | -                      | 323                                              | 8,364                    | 8,687           |
| Dividend to shareholders in the<br>company                                       | -                | -                | -                  | (18,622)             | -                                             | -                                                                           | -                       | -                                              | -                                                  | -                                 | -                      | (18,622)                                         | -                        | (18,622)        |
| Dividend to non-controlling<br>interests                                         | -                | -                | -                  | -                    | -                                             | -                                                                           | -                       | -                                              | -                                                  | -                                 | -                      | -                                                | (26,853)                 | (26,853)        |
| Acquisition of treasury shares in<br>the company and in subsidiary<br>companies  | -                | -                | (3,864)            | (4,791)              | -                                             | -                                                                           | -                       | -                                              | -                                                  | -                                 | -                      | (8,655)                                          | (5,281)                  | (13,936)        |
| Exercise of option warrants                                                      | 1                | 166              | -                  | -                    | -                                             | -                                                                           | -                       | -                                              | -                                                  | (166)                             | -                      | 1                                                | -                        | 1               |
| Non-controlling interests arising<br>from initially consolidated<br>companies    | -                | -                | -                  | -                    | -                                             | -                                                                           | -                       | -                                              | -                                                  | -                                 | -                      | -                                                | 825                      | 825             |
| Exit of a consolidated partnership<br>from consolidation                         | -                | -                | -                  | -                    | -                                             | -                                                                           | -                       | -                                              | -                                                  | -                                 | -                      | -                                                | 732                      | 732             |
| Issuance of capital /purchase and<br>sale of shares in consolidated<br>companies | -                | -                | -                  | 5,387                | -                                             | 1,079                                                                       | 1                       | 19                                             | (120)                                              | -                                 | (3,409)                | 2,957                                            | 43,359                   | 46,316          |
| As of December 31, 2023                                                          | 30,330           | 16,999           | (78,331)           | 724,695              | 269                                           | (47,788)                                                                    | 3,667                   | 703                                            | (61,342)                                           | 8,895                             | -                      | 598,097                                          | 728,221                  | 1,326,318       |

<span id="page-12-0"></span>

|                                                                                                       | Six<br>months<br>ended<br>June 30<br>2024 | Six<br>months<br>ended<br>June 30<br>2023 | Three<br>months<br>ended<br>June 30<br>2024 | Three<br>months<br>ended<br>June 30<br>2023 | Year ended<br>December 31<br>2023 |
|-------------------------------------------------------------------------------------------------------|-------------------------------------------|-------------------------------------------|---------------------------------------------|---------------------------------------------|-----------------------------------|
| Section                                                                                               | Unaudited                                 | Unaudited                                 | Unaudited                                   | Unaudited                                   | Audited                           |
| Cash flows from operating activities:                                                                 |                                           |                                           |                                             |                                             |                                   |
| Loss                                                                                                  | (32,682)                                  | (45,636)                                  | (21,412)                                    | (47,580)                                    | (135,945)                         |
| Adjustments required in order to present<br>the cash flows from operating activities<br>(Appendix A') | 12,487                                    | (10,903)                                  | (884)                                       | 83,925                                      | 310,727                           |
| Net cash generated by (absorbed) by<br>operating activities (before<br>acquisition of land)           | (20,195)                                  | (56,539)                                  | (22,296)                                    | 36,345                                      | 174,782                           |
| Acquisition of land *)                                                                                | (45,376)                                  | (51,986)                                  | (40,267)                                    | -                                           | (58,400)                          |
| Net cash (generated) absorbed by                                                                      |                                           |                                           |                                             |                                             |                                   |
| operating activities                                                                                  | (65,571)                                  | (108,525)                                 | (62,563)                                    | 36,345                                      | 116,382                           |
| Cash flows from investment activities:                                                                |                                           |                                           |                                             |                                             |                                   |
| Acquisition of fixed assets and intangible                                                            |                                           |                                           |                                             |                                             |                                   |
| assets                                                                                                | (113,568)                                 | (123,860)                                 | (71,914)                                    | (73,948)                                    | (265,865)                         |
| Investment in investment property                                                                     | (846)                                     | (909)                                     | (375)                                       | (473)                                       | (2,138)                           |
| Newly consolidated subsidiaries and<br>activities (Appendix B')                                       | (2,814)                                   | -                                         | (2,814)                                     | -                                           | -                                 |
| Consideration from the disposal of an                                                                 |                                           |                                           |                                             |                                             |                                   |
| investment in a previously consolidated                                                               |                                           |                                           |                                             |                                             |                                   |
| partnership (Appendix C')                                                                             | -                                         | (190)                                     | -                                           | (190)                                       | (190)                             |
| Change in investment in and loans to<br>investee companies, net                                       | (23,873)                                  | (52,707)                                  | (3,963)                                     | (14,400)                                    | (76,554)                          |
| Consideration from )purchase of) short<br>term investments, net                                       | (67,343)                                  | (20,239)                                  | (7,627)                                     | (6,957)                                     | 14,083                            |
| Consideration from the disposal of fixed                                                              |                                           |                                           |                                             |                                             |                                   |
| assets, investment property and other<br>investments                                                  | 12,193                                    | 12,930                                    | 1,562                                       | 10,350                                      | 19,965                            |
| Decrease (increase) in long-term loans<br>and deposits                                                | 5,355                                     | (15,763)                                  | 6,134                                       | (11,260)                                    | (19,172)                          |
| Net cash absorbed by investment<br>activities                                                         | (190,896)                                 | (200,738)                                 | (78,997)                                    | (96,878)                                    | (329,871)                         |
|                                                                                                       |                                           |                                           |                                             |                                             |                                   |
| Cash flows from financing activities:                                                                 |                                           |                                           |                                             |                                             |                                   |
| Dividend paid to shareholders in the                                                                  |                                           |                                           |                                             |                                             |                                   |
| company                                                                                               | (7,981)                                   | (13,301)                                  | (7,981)                                     | (13,301)                                    | (18,622)                          |
| Dividend to non-controlling interests                                                                 | (12,502)                                  | (16,608)                                  | (11,543)                                    | (10,520)                                    | (28,146)                          |
| Issuance of bonds                                                                                     | 226,880                                   | 122,860                                   | 72,545                                      | 1,511                                       | 195,599                           |
| Repayment of long-term liabilities<br>Repayment of leasing liabilities                                | (156,997)<br>(54,441)                     | (112,349)<br>(47,982)                     | (75,253)<br>(25,004)                        | (58,824)<br>(23,154)                        | (233,354)<br>(98,628)             |
| Receipt of long-term liabilities                                                                      | 134,239                                   | 147,246                                   | 96,950                                      | 41,024                                      | 277,026                           |
| Short-term bank credit, net                                                                           | 22,301                                    | 95,279                                    | 76,817                                      | 64,250                                      | 20,891                            |
| Exercise of option warrants issuance of                                                               |                                           |                                           |                                             |                                             |                                   |
| capital/sale of shares to non-controlling<br>interests                                                | 33,150                                    | 22,296                                    | (16,195)                                    | 10,922                                      | 65,384                            |
| Purchase of treasury shares in the                                                                    |                                           |                                           |                                             |                                             |                                   |
| company and in consolidated<br>companies                                                              | (7,789)                                   | (4,295)                                   | (3,071)                                     | (2,863)                                     | (13,936)                          |
| Net cash generated by financing<br>activities                                                         | 176,860                                   | 193,146                                   | 107,265                                     | 9,045                                       | 166,214                           |
| Translation differences in respect of                                                                 |                                           |                                           |                                             |                                             |                                   |
| cash and cash equivalents balances                                                                    | (1,061)                                   | 989                                       | 524                                         | (811)                                       | 733                               |
| Decrease in cash and cash equivalents                                                                 | (80,668)                                  | (115,128)                                 | (33,771)                                    | (52,299)                                    | (46,542)                          |
| Balance of cash and cash equivalents at<br>the beginning of the period                                | 306,010                                   | 352,552                                   | 259,113                                     | 289,723                                     | 352,552                           |
| Balance of cash and cash equivalents at                                                               |                                           |                                           |                                             |                                             |                                   |
| the end of the period                                                                                 | 225,342                                   | 237,424                                   | 225,342                                     | 237,424                                     | 306,010                           |

\*) The acquisition of and investment in land are presented under inventories of real estate.

### **CONSOLIDATED INFORMATION OF CASH FLOWS CONVENIENCE TRANSLATION INTO US DOLLARS (in thousands)**

### **Appendix A' - Adjustments required in order to present the cash flows from operating activities:**

|                                                                                           | Six<br>months<br>ended<br>June 30<br>2024 | Six<br>months<br>ended<br>June 30<br>2023 | Three<br>months<br>ended<br>June 30<br>2024 | Three<br>months<br>ended<br>June 30<br>2023 | Year ended<br>December 31<br>2023 |
|-------------------------------------------------------------------------------------------|-------------------------------------------|-------------------------------------------|---------------------------------------------|---------------------------------------------|-----------------------------------|
| Section                                                                                   | Unaudited                                 | Unaudited                                 | Unaudited                                   | Unaudited                                   | Audited                           |
| Income and expenses not involving cash<br>flows:                                          |                                           |                                           |                                             |                                             |                                   |
| The Group's share of the (profits) losses<br>of companies accounted for at equity,<br>net | 27,773                                    | (19,809)                                  | 20,602                                      | (12,872)                                    | (8,967)                           |
| Dividends, success fee and interest<br>received from companies accounted for<br>at equity | 4,067                                     | 4,466                                     | 1,930                                       | 2,334                                       | 10,920                            |
| Success fee (Promote)                                                                     | 27,709                                    | 15,338                                    | 14,902                                      | 19,032                                      | 67,921                            |
| Realization of reserve on translation<br>differences on foreign operations                | 978                                       | -                                         | -                                           | -                                           | -                                 |
| Adjustments of the fair value of<br>investment property, net                              | 403                                       | 188                                       | 174                                         | 92                                          | 1,891                             |
| Depreciation and amortization                                                             | 116,806                                   | 110,673                                   | 58,711                                      | 56,835                                      | 236,044                           |
| Impairment in the intangible assets and<br>goodwill                                       | -                                         | -                                         | -                                           | -                                           | 37,706                            |
| Impairment in the investment in a<br>company accounted for<br>at equity                   | 17,200                                    | 35,230                                    | 6,934                                       | 26,728                                      | 35,230                            |
| Deferred taxes, net                                                                       | (26,913)                                  | (2,043)                                   | (14,161)                                    | (1,867)                                     | (21,349)                          |
| Change in employee benefit liabilities                                                    | 54                                        | (138)                                     | 18                                          | (253)                                       | (1,100)                           |
| Capital gain on the sale of fixed assets<br>and other investments                         | (4,775)                                   | (10,611)                                  | (697)                                       | (10,280)                                    | (9,616)                           |
| Gain on the disposal of previously<br>consolidated companies                              | -                                         | -                                         | -                                           | -                                           | (1,154)                           |
| Gain on decrease in the holding rate in a<br>company accounted for at equity              | (2,686)                                   | -                                         | (1,979)                                     | -                                           | (3,410)                           |
| Revaluation of long-term receivables and<br>liabilities, net                              | (9,477)                                   | (4,242)                                   | (5,932)                                     | (2,882)                                     | (13,221)                          |
| Increase in value of short-term<br>investments                                            | 53                                        | -                                         | 514                                         | 271                                         | (806)                             |
| Cost of share-based payments                                                              | 3,790                                     | 4,300                                     | 1,915                                       | 2,293                                       | 8,687                             |
| Changes in asset and liability items:                                                     |                                           |                                           |                                             |                                             |                                   |
| Increase in inventory and inventory of<br>land (before acquisition of land)               | (62,497)                                  | (59,369)                                  | (29,553)                                    | (28,401)                                    | (51,667)                          |
| Increase in trade receivables                                                             | (86,122)                                  | (56,279)                                  | (23,228)                                    | (1,794)                                     | (53,600)                          |
| Increase in other accounts receivable                                                     | (73,202)                                  | (87,247)                                  | (18,573)                                    | (14,521)                                    | (31,190)                          |
| Increase in suppliers and providers of<br>services                                        | 72,716                                    | 51,010                                    | 19,880                                      | 14,245                                      | 67,649                            |
| Increase (decrease) in other accounts<br>payable                                          | 6,610                                     | 7,630                                     | (32,341)                                    | 34,965                                      | 40,759                            |
|                                                                                           | 12,487                                    | (10,903)                                  | (884)                                       | 83,925                                      | 310,727                           |

### **Appendix B' - Acquisition of initially consolidated subsidiaries**

|                                                            | Six<br>months<br>ended<br>June 30<br>2024 | Six<br>months<br>ended<br>June 30<br>2023 | Three<br>months<br>ended<br>June 30<br>2024 | Three<br>months<br>ended<br>June 30<br>2023 | Year ended<br>December 31<br>2023 |
|------------------------------------------------------------|-------------------------------------------|-------------------------------------------|---------------------------------------------|---------------------------------------------|-----------------------------------|
| Section                                                    | Unaudited                                 | Unaudited                                 | Unaudited                                   | Unaudited                                   | Audited                           |
| Working capital, net (except cash<br>and cash equivalents) | 4,027                                     | -                                         | 4,027                                       | -                                           | 11,864                            |
| Fixed assets                                               | (717)                                     | -                                         | (717)                                       | -                                           | (1,604)                           |
| Right-of-use assets                                        | (1,217)                                   | -                                         | (1,217)                                     | -                                           | 4,107                             |
| Intangible assets                                          | (1,181)                                   |                                           | (1,181)                                     |                                             | -                                 |
| Goodwill                                                   | (3,732)                                   | -                                         | (3,732)                                     | -                                           | (16,650)                          |
| Other non-current assets                                   | (89)                                      |                                           | (89)                                        |                                             | -                                 |
| Deferred taxes                                             | (668)                                     |                                           | (668)                                       |                                             | -                                 |
| Other non-current liabilities                              | 813                                       | -                                         | 813                                         | -                                           | 1,458                             |
| Non-controlling interests                                  | (50)                                      | -                                         | (50)                                        | -                                           | 825                               |
|                                                            | (2,814)                                   | -                                         | (2,814)                                     | -                                           | -                                 |

### **Appendix C' - Consideration from the disposal of an investment in a previously consolidated partnership**

|                                                                                    | Six<br>months<br>ended<br>June 30<br>2024 | Six<br>months<br>ended<br>June 30<br>2023 | Three<br>months<br>ended<br>June 30<br>2024 | Three<br>months<br>ended<br>June 30<br>2023 | Year ended<br>December 31<br>2023 |
|------------------------------------------------------------------------------------|-------------------------------------------|-------------------------------------------|---------------------------------------------|---------------------------------------------|-----------------------------------|
| Section                                                                            | Unaudited                                 | Unaudited                                 | Unaudited                                   | Unaudited                                   | Audited                           |
| Working capital, net (except cash)                                                 | -                                         | 549                                       | -                                           | 549                                         | 549                               |
| Fixed assets                                                                       | -                                         | 117                                       | -                                           | 117                                         | 117                               |
| Goodwill                                                                           | -                                         | 2,627                                     | -                                           | 2,627                                       | 2,627                             |
| Other long -<br>term liabilities                                                   | -                                         | (1,809)                                   | -                                           | (1,809)                                     | (1,809)                           |
| Investment in company accounted<br>for at equity                                   | -                                         | (3,560)                                   | -                                           | (3,560)                                     | (3,560)                           |
| Non-controlling interests                                                          | -                                         | 732                                       | -                                           | 732                                         | 732                               |
| Capital gain on decrease in control in<br>a previously consolidated<br>partnership | -                                         | 1,154                                     | -                                           | 1,154                                       | 1,154                             |
|                                                                                    | -                                         | (190)                                     | -                                           | (190)                                       | (190)                             |

## **CONSOLIDATED INFORMATION OF CASH FLOWS CONVENIENCE TRANSLATION INTO US DOLLARS (in thousands) Appendix D' - Further information on cash flows**

|                              | Six<br>months<br>ended<br>June 30<br>2024 | Six<br>months<br>ended<br>June 30<br>2023 | Three<br>months<br>ended<br>June 30<br>2024 | Three<br>months<br>ended<br>June 30<br>2023 | Year ended<br>December 31<br>2023 |
|------------------------------|-------------------------------------------|-------------------------------------------|---------------------------------------------|---------------------------------------------|-----------------------------------|
| Section                      | Unaudited                                 | Unaudited                                 | Unaudited                                   | Unaudited                                   | Audited                           |
| Cash paid in the period for: |                                           |                                           |                                             |                                             |                                   |
| Interest                     | 75,823                                    | 64,595                                    | 39,222                                      | 35,419                                      | 138,907                           |
| Taxes on income              | 29,434                                    | 26,266                                    | 14,222                                      | 9,953                                       | 43,404                            |
| Cash received for:           |                                           |                                           |                                             |                                             |                                   |
| Interest                     | 6,618                                     | 15,742                                    | 2,805                                       | 5,670                                       | 20,523                            |
| Taxes on income              | 11,800                                    | 7,951                                     | 489                                         | 5,211                                       | 10,317                            |

#### **Appendix E' – Significant activities not involving cash flows**

|                                                                                                           | Six<br>months<br>ended<br>June 30<br>2024 | Six<br>months<br>ended<br>June 30<br>2023 | Three<br>months<br>ended<br>June 30<br>2024 | Three<br>months<br>ended<br>June 30<br>2023 | Year ended<br>December 31<br>2023 |
|-----------------------------------------------------------------------------------------------------------|-------------------------------------------|-------------------------------------------|---------------------------------------------|---------------------------------------------|-----------------------------------|
| Section                                                                                                   | Unaudited                                 | Unaudited                                 | Unaudited                                   | Unaudited                                   | Audited                           |
| Acquisition of fixed assets<br>and<br>other<br>assets                                                     | 9,700                                     | 33,913                                    | 3,127                                       | 33,913                                      | 10,984                            |
| Increase of right -<br>of -<br>use asset<br>against leasing liability                                     | 217,807                                   | 39,264                                    | 40,836                                      | 18,445                                      | 73,508                            |
| Liability for the acquisition of<br>holdings of non-controlling<br>interests in a consolidated<br>company | -                                         | -                                         | -                                           | -                                           | 31,580                            |
| Deferred consideration for a business<br>combination                                                      | -                                         | -                                         | -                                           | -                                           | 14,413                            |

# <span id="page-16-0"></span>**NOTES TO THE INTERIM CONSOLIDATED FINANCIAL INFORMATION**

### **Note 1 - General**

The accompanying Financial Information, is derived from the Hebrew version of the Company's interim consolidated financial statement as of June 30, 2024 and for the periods of six months and three months ended on that date and do not include the disclosures required by International Financial Reporting Standards (IFRS) (hereinafter - The Interim Consolidate Financial Information).

The interim consolidated financial information should be read together with the Company's Hebrew version of the annual consolidated financial statement as at December 31, 2023 and for the year ended on that date and the accompanying notes thereto (hereinafter – The Annual Consolidated Financial Statement).

The interim consolidated financial information is a translation which is based on The Interim Consolidated Financial Statements, which have been prepared in accordance with International Financial Reporting Standard IAS 34 "Financial Reporting for Interim Periods", and also in accordance with the disclosure requirements in accordance with section D of the Securities Regulations (Periodic and Immediate Reports) - 1970.

### **Note 2 - General description of the Company and its activities**

Elco Ltd. (hereinafter - The Company), was incorporated in Israel in the year 1949 and its shares are traded on the Stock Exchange in Israel.

As of the date of the financial information the Group operates, in Israel and abroad, in segments in accordance with its investee companies, as follow:

| electricity and piping, construction, the supervision and   | infrastructures in Israel and abroad, which includes: the     |
|-------------------------------------------------------------|---------------------------------------------------------------|
| management of real estate, entrepreneurial real estate      | instillation and provision of service for central air         |
| activity, the management and the maintenance of assets, the | conditioning systems, elevators, sanitation, infrastructures, |
| public transportation field and the                         | the execution and construction of national infrastructure     |
| shuttle services field.                                     | facilities, integrated security and protection solutions,     |

**Electra Consumer Products-** Operates in Israel in the importing, manufacturing, exporting, marketing, sale and distribution of electrical consumer products and in the provision of services for products, in the operation of retail marketing chains for the sale of electrical products, in the operation in the food retail field and in the field of investment property.

### **NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS**

### **Note 2 - General description of the Company and its activities** (Continue)

| Electra Real Estate<br>- | Operates in the field of the purchase, management and<br>enhancement of housing complexes for rental in the South<br>Eastern United States, which are held directly by a<br>subsidiary company and by funds that invest in housing<br>complexes in the United States, and though funds<br>which<br>raises debt and provides loans and instruments for the<br>supplementation of shareholders' equity for investments in<br>housing complexes and in special purpose partnerships for<br>investment in single family residences on plots of land for<br>rental (SFR) and in a REIT partnership for investment in<br>hotels in the U.S.A and in fund<br>that invests in office space<br>in Great Britain and two reserves of land that are designated<br>primarily for the development of residential complexes for<br>rental in Southern Miami. |
|--------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Electra Power<br>-       | Operates in the marketing, sale and distribution of LPG and<br>LPG consuming products, in marketing and sale of Natural<br>gas, electricity and thermal energy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

**Others -** Relates primarily to the operations of DIC and Dream Group.

### **Note 3 - Convenience translation**

The Interim Consolidate Financial Information in US Dollars is a translation of the statements as prepared in New Israeli Shekels ("NIS" or "Shekel") at the rate of exchange of the Shekel for the US Dollar prevailing on June 30, 2024 (NIS 3.759 = US\$ 1).

It should be noted that the New Israeli Shekel amounts, on the basis of which the convenience translation figures were prepared, do not necessarily represent the current cost amounts of the various elements within The Interim Consolidate Financial Statements and, also, that it should not be construed from the translation into US Dollar figures that the Israeli currency amounts actually represent, or could be converted into Dollars. This financial information has been prepared for the convenience of the reader. In the event of any discrepancy between the contents of this translation and the Hebrew original, the Hebrew original prevails.

א - 40 / דוח אלקו אנגלית יוני .2024docx