Mivtach Shamir Holdings Ltd.

Interim / Quarterly Report • Aug 27, 2025

MRC Alon Tavor Power Ltd.

Condensed Consolidated Statements As at June 30, 2025

Consolidated statements of interim financial position

Contents

	Page
Consolidated Interim Financial Statements
Review report on the Consolidated Interim financial statements	3
Consolidated statements of interim financial position	4
Consolidated interim income statements	5
Consolidated interim statements of changes in equity	6
Consolidated interim statements of cash flows	8
Notes to the Consolidated Interim financial statements	9

Somekh Chaikin KPMG Millennium Tower 17 Ha'arba'a Street, PO Box 609 Tel Aviv 61006, Israel +972 3 684 8000

Review Report to the Shareholders of MRC Alon Tavor Power Ltd.

Introduction

We have reviewed the accompanying financial information of MRC Alon Tavor Power Ltd ("the Company") comprising of the condensed consolidated interim statement of financial position as of June 30, 2025 and the condensed consolidated income statement, statement of changes in equity and statement of cash flows for the six and three month period then ended. The Board of Directors and Management are responsible for the preparation and presentation of this interim financial information in accordance with IAS 34 "Interim Financial Reporting".

Scope of Review

We conducted our review in accordance with Standard on Review Engagements (Israel) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" of the Institute of Certified Public Accountants in Israel. 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.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying financial information was not prepared, in all material respects, in accordance with IAS 34.

Somekh Chaikin Certified Public Accountants (Isr.)

August 12, 2025

Somekh Chaikin, an Israeli partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.

Consolidated statements of interim financial position

	June 30	June 30	December 31
	2025 (Unaudited)	2024 (Unaudited)	2024 (Audited)
	NIS thousands	NIS thousands	NIS thousands
Current assets
Cash and cash equivalents	62,708	177,871	162,852
Trade receivables	145,382	55,482	43,286
Other receivables	14,965	47,715	30,518
Derivative instruments	2,631	16,875	280
Total current assets	225,686	297,943	236,936
Non-current assets
Pledged deposits	24,646	30,176	29,667
Inventory	34,508	40,277	39,960
Derivative instruments Fixed assets	- 2,314,696	14,242 1,963,616	- 2,289,644
Intangible assets	288,341	318,884	303,509
Total non-current assets	2,662,191	2,367,195	2,662,780
Total assets	2,887,877	2,665,138	2,899,716
Current liabilities
Loans and borrowings	244,358	243,882	228,002
Trade payables	35,974	51,593	24,036
Other payables	203,392	30,158	359,626
Derivative instruments	13,229	-	4,829
Total current liabilities	496,953	325,633	616,493
Non-current liabilities
Liabilities to banks	1,608,025	1,595,824	1,486,902
Other long-term payables	11,876	4,233	7,067
Derivative instruments	19,655	-	55,335
Deferred tax liabilities	179,871	157,904	175,839
Total non-current liabilities	1,819,427	1,757,961	1,725,143
Total liabilities	2,316,380	2,083,594	2,341,636
Equity
Share capital	*	*	*
Share premium	163,000	163,000	163,000
Retained earnings	408,497	418,544	395,080
Total equity	571,497	581,544	558,080
Total liabilities and equity	2,887,877	2,665,138	2,899,716
* Less than one thousand NIS .

Erez Balasha,	Elad Cohen,	Eliran Levy,
Chairman of the Board of	CEO	CFO
Directors

Date of approval of the financial statements: August 12, 2025

The accompanying notes are an integral part of these Consolidated financial statements.

Consolidated Interim Income Statements

	For the six months ended June 30 2025 (Unaudited) NIS thousands	For the six months ended June 30 2024 (Unaudited) NIS thousands	For the three months ended June 30 2025 (Unaudited) NIS thousands	For the three months ended June 30 2024 (Unaudited) NIS thousands	For the year ended December 31 2024 (Audited) NIS thousands
Revenues	348,949	276,616	182,466	84,510	646,145
Other income	92	2,546	49	1,374	2,628
Total Revenues	349,041	279,162	182,515	85,884	648,773
Production &
maintenance expenses Salaries and	(207,506)	)153,857(	)113,401 (	)56,510(	(334,673)
subcontractors' expenses Administrative and IT	(20,043)	)13,506(	)7,171 (	)7,750(	(29,207)
expenses	(1,459)	)931(	)475 (	)460(	(1,749)
	(229,008)	)168,294(	)121,047 (	)65,020(	(365,629)
Operating profit before depreciation and amortization	120,033	110,868	61,468	20,864	283,144
Depreciation and amortization	(54,958)	)42,157(	(27,651)	)22,478(	(98,077)
Operating profit (loss)	65,075	68,711	33,817	(1,614)	185,067
Financing income	43,955	21,238	21,961	23,504	82,001
Financing expenses	(91,505)	)29,317(	)75,779(	(25,977)	(128,465)
Financing expenses, net	(47,550)	)8,079(	(53,818)	)2,473(	(46,464)
Profit (loss) before taxes
on income	17,525	60,632	(20,001)	(4,087)	138,603
Tax expenses	(4,108)	)14,014(	4,601	941	(31,949)
Profit (loss) for the period	13,417	46,618	(15,400)	(3,146)	106,654

The accompanying notes are an integral part of these Consolidated interim financial statements.

Consolidated Interim Statements of Changes in Equity

For the six months ended June 30, 2025 (unaudited)	Share Capital (Unaudited) NIS thousands	Share premium (Unaudited) NIS thousands	Retained earnings (Unaudited) NIS thousands	Total (Unaudited) NIS thousands
Balance as at January 1, 2025	*	163,000	395,080	558,080
Profit for the period	-	-	13,417	13,417
Balance as at June 30, 2025	*	163,000	408,497	571,497
For the six months ended June 30, 2024 (unaudited)	Share Capital (Unaudited) NIS thousands	Share premium (Unaudited) NIS thousands	Retained earnings (Unaudited) NIS thousands	Total (Unaudited) NIS thousands
Balance as at January 1, 2024	*	163,000	376,726	539,726
Dividends to owners	-	-	(4,800)	(4,800)
Profit for the period	-	-	46,618	46,618
Balance as at June 30, 2024	*	163,000	418,544	581,544
For the three months ended June 30, 2025 (unaudited)	Share Capital (Unaudited) NIS thousands	Share premium (Unaudited) NIS thousands	Retained earnings (Unaudited) NIS thousands	Total (Unaudited) NIS thousands
Balance as at April 1, 2025	*	163,000	423,897	586,897
Loss for the period	-	-	(15,400)	(15,400)

Balance as at June 30, 2025 * 163,000 408,497 571,497

* Less than one thousand NIS.

The accompanying notes are an integral part of these Consolidated interim financial statements.

Consolidated Interim Statements of Changes in Equity

For the three months ended June 30, 2024 (unaudited)	Share Capital (Unaudited) NIS thousands	Share premium (Unaudited) NIS thousands	Retained earnings (Unaudited) NIS thousands	Total (Unaudited) NIS thousands
Balance as at April 1, 2024	*	163,000	421,690	584,690
Loss for the period	-	-	(3,146)	(3,146)
Balance as at June 30, 2024	*	163,000	418,544	581,544
For the year ended December 31, 2024 (audited)	Share Capital (Audited) NIS thousands	Share premium (Audited) NIS thousands	Retained earnings (Audited) NIS thousands	Total (Audited) NIS thousands
Balance as at January 1, 2024	-	163,000	376,726	539,726
Dividends to owners	-	-	(88,300)	(88,300)
Profit for the year	-	-	106,654	106,654
Balance as at December 31, 2024	-	163,000	395,080	558,080

* Less than one thousand NIS.

The accompanying notes are an integral part of these Consolidated interim financial statements .

Consolidated interim statements of cash flows

	For the six months ended June 30 2025	For the six months ended June 30 2024	For the three months ended June 30 2025	For the three months ended June 30 2024	For the year ended December 31 2024
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Audited)
	NIS thousands	NIS thousands	NIS thousands	NIS thousands	NIS thousands
Cash flows from operating activities Profit (loss) for the period Adjustments for:	13,417	46,618	(15,400)	(3,669)	106,654
Depreciation	39,791	26,947	20,026	14,873	67,492
Amortization of intangible assets	15,168	15,210	7,626	7,605	30,585
Change in fair value of derivatives	(18,861)	(16,742)	65,332	(22,594)	69,759
Realization of economic derivative	)1,396(	2,907	)1,669(	2,066	3,351
Financing expenses	67,135	26,008	(11,734)	25,635	(24,121)
Income tax	4,108	14,014	(4,601)	(941)	31,949
Change in inventory	5,452	1,587	5,570	(1,840)	1,904
Change in trade and other receivables	(86,543)	24,799	(2,644)	48,838	54,192
Change in trade and other payables	(109,346)	3,019	(129,162)	17,636	(24,304)
Income taxes paid	)78(	(70)	-	-	(70)
Net cash from (used in) operating
activities	(71,153)	144,297	(66,656)	88,138	317,391
Cash flows from investing activities
Decrease (Increase) in pledged deposits	5,021	12,514	(161)	(359)	13,023
Interest received	1,910	-	1,042	-	3,575
Realization of economic derivative	(9,374)	20,790	(7,669)	3,711	24,846
Acquisition of fixed assets	(47,072)	(173,573)	(10,482)	(41,144)	(221,717)
Net cash used in investing activities	(49,515)	(140,263)	(17,270)	(37,792)	(180,273)
Cash flows from financing activities
Interest paid	(26,395)	(18,275)	(13,504)	(9,182)	(35,875)
Repayment of bank loans	(72,973)	(68,212)	(38,074)	(37,871)	)144,986(
Payment of principal of lease liabilities	)165(	(165)	)83(	(83)	(329)
Dividends paid	)30,000(	(4,800)	-	-	(58,300)
Loans received from banks	150,000	183,000	150,000	-	183,000
Net cash from (used in) financing
activities	20,467	91,548	98,339	(47,136)	(56,490)
Net increase (decrease) in cash and cash equivalents	(100,201)	95,582	14,413	3,210	80,628
Cash and cash equivalents at the beginning of the period	162,852	82,439	48,023	174,862	82,439
Effect of exchange rate fluctuations on cash and cash equivalents	57	(150)	272	(201)	(215)
Cash and cash equivalents at the end of the period	62,708	177,871	62,708	177,871	162,852

Note 1 - General

A. Reporting entity

MRC Alon Tavor Power Ltd. (the "Company"), is an Israeli resident private company incorporated on May 7, 2019. The Company has purchased the Alon Tavor Power Plant Site (the "Alon Tavor Site") in accordance with a tender published by the Israeli Electricity Company ("IEC") and its primary objective is to operate Alon Tavor Site. The Company initiated its operation in December, 2019. The Shareholders and their interest in the Company are as follows: (1) Mivtach Shamir Holdings Ltd

33.3%; (2) China Harbor Engineering Company Ltd., 33.3%; and (3) Generation Rapac Holdings MRC General Partnership 33.3%. Additional 0. 1% of the Company's shares is dormant shares held by the Company.

The Company is the sole limited partner of MRC A.T Power Development Limited Partnership (the "Peaker Partnership") and the sole shareholder (100%) of M.R.C Alon Tavor Energy 1 General Partner Ltd, the general partner of the Peaker Partnership. The financial standings of the Peaker Partnership have been consolidated with the financial standings of the company.

B. Material events in the reporting period

)1) Iron Swords War

On October 7, 2023, the State of Israel declared war against the murderous terrorist organization Hamas operating from the Gaza Strip. Subsequently, during 2024 and 2025, military operations were also conducted against the terrorist organization Hezbollah in Lebanon, as well as against targets in Iran during second quarter of 2025 (the "War").

Existing Generating Units' production

As of the date of these financial statements, the War has no direct effect on the current electricity production activity of Alon Tavor Site. During 2023, Alon Tavor Site's emergency preparations were completed, including preparations to operate the Combined Cycle Unit with back-up fuel (diesel fuel oil) and maintaining the required emergency and backup quantities of back-up fuel, as required by applicable law and regulations. Also, there is no effect on the manpower that operates and maintains Alon Tavor Site, since in light of the definition of the Alon Tavor Site as an "Essential Plant" according to applicable law, Alon Tavor Site serves as the reserve unit of the operation and maintenance personnel.

The Group's management continues to analyze and monitor the effects of the War on the operation of Alon Tavor Site daily.

Notes to the Condensed Interim Financial Statements

Note 1 – General (cont'd)

B. Material events in the reporting period (cont'd)

(1) Iron Swords War (cont'd)

Peaker Project

The construction of the Peaker Project has been adversely affected on several occasions due to the ongoing state of war declared by the Government of Israel, the significant security events and hostilities along the northern border, as well as the recent conflict with Iran. Periodic updates and requests for recognition of these security-related events as force majeure were submitted to the Electricity Authority, following multiple instances in which the construction works were suspended due to instructions given to foreign experts of the EPC Contractor and subcontractors to leave Israel until the situation stabilized.

The suspension of works and the various limitations imposed on the Israeli economy during the months of conflict — including disruptions to shipping and imports, the mobilization of personnel for reserve military service, and the inability to bring or retain the necessary experts in Israel — have had, and continue to have, a direct impact on the project timeline, resulting in a material delay in the construction and commercial operation of the project.

As of the date of these Financial Statements, construction activities have resumed at the site, and the commissioning process is currently underway. The Company anticipates the project will be completed during Q3 2025.

)2) Regulatory Hearings

Following a hearing process held by the Electricity Authority, On February 12, 2025, the EA published its decision with respect to caps to be applied on the supplementary tariffs set in Standard ('Amat Mida') 106F.

In accordance with the Electricity Authority's decision, the Company may choose between two alternatives with respect to the Caps on the supplementary tariffs that will apply to it: (a) a factor of 1.4 on the gas price; or (b) a factor of 1.6 on the gas price , retroactive as of the Power Plant's acquisition.

As of the date of these financial Statements, the electricity authority published a decision to postpone the final date for choosing between the two above mentioned options to December 31, 2025.

MRC Group is currently holding discussions with the Electricity Authority and Noga regarding the implementation of the decision and receiving several clarifications regarding it and its implications for the Company, while evaluating various courses of action, including legal steps such as appealing to the relevant courts or authorities, in relation to the decision and its implementation by the Electricity Authority and Noga

In parallel, on August 27, 2024, Noga has published principles for the wholesale price (SMP) update mechanism, which is planned to be applied in the second half of 2025.

The Company has submitted a comprehensive response to the document on November 12, 2024.

Based on the Group's assessments with respect to the EA's decision and Noga's abovementioned document, no material effect on the Group's current financial statements is expected.

Note 1 – General (cont'd)

B. Material events in the reporting period (cont'd)

(3) Dividends

Following a dividend declaration made in 2024, the Company distributed NIS 30 million in January 2025.

Note 2 - Basis of Preparation

A. Statement of compliance

The condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and do not include all of the information required for full annual financial statements. They should be read in conjunction with the financial statements as at and for the year ended December 31, 2024.

The condensed consolidated interim financial statements were authorized for issue by the Company's Board of Directors on August 12, 2025.

B. Use of estimates and judgments

The preparation of financial statements in conformity with IFRSs requires management to exercise judgment when making assessments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The significant judgments made by management in applying the Company's accounting policies and the principal assumptions used in the estimation of uncertainty were the same as those that applied to the annual financial statements.

Note 3 - Significant Accounting Policies

A. Accounting policies consistency

The accounting policies applied by the Company in these condensed consolidated interim financial statements are the same as those applied by the Company in its annual financial statements.

Note 4 – Seasonality

The demand for electricity is seasonal and is influenced, among other things, by the climate that prevails during that season. The months of the year are divided into three periods as follows: Summer season - June to September; Winter season - December, January and February; And transitional seasons - (spring and autumn), from March to June and from September to November. The electricity demand is higher in the winter and the summer, the average electricity consumption during these seasons is higher than in the transitional season and is, moreover, even characterized by peak days demand due to extreme cold or hot climatic conditions.

Notes to the Condensed Interim Financial Statements

Note 5 - Related and Interested Parties

A. Transactions with related and interested parties

	Transaction value
	For the six months ended June 30, 2025	For the six months ended June 30, 2024	For the three months ended June 30, 2025	For the three months ended June 30, 2024	For the year ended December 31, 2024
	(Unaudited) (Audited)
	NIS thousands
Revenues and expenses
Natural gas sales to (Purchases from)
Company's Shareholder	)1,370(	86	-	-	86
O&M services expenses to entity held by the same shareholders	32,111	25,000	13,482	11,396	46,236

B. Balances with related and interested parties

	Balance in the statement of financial position
	June 30		December 31
	2025	2024	2024 (Audited)
	(Unaudited)	(Unaudited)
	NIS thousands	NIS thousands	NIS thousands
Current assets Other receivables - Entity held by the same shareholders	5,210	6,918	5,698
Current liabilities
Trade payables - Entity held by the same shareholders	7,377	6,107	6,253

Notes to the Condensed Interim Financial Statements

Note 6 - Financial Instruments

(1) Financial instruments measured at fair value for disclosure purposes only

The carrying amounts of certain financial assets and liabilities, including cash, trade receivables, other receivables, deposits, derivatives, short-term loans and borrowings, shareholders loans, trade payables, other payables and lease liabilities are the same or proximate to their fair value.

The fair value of the Long-term bank loans including current maturities, together with the carrying amounts shown in the statement of financial position, are as follows:

	June 30, 2025	June 30, 2024	December 31, 2024
		NIS thousands
Fair Value	1,599,894	1,686,832	1,478,451
Carrying amount *	1,766,873	1,760,777	1,632,728

* Including current maturities.

(2) Fair value hierarchy of financial instruments measured at fair value

The table below presents an analysis of financial instruments measured at fair value on the temporal basis using valuation methodology in accordance with the fair value hierarchy levels (for a definition of the various hierarchy levels, see Note 2 in the annual financial statements regarding the basis of preparation of the financial statements).

	June 30, 2025	June 30, 2024	December 31, 2024	Fair Value
	NIS thousands	NIS thousands	NIS thousands	Level
Financial assets (liabilities) measured at fair value through profit or loss:
Economic hedging derivatives	)13,229(	11,407	(816)	Level 2
Embedded derivative	)17,024(	19,710	(59,068)	Level 2
Cash-settled share-based payment
arrangements	)10,626(	)2,703 (	(5,674)	Level 3

Note 6 - Financial Instruments (Cont'd)

	Valuation method for	Significant	Interrelationships between significant unobservable inputs and fair
Financial instrument	determining fair value	unobservable inputs	value measurement
Economic hedging derivatives	Fair value measured on the basis of the difference between the forward price in the contract and the current forward price for the delivery date using market interest rates appropriate for similar instruments.	Not applicable	Not applicable
Embedded derivative	Fair value measured on the basis of discounting the difference between the forward price in the contract and the current forward price for the residual period until redemption using market interest rates appropriate for similar instruments, including the adjustment required for the credit risks	Discount rate, based on the risk free rate, adjusted for a risk premium to reflect the credit risk.	The differential cash flow discounted using the calculated credit risk rate

)3( Details regarding fair value measurement at Levels 2

(4) Details regarding fair value measurement at Levels 3

Valuation method for determining fair value	Significant unobservable inputs	inputs and fair value measurement	Interrelationships Between significant unobservable
Share-based payment	The fair value of the liability is re-measured at the end of each period. Measurement inputs include the most recent Group valuation, the exercise price of the instrument, expected volatility expected term of the instruments and the risk-free interest. Service and non-market performance conditions are not taken into account in determining fair value.	Not applicable	Not applicable

Note 6 - Financial Instruments (Cont'd)

(5) Valuation processes used by the Group

The fair value of economic hedging derivatives is determined by external valuers on a regular quarterly basis. The valuations are reviewed by the Group's financial department and presented to the Group's Management for perusal.

The fair value of embedded derivative is determined by external valuers on a regular annual basis and updated internally during the year. The valuations are presented to the Group's Management for perusal. Unobservable inputs relate to the discount rate, which is based on the observable risk-free rate, adjusted for a risk premium to reflect the credit risk.

The fair value of cash-settled share-based payment arrangements is determined on a yearly basis accordance to external valuation of the Group published by its shareholders. Measurement inputs include the Group valuation on the measurement date, the exercise price of the instrument, expected volatility, expected term of the instruments and the risk-free interest. Service and non-market performance conditions are not taken into account in determining fair value.

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