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Ashtrom Group Ltd. Interim / Quarterly Report 2026
6656_rns_2026-05-27_c8c2bf02-4ad7-4ba6-a492-3936c1778168.pdf
Interim / Quarterly Report
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This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
Ashtrom Group
Ashtrom
Interim Financial Statements
For March 31, 2026
Ashtrom
Contracting
Ashtrom
Industries
Ashtrom
Properties
Ashtrom
Residential
Ashtrom
Residential for Rent
Ashtrom
Concession
Ashtrom
Renewable Energy
Ashtrom
International
This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
Ashtrom Group
Company Profile
Ashtrom Group, one of the leading construction and real estate companies in Israel, has embedded in its foundations the commitment to provide professional and comprehensive solutions to all its customers, from the ground up.
Ashtrom ensures the optimal synergy of its entire set of companies, in a way that provides a perfect envelope of solutions for every project in Israel and around the world.
Summary of data for the first quarter of 2026
| 1,122
NIS millions
Revenue | 223
NIS millions
Gross Profit | 51
NIS millions
Operating Profit | (37)
NIS millions
Net loss attributable to shareholders |
| --- | --- | --- | --- |
Gross Profit
NIS millions
Revenue
NIS millions
רווח גולמי
מיליוני ש
הכנסות
מיליוני ש
249
Q1 2025
223
Q1 2026
1,153
Q1 2025
1,122
Q1 2026
Data by Operating Segments First Quarter 2026
(in NIS millions)
Construction and Infrastructure Contracting
Industries
Residential for Rent
Concession
Ashtrom International
Renewable Energy
Ashtrom Properties
Ashtrom Residential
| Board of Directors' Report on the State of the Corporation's Affairs
Ashtrom Group Ltd.
(hereinafter: the "Company" and/or the "Group")
Board of Directors' Report on the State of the Corporation's Affairs
As of March 31, 2026
The Company's Board of Directors is pleased to submit the Board of Directors' Report on the State of the Corporation's Affairs as of March 31, 2026, and for the three-month period ended March 31, 2026 ("the reporting period"). The report reviews the main changes in the Company's activities that occurred during the reporting period and up to the date of publication of this report.
The report was prepared in accordance with the Securities Regulations (Periodic report and Immediate Reports), 5730-1970 (hereinafter: "Securities Regulations"). The financial data in this review refer to the Company's consolidated reports, prepared in accordance with IFRS standards.
1. General
The Company has eight areas of activity reported as business segments in its financial statements as of March 31, 2026. For further details, see the Company's Periodic report for 2025 published on March 25, 2026 (Reference No.: 2026-01-026780) (hereinafter: "the 2025 Periodic report"). A concise description of these areas of activity is provided below:
A. Construction and Infrastructure Contracting in Israel - The Group's activity in this field focuses on construction and infrastructure works in Israel, such as: construction works for contracting projects in the residential and non-residential sectors, serving a variety of customers from the private, public, and governmental sectors. This activity is performed by the Company itself as well as by Ashtrom Contracting through the companies held by it.
B. Industries - The Group's activity in this field mainly includes production, marketing, and sale of raw materials for the construction industry and import and marketing of finishing products for the construction industry. The Group's activity in this field is performed in Israel by Ashtrom Industries and the companies held by it.
C. Residential for Rent - The Group's activity in this field includes investment in income-generating residential real estate in Israel, i.e., initiation of housing complexes, renting out properties, and providing services related to their rental. The Group's activity in this field is performed in Israel by the Ashtrom Residential for Rent partnership and company and partnerships held by it.
D. Concession - The Group's activity in this field includes diverse concessions in Israel by way of participation in tenders and execution (financing, planning, and operation) of large national projects in the fields of infrastructure and energy. This activity is performed by the Company itself as well as by partnerships held by it.
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| Board of Directors' Report on the State of the Corporation's Affairs
e. International - The group's activities in this field focus on construction and infrastructure works abroad, including in Jamaica. The works include: construction of contracting projects in the residential and non-residential sectors for a variety of private, public, and government sector clients. Additionally, the group is primarily involved in the USA and Portugal in the field of initiation, development, and sale of both developed land (for residential construction) and housing units. Furthermore, the company carries out the initiation, construction, leasing, enhancement, and operation of buildings for both industry and offices/commerce, including in Serbia and Romania. The group's activities in this field are carried out by Ashtrom International through its held companies.
f. Renewable Energy - The group's activities in this field include investments in the initiation of renewable energy projects (solar) in the USA and Israel. The company holds an electricity supply license in Israel. The group's activities in this field are performed by Ashtrom Renewable Energy and its held companies.
g. Investment Real Estate and Initiation via Ashtrom Properties - The group's activities in the field of yielding investment real estate through Ashtrom Properties Ltd. (hereinafter: "Ashtrom Properties") include initiation, construction, leasing, enhancement, and operation of buildings for industry and offices, hotels, and commerce in Israel, Germany, and England. Ashtrom Properties also operates in the field of real estate initiation (commerce, offices, residential) as well as in logistics and storage. The above areas of activity are performed by Ashtrom Properties and its held companies.
h. Residential Real Estate Initiation in Israel via Ashtrom Residential - The group's activities in this field include the initiation of residential projects in Israel and are performed by Ashtrom Residential Initiation Ltd. (hereinafter: "Ashtrom Residential") and its held entities.
Below is a table of the main financial data of the group as presented in its financial statements (consolidated) (in thousands of NIS):
| Item | For the three months ended March 31, 2026 | For the three months ended March 31, 2025 | For the year ended December 31, 2025 |
|---|---|---|---|
| Revenue | 1,122,428 | 1,153,007 | 4,652,436 |
| Gross profit | 223,435 | 249,264 | 1,021,038 |
| Operating profit | 50,534 | 154,254 | 904,133 |
| Profit (loss) before taxes | (46,309) | 757 | 283,902 |
| Item | For the three months ended March 31, 2026 | For the three months ended March 31, 2025 | For the year ended December 31, 2025 |
|---|---|---|---|
| Net profit (loss) for the period | (39,633) | 4,303 | 287,014 |
| Net profit (loss) for the period attributable to the company's shareholders | (37,070) | 2,805 | 270,655 |
| Total balance sheet | 23,920,043 | 22,391,955 | 23,138,918 |
| Equity attributable to the company's shareholders | 5,347,995 | 5,512,502 | 5,545,780 |
| Total equity | 5,765,490 | 5,755,716 | 5,972,029 |
| Cash flow from (to) operating activities before land acquisition | (116,059) | (95,103) | 462,298 |
| Cash flow from (to) operating activities after land acquisition | (517,392) | (121,548) | 285,130 |
| EBITDA | 137,503 | 156,023 | 671,029 |
2. Order Backlog
The following is the group's order backlog in its fields of activity (in millions of NIS):
("Order Backlog" - means binding orders that have not yet been recognized as revenue in the financial statements)
| NIS Millions | Near the date of publication of the report | As of March 31, 2026 | As of December 31, 2025 |
|---|---|---|---|
| Construction and Infrastructure Contracting in Israel (*) | 8,128 | 8,321 | 8,294 |
| Industries (**) | 1,151 | 1,151 | 1,207 |
| Total | 9,279 | 9,472 | 9,501 |
(*) The order backlog does not include works from companies in the Ashtrom Group totaling approximately NIS 2 billion that are expected to be received during the years 2026-2027.
(**) Includes 50% in associated companies.
The main part of the company's order backlog in the residential construction, non-residential construction, and infrastructure construction fields (as detailed in Section 4.14 of Chapter A of the company's Periodic Report for 2025) is within the framework of lump-sum contracts. The main order backlog in the industries field is in the concrete sector and additionally a backlog of flooring products, marble cladding, and tools through Y. Zahavi (as detailed in Section 5.14 of Chapter A of the company's Periodic Report for 2025).
3. Events During the Report Period and Thereafter
a. On January 6, 2026, the held company and the local development partner, as defined in the company's previous immediate reports, signed a binding settlement agreement under which the held company will pay the local development partner, in accordance with the original engagement terms in the investment and cooperation agreement, its obligations regarding the El Patrimonio project and will perform early payments to which the local development partner will be entitled under the agreement regarding the projects: (1) Whitethorn; (2) Soles Rest; (3) Larrea Larrea of the company, all in amounts that are not material to the company, and in return, the held company will hand over its rights in the Rolling Sun project. For further details, see Section 3.1. of the company's Board of Directors' Report as of June 30, 2025, as published on August 27, 2025 (Ref. No.: 2025-01-064060), and an immediate report dated January 7, 2026 (Ref. No.: 2026-01-002670) (the content of which is included in this report by way of reference).
b. On February 5, 2026, Ashtrom Residential (formerly: Ashdar Building Company Ltd.), a wholly-owned subsidiary of the company, received a judgment from the Appeals Committee under the Real Estate Taxation Law near the Haifa District Court, which accepted its appeals against the tax managers in the Haifa and Central districts. The Appeals Committee ruled that its win in "Buyer's Price" (Mechir Lamishtaken) tenders does not constitute an acquisition of a "right in real estate" as defined in the law, and that legally its engagement with the state is that of an executing contractor acting on its behalf. Accordingly, it was determined that Ashtrom Residential is not liable for purchase tax on the land component in the "Buyer's Price" units, and that the tax managers must cancel the assessments and return the tax paid.
According to the company's assessment, if the judgment remains as is and is implemented, Ashtrom Residential is expected to receive a purchase tax refund and recognize a profit of approximately NIS 38 million (for projects charged to the profit and loss report). The timing of the refund, its final scope, and its accounting implications depend on further possible proceedings and decisions by the Tax Authority. The Tax Authority is entitled to file an appeal with the Supreme Court until towards the middle of June 2026. For further details, see the immediate report dated February 6, 2026 (Ref. No.: 2026-01-013145) (this information is included by way of reference).
c. On February 9, 2026, the company received a notice from the District Court for Administrative Matters in Tel Aviv-Jaffa regarding its joinder as a respondent to an administrative petition filed against the Israel Land Authority and the Ministry of Defense regarding the land subject to the Doctors' Housing tender (hereinafter: "the Tender"). The petition alleges, among other things, historical rights of the petitioners in the land and defects in their marketing within the framework of the Tender. The company is examining the claims and their possible implications for the project and, at this stage, cannot assess the prospects of the petition. The company is not a party to the dispute subject to the petition and was joined to the proceeding due to being the winner of the tender. For further details, see the immediate report dated February 10, 2026 (Ref. No.: 2026-01-013771) (this information is included by way of reference).
d. On March 11, 2026, the company's project company completed the financial closing for the El Patrimonio solar project in Texas, USA, with a planned capacity of approximately 195 MWdc. Within this framework, a financing agreement for the construction period in the amount of approximately 190-200 million US dollars and an agreement for the sale of tax credits (PTC) for an estimated total amount of approximately 135-140 million US dollars over 10 years were signed. The total investment in the project is estimated at approximately 250-255 million dollars. For further details, see the immediate report dated March 12, 2026 (Ref. No.: 2026-01-021952) (this information is included by way of reference).
e. On March 24, 2026, a dividend payment to the company's shareholders in a total amount of NIS 100 million was decided upon. The dividend was paid to the shareholders on April 15, 2026. The decision on dividend distribution is within the framework of the company's dividend distribution policy. For details, see the immediate report dated March 25, 2026 (Ref. No.: 2026-01-026784) (this information is included by way of reference).
f. On April 30, 2026, S&P Maalot Ltd. (hereinafter: "Maalot") published a rating report in which the company's rating was updated to ILA/STABLE for the company and a rating of ILA for the BONDS. For further details, see the immediate report of Maalot dated April 30, 2026 (Ref. No.: 2026-15-039747).
4. Business Environment
The combined attack by Hamas on October 7, 2023, on the State of Israel led to the outbreak of the Swords of Iron War (hereinafter - "the War") which ended on October 9, 2025, with the signing of an agreement between the State of Israel and the Hamas organization, under the auspices of the USA and as part of a regional plan announced by the President of the USA. Within the framework of the agreement, all living hostages were released and the fallen hostages were returned. The war led to an escalation in relations with Iran and its proxies, and in June 2025, Israel launched Operation "With a Lion" against Iran, which was an extensive military operation against military and Iranian installations,
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including nuclear facilities and ballistic missiles in Iran. The operation was characterized by a significant volume of airstrikes and cyberattacks, with exchanges of strikes and missiles between Israel, Iran, and other entities in the region. A ceasefire was signed on June 24, 2025.
On February 28, 2026, Operation 'Lion's Roar' began with a combined attack by the State of Israel and the United States against government targets in Iran. In response, Iran began firing towards Israel and towards American and civilian targets in the Middle East. Additionally, following the said operation, Hezbollah returned to attacking Israeli territory with missile fire and other means. It should be noted that immediately upon the start of the said operation, an emergency state was declared in the economy, emergency orders were issued, and restrictions were imposed on economic activity, including educational institutions and workplaces, and a large-scale reserve mobilization was declared. Following the date of the report, on April 8, 2026, the US and Iran reached a temporary ceasefire agreement, which also applies to Israel, and which as of the date of the report is still in effect. It should be noted that in the campaign against Hezbollah, which began concurrently with the one against Iran, a temporary ceasefire was declared, which is only partially observed. As of the date of approval of the financial statements, negotiations are being conducted between the parties regarding the extension of the ceasefire in the various arenas and striving for a permanent agreement between the parties.
As of the date of approval of the financial statements, Operation Lion's Roar had no material impact on the company; however, the Group is unable to assess the extent of the future impact of the war, if any, the resumption of fighting, or escalation on the various fronts, on the scope of the Group's activity and its business results, among other things in light of market volatility, uncertainty regarding the duration of the war, its intensity, its effects on the company's activities and the Israeli economy, and further steps that will be taken by the government. Nevertheless, the company estimates that its financial robustness allows it to cope with existing market conditions while meeting its obligations. In terms of its financial position, the company is robust, there is no concern regarding its financial robustness in the future, and it monitors and conducts ongoing assessment of the war's development, examines its exposure and the impact on its activities, and takes steps as necessary. For further details, see Section 3 of Chapter A of the Periodic report of the company for 2025.
Following the date of the report, close to its publication date, the Monetary Committee of the bank of Israel decided, on May 25, 2026, to reduce the bank of Israel interest rate by 0.25% to a level of 3.75%.
It should be clarified that the assumptions, estimates, and data detailed above regarding the possible impact of macroeconomic data, including the effects of the war, on the company's activity are forecasts, estimates, and appraisals and constitute "forward-looking information", as this term is defined in the Securities Law, based on information existing in the company, and including assessments, estimates, or intentions of the company, as of the date of the report. Actual impacts may differ from the results estimated or expected by the company due to events beyond the company's control, including the scope of the war, the combat arenas and its duration, and its impact on the functioning of the economy and the home front, changes in market conditions, regulatory changes, and the actual bank of Israel interest rate.
5. Financial Position:
Below are key figures from the Group's balance sheet items (in NIS thousands):
A. Current Assets
| Item | As of March 31, 2026 | As of March 31, 2025 | As of December 31, 2025 | Change relative to annual in NIS thousands | Change relative to annual in % | Rate of change relative to the corresponding period last year (%) | Company explanations |
|---|---|---|---|---|---|---|---|
| Cash and cash equivalents | 505,818 | 807,501 | 945,552 | (439,734) | (46.5%) | (37.4%) | The decrease in the balance of cash and short-term investments compared to 31.12.2025 stems mainly from: |
■ A decrease in the Extended Solo in the amount of approx. NIS 272 million mainly due to repayment of BONDS in the amount of approx. NIS 101 million and other current activities in the amount of approx. NIS 171 million.
■ A decrease in Ashtrom Properties in the amount of approx. NIS 202 million mainly due to repayment of BONDS in the amount of approx. NIS 140 million and investments in projects and other current activities in the amount of approx. NIS 62 million.
■ A decrease in Ashtrom Residence in the amount of approx. NIS 82 million which were used for investments in projects. |
| Short-term investments | 540,715 | 484,459 | 656,533 | (115,818) | (17.6%) | 11.6% | |
| Total cash and short-term investments | 1,046,533 | 1,291,960 | 1,602,085 | (555,552) | (34.7%) | (19%) | |
Board of Directors' Report on the State of the Corporation's Affairs
| Item | As of March 31, 2026 | As of March 31, 2025 | As of December 31, 2025 | Change relative to annual in NIS thousands | Change relative to annual in % | Rate of change relative to the corresponding period last year (%) | Company explanations |
|---|---|---|---|---|---|---|---|
| Trade receivables and income to be received | 1,222,825 | 1,151,133 | 1,139,496 | 83,329 | 7.3% | 6.2% | The increase in the item's balance compared to 31.12.2025 stems mainly from: ■ Increase in the contracting sector in the amount of approx. NIS 33 million. ■ Increase in the industries sector in the amount of approx. NIS 22 million. ■ Increase in Ashtrom Residence in the amount of approx. NIS 12 million. ■ Increase in Ashtrom International in the amount of approx. NIS 16 million. |
| Debtors and debit balances | 292,257 | 296,860 | 301,415 | (9,158) | (3%) | (1.6%) | The decrease in the item compared to 31.12.2025 stems mainly from: ■ Repayment of a seller's loan in Ashtrom Properties in the amount of approx. NIS 31.5 million in a short time to a purchaser of a lot in Barkan. ■ And conversely, an increase in other items in the amount of approx. NIS 22 million mainly due to advance payments to income tax, mainly in Ashtrom Residence. |
| Inventory of buildings and commercial space for sale | 2,479,307 | 1,516,781 | 2,079,009 | 400,298 | 19.3% | 63.5% | ■ The increase in the balance of the item compared to 31.12.2025 is mainly from the reclassification of land for construction to inventory of buildings for sale due to receiving a permit in the Tzrifin- Be'er Ya'akov project in the amount of approx. NIS 255 million and in the International Quarter- Lod project in the amount of approx. NIS 177 million. |
| Inventory | 182,722 | 178,385 | 161,686 | 21,036 | 13% | 2.4% | ■ The growth in the item compared to 31.12.2025 is in the industries sector. |
| Total current assets | 5,223,644 | 4,435,119 | 5,283,691 | (60,047) | (1.1%) | 17.8% | ■ Working capital ratio stands at 0.83 compared to 0.97 as of 31.12.25 |
Board of Directors' Report on the State of the Corporation's Affairs
B. Non-current Assets
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| Board of Directors report on the state of the corporation's affairs
| Item | As of March 31, 2026 | As of March 31, 2025 | As of December 31, 2025 | Change relative to annual in thousands of NIS | Change relative to annual in % | Rate of change relative to the same period last year (%) | Company Explanations |
|---|---|---|---|---|---|---|---|
| Investment property | 10,093,829 | 8,941,111 | 9,147,162 | 946,667 | 10.3% | 12.9% | Residential units and commercial spaces. ■ The balance as of 31.3.2026 arises from the Doctors' Housing project in Ramat Gan and relates to the land cost of the residential units and commercial spaces for rent. The cost for the part intended for sale is presented in the Land for construction item. The increase in the item compared to 31.12.2025 stems mainly from: ■ Reclassification from the Payments on account of investment property item in the amount of approximately NIS 582 million due to receiving possession and the start of rental in a project in the Neve Ayalon neighborhood in residential for rent. ■ Acquisition of a commercial property in England by Ashtrom Properties in the amount of approximately NIS 435 million. ■ Investments in properties in the amount of approximately NIS 50 million in several existing properties, mainly in Ashtrom Properties. ■ Capitalization of financing for properties under development in the |
| Item | As of March 31, 2026 | As of March 31, 2025 | As of December 31, 2025 | Change relative to annual in thousands of NIS | Change relative to annual in % | Rate of change relative to the same period last year (%) | Company Explanations |
|---|---|---|---|---|---|---|---|
| amount of approximately NIS 5 million. Negative translation differences were recorded in the amount of approximately NIS 92 million. Disposal of a property in Ashtrom Properties in the amount of approximately NIS 32 million. Devaluation of investment property, net in the amount of approximately NIS 2 million. |
| Board of Directors report on the state of the corporation's affairs
| Item | As of March 31 2026 | As of March 31 2025 | As of December 31 2025 | Change relative to annual in thousands of NIS | Change relative to annual in % | Rate of change relative to the same period last year (%) | Company Explanations |
|---|---|---|---|---|---|---|---|
| Associated companies | 2,204,433 | 2,134,891 | 2,227,237 | (22,804) | (1%) | 3.3% | The decrease in the item compared to 31.12.2025 stems from a decrease in loans provided to associated companies in the amount of approximately NIS 28 million. Conversely, an increase in the amount of approximately NIS 8 million from profits during the period, mainly in Ashtrom Properties. |
| Debts and other investments | 161,982 | 270,239 | 150,430 | 11,552 | 7.7% | (40.1%) | The increase in the item compared to 31.12.2025 stems from an increase in value in the amount of approximately NIS 7 million and from investments in the amount of approximately NIS 5 million. |
Board of Directors report on the state of the corporation's affairs
C. General Liabilities
D. Current Liabilities
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| BOARD OF DIRECTORS' REPORT ON THE STATE OF THE CORPORATION'S AFFAIRS
| Item | As of March 31, 2026 | As of March 31, 2025 | As of December 31, 2025 | Change compared to annual in NIS thousands | Change compared to annual in % | Rate of change compared to corresponding period last year (%) | Company explanations |
|---|---|---|---|---|---|---|---|
| Subcontractors and suppliers | 986,674 | 957,411 | 1,052,408 | (65,734) | (6.2%) | 3.1% | ■ The decrease compared to December 31, 2025, is mainly due to Ashtrom Renewable Energy in the amount of approximately NIS 24 million, Ashtrom Properties in the amount of approximately NIS 20 million, and Ashtrom Residential in the amount of approximately NIS 17 million. |
| Liability for combination transactions | 408,798 | 408,200 | 439,915 | (31,117) | (7.1%) | 0.1% | ■ The decrease compared to December 31, 2025, is due to Ashtrom Residential for the closing of a liability to landowners in accordance with the progress of construction in various projects in combination transactions under TAMA 38. |
| Advances from customers and purchasers of apartments and real estate | 90,990 | 87,020 | 90,714 | 276 | 0.3% | 4.6% | ■ No material change compared to December 31, 2025. |
| Dividend payable | 100,000 | 80,000 | - | 100,000 | N/A | N/A | ■ The balance represents a dividend to the company's shareholders that was approved for payment on March 24, 2026, and paid on April 15, 2026. |
| Accounts payable and credit balances | 387,072 | 444,896 | 392,177 | (5,105) | (1.3%) | (13%) | ■ The decrease compared to December 31, 2025, is mainly due to a decrease in liabilities to government offices, offset by an increase in expenses payable and liability for wage payments. |
| Total current liabilities | 6,302,679 | 4,721,773 | 5,441,949 | 860,730 | 15.8% | 33.5% |
E. Non-current liabilities
| Item | As of March 31, 2026 | As of March 31, 2025 | As of December 31, 2025 | Change compared to annual in NIS thousands | Change compared to annual in % | Rate of change compared to corresponding period last year (%) | Company explanations |
|---|---|---|---|---|---|---|---|
| Loans from banking corporations (in non-current liabilities) | 4,195,034 | 4,360,794 | 3,896,167 | 298,867 | 7.7% | (3.8%) | ■ The increase compared to December 31, 2025, is mainly: |
| ■ In Ashtrom Residential, an increase of approximately NIS 126 million was recorded, mainly due to a loan of NIS 180 million for land purchase and NIS 132 million for current operations. Conversely, reclassification to credit from banking corporations in the amount of approximately NIS 147 million due to receiving construction permits in projects and repayments totaling approximately NIS 38 million. | |||||||
| ■ In Ashtrom Renewable Energy, an increase of approximately NIS 88 million was recorded. | |||||||
| ■ In Ashtrom Properties, an increase of approximately NIS 46 million for various projects was recorded. | |||||||
| ■ In Ashtrom Residential for Rent, an increase of approximately NIS 54 million was recorded, mainly due to taking loans totaling approximately NIS 210 million mainly for a new project in the Doctors' Housing complex, and conversely, a decrease due to reclassifying long-term loans to current maturities totaling approximately NIS 154 million. | |||||||
| Loans from institutional entities | 2,395,321 | 2,400,814 | 2,394,824 | 497 | 0.02% | (0.2%) | ■ In Ashtrom Residential for Rent, an increase of approximately NIS 28 million was recorded, mainly due to receiving additional loans for projects under construction, offset by reclassification of loans to current maturities. |
| ■ Conversely, a decrease of approximately NIS 28 million due to loan repayments in Ashtrom Residential. |
F. Equity
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Board of Directors Report on the State of the Corporation's Affairs
6. Operating Results
The following are key figures from the Company's profit and loss statement (in thousands of NIS):
| Item | Note | For the three months ended March 31, 2026 | For the three months ended March 31, 2025 | For the year ended December 31, 2025 |
|---|---|---|---|---|
| Revenues | A | 1,122,428 | 1,153,007 | 4,652,436 |
| Cost of revenues | 898,993 | 903,743 | 3,631,398 | |
| Gross profit | A | 223,435 | 249,264 | 1,021,038 |
| Increase (decrease) in value of investment property, net | B | (46,406) | 12,263 | 301,072 |
| 177,029 | 261,527 | 1,322,110 | ||
| Selling and marketing expenses | C | 29,966 | 27,048 | 125,085 |
| General and administrative expenses | D | 102,548 | 102,432 | 416,453 |
| Company's share in profits of associates, net | E | 8,342 | 17,650 | 116,362 |
| Net income from tax credits | F | 8,047 | 4,881 | 40,519 |
| Other expenses, net | 10,370 | 324 | 33,320 | |
| Operating profit | G | 50,534 | 154,254 | 904,133 |
| Financing expenses | H | (136,550) | (185,187) | (747,549) |
| Financing income | H | 39,707 | 31,690 | 127,318 |
| Profit (loss) before income taxes (tax benefit) | (46,309) | 757 | 283,902 | |
| Tax benefit | (6,676) | (3,546) | (3,112) | |
| Net profit (loss) | I | (39,633) | 4,303 | 287,014 |
| Net profit (loss) attributable to the company's shareholders | (37,070) | 2,805 | 270,655 | |
| Net profit (loss) attributable to non-controlling interests | (2,563) | 1,498 | 16,359 |
| | Board of Directors Report on the State of the Corporation's Affairs |
Gross profit data by segments (in thousands of NIS): (including the Company's proportionate share in the results of associates)
| Segment/Item in profit and loss statement | 1.00% Revenues | 1.00% Costs | 1.00% Gross Profit | 1.00% Gross Profit Margin | 1.00% Revenues | 1.00% Costs | 1.00% Gross Profit | 1.00% Gross Profit Margin | 1.00% Revenues | 1.00% Costs | 1.00% Gross Profit | 1.00% Gross Profit Margin |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Construction contracting and infrastructure in Israel | 622,081 | 575,564 | 46,517 | 7.5% | 637,533 | 574,342 | 63,191 | 9.9% | 2,544,374 | 2,313,994 | 230,380 | 9.1% |
| Industries | 286,335 | 244,351 | 41,984 | 14.7% | 285,594 | 241,661 | 43,933 | 15.4% | 1,114,242 | 955,131 | 159,111 | 14.3% |
| Residential rentals | 28,408 | 3,237 | 25,171 | 88.6% | 25,639 | 3,535 | 22,104 | 86.2% | 117,273 | 22,379 | 94,894 | 80.9% |
| Franchising | 4,978 | 4,602 | 376 | 7.6% | 4,811 | 3,557 | 1,254 | 26.1% | 19,446 | 15,318 | 4,128 | 21.2% |
| International activity via Ashtrom International | 68,327 | 47,663 | 20,664 | 30.2% | 69,496 | 47,078 | 22,418 | 32.3% | 320,314 | 204,117 | 116,197 | 36.3% |
| Renewable energy | 16,074 | 8,881 | 7,193 | 44.7% | 11,616 | 7,512 | 4,104 | 35.3% | 71,488 | 37,688 | 33,800 | 47.3% |
| Investment real estate and initiation via Ashtrom Properties | 138,214 | 42,755 | 95,459 | 69.1% | 121,637 | 31,129 | 90,508 | 74.4% | 522,151 | 152,446 | 369,705 | 70.8% |
| Residential real estate initiation in Israel via Ashtrom Residence | 218,909 | 188,234 | 30,675 | 14.0% | 184,335 | 139,964 | 44,371 | 24.1% | 839,856 | 649,062 | 190,794 | 22.7% |
| Total before adjustments | 1,383,326 | 1,115,287 | 268,039 | 19.4% | 1,340,661 | 1,048,778 | 291,883 | 21.8% | 5,549,144 | 4,350,135 | 1,199,009 | 21.6% |
| Adjustments for internal revenues | (152,389) | (143,912) | (8,477) | - | (101,846) | (96,793) | (5,053) | - | (491,793) | (480,403) | (11,390) | - |
| Total before proportionate consolidation adjustments | 1,230,937 | 971,375 | 259,562 | 21.1% | 1,238,815 | 951,985 | 286,830 | 23.2% | 5,057,351 | 3,869,732 | 1,187,619 | 23.5% |
| Adjustments for proportionate consolidation | (108,509) | (72,382) | (36,127) | - | (85,808) | (48,242) | (37,566) | - | (404,915) | (238,334) | (166,581) | - |
| Total | 1,122,428 | 898,993 | 223,435 | 19.9% | 1,153,007 | 903,743 | 249,264 | 21.6% | 4,652,436 | 3,631,398 | 1,021,038 | 21.9% |
| Board of Directors Report on the State of the Corporation's Affairs
Data on the activity sectors of Industries, investment income-producing real estate via Ashtrom Properties, and residential real estate initiation in Israel via Ashtrom Residence also include the Company's proportionate share in the results of associates with an identical nature of activity to the sector in which they are held, in order to align the reported data with the management approach. It is clarified that the Company treats salary expenses as non-fixed expenses since the Company adjusts the scope of its salary costs according to the scope of projects and activities.
| Board of Directors Report on the State of the Corporation's Affairs
Notes to the table of operating results:
A. Revenues and gross profit:
The consolidated revenues in the reporting period amounted to approximately 1,122 million NIS compared to approximately 1,153 million NIS in the same period last year (a decrease of 2.7%) and compared to approximately 4,652 million NIS in the full year 2025. Gross profit in the reporting period amounted to approximately 223 million NIS compared to approximately 249 million NIS in the same period last year (a decrease of 10.4%) and compared to approximately 1,021 million NIS in the full year 2025. The gross profit margin stands at 19.9% compared to 21.6% in the same period last year and 21.9% in the year 2025.
The war launched by Israel and the US on February 28, 2026 (see section 4 above), caused various consequences for the Company's different segments, which were reflected, among other things, in a slowdown and reduction of activity, and consequently a decrease in revenues, a decrease in profitability, and a decrease in the number of apartments sold.
In the construction contracting and infrastructure sector in Israel, revenues in the reporting period amounted to approximately 622 million NIS compared to approximately 638 million NIS in the same period last year (a decrease of 2.4%), and compared to approximately 2,554 million NIS in the full year 2025. Gross profit in the reporting period amounted to approximately 47 million NIS compared to approximately 63 million NIS in the same period last year and compared to approximately 230 million NIS in the full year 2025. The gross profit margin was approximately 7.5% compared to 9.9% in the same period last year and compared to 9.1% in the year 2025. The decrease in the scope of contracting activity and its profitability was affected, among other things, by the war as detailed above, including all operational restrictions derived from it, as well as by the commencement of several new projects, compared to the completion of projects in the same period last year.
In the Industries sector, revenues in the reporting period amounted to approximately 286 million NIS, similar to the same period last year. In 2025, revenues amounted to approximately 1,114 million NIS. Gross profit amounted to approximately 42 million NIS compared to approximately 44 million NIS in the same period last year and compared to approximately 159 million NIS in the full year 2025. The gross profit margin stands at 14.7% compared to 15.4% in the same period last year and compared to 14.3% in the year 2025. The decrease in the scope of activity in the industry segment and its profitability was affected, among other things, by the war as detailed above, due to which contracting activity in the economy decreased and as a result, the demand for industrial products decreased and consequently production as well.
In the residential rentals sector, revenues in the reporting period amounted to approximately 28 million NIS compared to approximately 26 million NIS in the same period last year (an increase of 10.8%) and compared to approximately 117 million NIS in the full year 2025. Gross profit amounted to approximately 25 million NIS compared to approximately 22 million NIS in the same period last year and compared to approximately 95 million NIS in the full year 2025. The gross profit margin stands at 88.6% compared to 86.2% in the same period last year and compared to 80.9% in the year 2025.
During 2025, construction began on four additional projects in the sector which are expected to be completed between the years 2028-2029. During the first quarter of 2026, a project was completed
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fifth project of residential for rent in Neve Ayalon and its occupancy began, which was completed after the balance sheet date. In December 2025, the company won a tender for the construction and operation of a mega-project for residential for rent and sale of 1,189 housing units (of which 190 units are for sale and 999 for rent) near Tel Hashomer Hospital, a project with a scope of NIS 2.2 billion whose construction is expected to be completed in the years 2031-2032. Upon completion of the project's construction, the company will have approximately 3,280 housing units for rent in this area of activity.
In the Franchising sector, revenues totaled approximately NIS 5 million, similar to the corresponding period last year and compared to approximately NIS 19 million in the full year of 2025. Gross profit totaled approximately NIS 0.4 million compared to a total of approximately NIS 1.3 million in the corresponding period last year and compared to approximately NIS 4 million in the full year of 2025.
In the Foreign activity sector through Ashtrom International, revenues totaled NIS 68 million compared to NIS 69 million in the corresponding period last year (a decrease of 1.7%) and compared to approximately NIS 320 million in the full year of 2025. Gross profit totaled approximately NIS 21 million compared to approximately NIS 22 million in the corresponding period last year and compared to approximately NIS 116 million in the full year of 2025. The gross profit margin stood at 30.2% compared to 32.3% in the corresponding period last year and compared to 36.3% in 2025.
In the Renewable Energy sector, revenues totaled approximately NIS 16 million compared to NIS 12 million in the corresponding period last year (an increase of approximately 38.4%) and compared to approximately NIS 71 million in the full year of 2025. Gross profit in the report period totaled approximately NIS 7 million compared to a total of approximately NIS 4 million in the corresponding period last year and compared to approximately NIS 34 million in 2025.
During the second half of 2025, the company began developing an additional energy project EL-PATRIMONIO with a planned capacity of approximately 195 MWdc in Texas, USA.
On March 11, 2026, the company entered into an agreement with a banking corporation to finance the project in a scope of approximately 190-200 million USD. On the same day, the company entered into an agreement with an American institutional body for the sale of the project's tax credits for a period of approximately 10 years from the project's operation date and for a total amount of approximately 135-140 million USD. Construction of the project began in the first quarter of 2026 and is expected to be completed in the second half of 2027.
In addition to the two aforementioned projects, the company is promoting several additional renewable energy projects in the USA and Israel, including projects in the storage field.
In the Yielding Real Estate for Investment sector through Ashtrom Properties, revenues totaled approximately NIS 138 million compared to approximately NIS 122 million in the corresponding period last year (an increase of 13.6%) and compared to approximately NIS 522 million in the full year of 2025. Gross profit totaled approximately NIS 95 million compared to approximately NIS 91 million in the corresponding period last year and compared to 370 million NIS in the full year of 2025. The gross profit margin stood at 69.1% compared to 74.4% in the corresponding period last year and compared to 70.8% in 2025. The main increase in revenues results from the inclusion of a yielding property in Germany whose purchase was completed in the third quarter of
Board of Directors Report on the State of the Corporation's Affairs
year 2025, from a property in England whose purchase was completed in the fourth quarter of 2025 and a property in England purchased in the first quarter of 2026.
In the Residential Real Estate Development sector in Israel through Ashtrom Residential, revenues totaled approximately NIS 219 million compared to approximately NIS 184 million in the corresponding period last year (an increase of 18.8%) and compared to approximately NIS 840 million in the full year of 2025. Gross profit totaled approximately NIS 31 million compared to approximately NIS 44 million in the corresponding period last year and compared to approximately NIS 191 million in the full year of 2025. The gross profit margin stands at 14.0% compared to 24.1% in the corresponding period last year and compared to 22.7% in 2025. The decrease in profitability stems mainly from the decrease in apartment sales in Israel, emphasizing demand areas, against the backdrop of high interest rates and the long war. It should be noted that the nature of the war with Iran and Operation Lion's Roar led to a decrease in the volume of sales in the first quarter, following an increase in sales that occurred during the first two months of the quarter.
During the report period, Ashtrom Residential sold 72 housing units (including partners) in the free market compared to the corresponding period last year in which Ashtrom Residential sold 49 housing units (including partners), (including one apartment sold to eligible persons in the Buyer's Price program). In 2025, 350 housing units were sold (including partners) (including 121 housing units sold to eligible persons in the Buyer's Price program).
B. Appreciation/depreciation of investment property value, net: In the report period, there was a depreciation of investment property value totaling approximately NIS 46 million compared to an appreciation of investment property value totaling approximately NIS 12 million in the corresponding period last year and compared to an appreciation of value of approximately NIS 301 million in the full year of 2025. The main depreciation of value is in Ashtrom Residential for rent totaling approximately NIS 47 million regarding the Neve Ayalon project due to the change in classification from payments on account of investment property to investment property, a classification for which the company recognized the said depreciation of value, which stems from the rental of apartments for long periods in the first quarter of the year and consequently, their unavailability for sale. As stated, during the first quarter and in the period after the balance sheet date, the company succeeded, despite the war, in renting out all units in the project.
C. Sales and marketing expenses: Expenses totaled approximately NIS 30 million compared to approximately NIS 27 million in the corresponding period last year and compared to approximately NIS 125 million in the full year of 2025.
D. General and administrative expenses: Expenses totaled approximately NIS 103 million compared to approximately NIS 102 million in the corresponding period last year and compared to approximately NIS 416 million in the full year of 2025.
E. The Company's share in profits of associated companies, net: The group's share in associated companies' profits totaled approximately NIS 8 million compared to approximately NIS 18 million in the corresponding period last year and compared to approximately NIS 116 million in the full year of 2025. The main profit stemmed from Hutzot HaMifratz totaling approximately NIS 9 million.
F. Net income from tax credits: Net income from tax credits represents income from the sale of tax credits in the TIERRA BONITA renewable energy project in the USA. Net income totaled approximately NIS 8 million compared to a total of approximately NIS 5 million in the corresponding period and compared to approximately NIS 41 million in the full year of 2025.
Year 2025. Revenues are presented after allocation of expenses totaling approximately NIS 10 million, similar to the corresponding period last year, and a total of approximately 43 million NIS in 2025. These revenues are expected to total approximately 300 million USD (before expense allocation) over a period of 10 years according to the facility's production quantity.
G. Operating profit: Operating profit totaled approximately NIS 51 million compared to approximately NIS 154 million in the corresponding period last year and compared to 904 million NIS in the full year of 2025. The main decrease in profit resulted from a depreciation of investment property value in the balance sheet period totaling approximately NIS 46 million compared to an appreciation of value in the corresponding period totaling approximately NIS 12 million, from a decrease in gross profit totaling approximately NIS 26 million (mainly due to the war and its aforementioned implications on the various sectors), from a decrease in the company's share in associated companies' profits totaling approximately NIS 9 million. The operating profit margin stands at approximately 4.5% compared to approximately 13.4% in the corresponding quarter last year and compared to approximately 19.4% in 2025.
H. Financing expenses and income: Financing expenses totaled approximately NIS 137 million compared to 185 million NIS in the corresponding period last year and compared to approximately 748 million NIS in the full year of 2025. In the report period, expenses are after negative linkage of the group's liabilities totaling approximately NIS 5 million following a decrease in the Consumer Price Index, compared to expenses totaling approximately NIS 19 million in the corresponding period last year and compared to approximately 152 million NIS in 2025.
Financing income in the report period totaled approximately NIS 40 million compared to approximately NIS 32 million in the corresponding period last year and compared to approximately 127 million NIS in the full year of 2025. Financing income in the report period included profit from marketable securities totaling approximately NIS 11 million compared to approximately NIS 4 million in the corresponding period last year and compared to approximately 26 million NIS in 2025.
Net profit (loss): The net loss in the report period totaled approximately NIS 40 million (loss attributed to shareholders totaling approximately NIS 37 million) compared to a net profit of approximately NIS 4.3 million in the corresponding period last year (profit attributed to shareholders totaling approximately NIS 2.8 million) and compared to a net profit of approximately 287 million NIS in the full year of 2025 (profit attributed to shareholders approximately 271 million NIS). As stated, the net loss was mainly caused by the implications of the war on the various sectors as well as the depreciation of value the company performed on the Neve Ayalon project.
Comprehensive profit (loss): The comprehensive loss totaled approximately NIS 108 million compared to a comprehensive profit of approximately NIS 117 million in the corresponding period last year and compared to a profit of approximately 87 million NIS in the full year of 2025. The comprehensive loss in the report period mainly consists of the net loss totaling approximately NIS 40 million, from negative translation differences totaling NIS 72 million and deducting profit from cash flow hedge transactions totaling approximately NIS 3 million. In the corresponding period last year, the comprehensive profit included the net profit totaling approximately NIS 4 million, positive translation differences totaling NIS 131 million and deducting a loss from cash flow hedge transactions totaling approximately NIS 19 million. In 2025, the comprehensive profit included the net profit totaling approximately 287 million NIS, deducting negative translation differences totaling approximately 195 million NIS and a loss from cash flow hedge transactions totaling approximately 11 million NIS.
7. Liquidity and Financing Sources
| As of Item | 31.3.2026 NIS millions | 31.3.2026 % of total balance sheet | 31.3.2025 NIS millions | 31.3.2025 % of total balance sheet | 31.12.2025 NIS millions | 31.12.2025 % of total balance sheet |
|---|---|---|---|---|---|---|
| Equity | 5,765 | 24.1% | 5,756 | 25.7% | 5,972 | 25.8% |
| Long-term liabilities | 11,852 | 49.5% | 11,914 | 53.2% | 11,725 | 50.7% |
| Short-term liabilities | 6,303 | 26.4% | 4,722 | 21.1% | 5,442 | 23.5% |
| Total | 23,920 | 100% | 22,392 | 100% | 23,139 | 100% |
As of March 31, 2026, approximately $24.1\%$ of the company's assets were financed by equity.
The working capital ratio as of March 31, 2026 stands at 0.83 compared to a ratio of 0.94 on March 31, 2025 and compared to a ratio of 0.97 on December 31, 2025. The company's financing sources are based, as aforementioned, on internal sources as well as long-term and short-term loans from banks and institutional bodies, and also from public issuance of securities by the company and Ashtrom Properties.
It should be noted that as of March 31, 2026, the company, in the consolidated report, has a working capital deficit of approximately NIS 1,079 million and in the standalone report there is a working capital deficit of approximately NIS 598 million. According to the estimation of the company's Board of Directors, the company is able to meet its existing and expected financial obligations during the two years following the publication of the consolidated financial reports; likewise, the company's Board of Directors determined that the said deficit does not indicate a liquidity problem in the company. This assumption is based, among other things, on the company's cash flow forecast, on the company's ability to generate cash from current operations, on the company's financing sources, its ability to raise credit and on its unutilized credit facilities totaling approximately NIS 1.1 billion. Additionally, the company is acting to refinance part of its short-term credit into long-term loans, including credit refinanced after the balance sheet date, totaling approximately NIS 289 million, as described in Note 5C to the consolidated financial reports.
Together with the publication of this report, the company is publishing a report containing data regarding the company's statement of liabilities, as required by Regulation 38E of the Securities Regulations (Periodic and Immediate Reports) 5730-1970.
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Summary of the Company's Cash Flow Statement (in NIS millions)
| Item | For the 3-month period ended March 31, 2026 | For the 3-month period ended March 31, 2025 | For the year ended December 31, 2025 |
|---|---|---|---|
| Net cash provided by (used in) operating activities before land acquisition | (116) | (95) | 462 |
| Investment in land | (401) | (26) | (177) |
| Net cash provided by (used in) operating activities | (517) | (121) | 285 |
| Net cash used in investing activities | (731) | (139) | (690) |
| Net cash provided by (used in) financing activities | 810 | 128 | 428 |
| Translation differences for cash and cash equivalents balances | (2) | 2 | (15) |
| Decrease in cash and cash equivalents | (440) | (130) | 8 |
| Cash and cash equivalents at the beginning of the period | 946 | 938 | 938 |
| Cash and cash equivalents at the end of the period | 506 | 808 | 946 |
Cash flow from operating activities
Cash flows used in operating activities before investment in land during the report period totaled approximately NIS 116 million, compared to cash flows used in operating activities before investment in land totaling approximately NIS 95 million in the corresponding period last year and compared to cash flows provided by operating activities before investment in land totaling approximately NIS 462 million in all of 2025.
Net cash flows used in operating activities after investment in land during the report period totaled approximately NIS 517 million, compared to cash flows used in operating activities after investment in land totaling approximately NIS 121 million in the corresponding period last year and compared to cash flows provided by operating activities after investment in land totaling approximately NIS 285 million in all of 2025.
Cash flows from operating activities reflect the fact that in the first quarter of the year the Company began a number of new projects, compared to the corresponding quarter in which the Company completed a number of projects.
Cash flows from investing activities
Net cash flows used in investing activities during the report period totaled approximately NIS 731 million, compared to cash flows used in investing activities totaling approximately NIS 139 million in the corresponding period last year and compared to cash flows used in investing activities totaling approximately NIS 690 million in all of 2025.
The main investment activity during the report period arises from investments in payments on account of investment real estate in the amount of approximately NIS 251 million in residential for rent (mainly in the Neve Ayalon and Doctors' Housing projects), from investments in investment real estate and investment real estate under construction in the amount of approximately NIS 549 million, from investments in fixed assets in the amount of NIS 164 million, primarily in the renewable energy and industries sectors. On the other hand, net realizations of short-term investments amounted to approximately NIS 127 million, proceeds from the realization of fixed assets and investment real estate amounted to approximately NIS 63 million, and debt repayment from affiliates amounted to approximately NIS 35 million.
Cash flows from financing activities
Cash flows provided by financing activities during the report period totaled approximately NIS 810 million, compared to cash flows used in financing activities totaling approximately NIS 128 million in the corresponding period last year and compared to cash flows used in financing activities totaling approximately NIS 428 million in all of 2025.
During the period, the Group received long-term loans from banking and other corporations totaling approximately NIS 1,162 million, and received net short-term credit from banking and other corporations totaling approximately NIS 478 million. It repaid BONDS in the amount of approximately NIS 241 million, repaid long-term loans from banking and other corporations in the amount of approximately NIS 437 million, and paid interest in the amount of approximately NIS 139 million.
Net financial debt as of March 31, 2026 (in NIS thousands):
| Item | General | Construction and infrastructure (excluding in level) | Industries | Residential for rent | Consumables | Renewable energy | International operations (without international) | Non-financial real estate development in Israel - between 2000-2015 | Total (excluding reporting corporation) | Investment in real estate and development - between 2000-2015 | Total (including reporting corporation) |
|---|---|---|---|---|---|---|---|---|---|---|---|
| BONDS and credit from banking and other corporations | 3,597,606 | 60,183 | 320,541 | 2,817,561 | 212,936 | 1,052,508 | 54,190 | 2,176,966 | 10,292,491 | 5,204,373 | 15,496,864 |
| Cash and cash equivalents | 51,784 | 18,143 | 16,439 | 12,286 | 839 | 28,682 | 80,701 | 101,699 | 310,573 | 195,245 | 505,818 |
| Short-term investments and other long-term investments | 117,748 | 0 | 0 | 69,860 | 38,354 | 15,386 | 40,850 | 146,509 | 428,707 | 152,143 | 580,850 |
| Net financial liabilities (financial assets) per the financial report | 3,428,074 | 42,040 | 304,102 | 2,735,415 | 173,743 | 1,008,440 | (67,361) | 1,928,758 | 9,553,211 | 4,856,985 | 14,410,196 |
| Inter-segment credit | (3,489,206) | 239,299 | 402,114 | 1,634,243 | (30,582) | 573,784 | 670,348 | 0 | 0 | 0 | 0 |
| Net financial and inter-segment liabilities as of March 31, 2026 | (61,132) | 281,339 | 706,216 | 4,369,658 | 143,161 | 1,582,224 | 602,987 | 1,928,758 | 9,553,211 | 4,856,985 | 14,410,196 |
| Term | General | General link and infrastructure constraints in Israel | Industrial | Residential for rent | Contractors | Ownership energy | International operations (initium international) | Mandatory real estate development in Israel (initium European) | Real real/swing reporting cooperation | Industrials and estate and development decision-making | Real civil/swing reporting cooperation |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net financial and inter-segment liabilities as of December 31, 2025 | (150,726) | 341,112 | 652,877 | 3,887,141 | 147,693 | 1,410,783 | 589,873 | 1,586,200 | 8,464,953 | 4,460,984 | 12,925,937 |
8. Sensitivity tests for the fair value of financial instruments as of March 31, 2026 (in NIS thousands):
- Sensitivity test for changes in the exchange rate between the NIS and the US Dollar:
| NIS (NIS Inc. based on 2009-2010 tax rate) | NIS (NIS Inc. based on 2009-2010 tax rate) | NIS (NIS Inc. based on 2009-2010 tax rate) | NIS (NIS Inc. based on 2009-2010 tax rate) | NIS (NIS Inc. based on 2009-2010 tax rate) | |
|---|---|---|---|---|---|
| Excess liabilities in US Dollar | (85,355) | (42,678) | (853,552) | 42,678 | 85,355 |
- Sensitivity test for changes in the exchange rate between the NIS and the Euro:
| NIS (NIS Inc. based on 2009-2010 tax rate) | NIS (NIS Inc. based on 2009-2010 tax rate) | NIS (NIS Inc. based on 2009-2010 tax rate) | NIS (NIS Inc. based on 2009-2010 tax rate) | NIS (NIS Inc. based on 2009-2010 tax rate) | |
|---|---|---|---|---|---|
| Excess liabilities in Euro | (44,394) | (22,197) | (443,945) | 22,197 | 44,394 |
- Sensitivity test for changes in the exchange rate between the NIS and the Pound:
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- Sensitivity tests for changes in market interest rates:
| Profit (loss) from changes in market factor 2% increase | Profit (loss) from changes in market factor 1% increase | Fair value for 31.3.2026 | Profit (loss) from changes in market factor 1% decrease | Profit (loss) from changes in market factor 2% decrease | |
|---|---|---|---|---|---|
| Sensitivity test for change in the Shekel interest rate | |||||
| Fixed interest loans | 42,524 | 21,262 | (2,126,195) | (21,262) | (42,524) |
| Variable interest loans | (102,589) | (51,294) | (5,129,427) | 51,294 | 102,589 |
| Sensitivity test for change in the Euro interest rate | |||||
| Fixed interest loans | 12,504 | 6,252 | (625,202) | (6,252) | (12,504) |
| Variable interest loans | (1,075) | (538) | (53,764) | 538 | 1,075 |
| Sensitivity test for change in the Dollar interest rate | |||||
| Fixed interest loans | (12,458) | (6,229) | (622,885) | 6,229 | 12,458 |
| Variable interest loans | (4,668) | (2,334) | (233,384) | 2,334 | 4,668 |
| Sensitivity test in the Pound interest rate | |||||
| Fixed interest loan | 15,124 | 7,562 | (756,219) | (7,562) | (15,124) |
- Sensitivity tests for changes in Stock Exchange prices for securities:
| Profit (loss) from changes in market factor 10% increase | Profit (loss) from changes in market factor 5% increase | Fair value for 31.3.2026 | Profit (loss) from changes in market factor 1% decrease | Profit (loss) from changes in market factor 10% decrease | |
|---|---|---|---|---|---|
| Marketable securities | 27,646 | 13,823 | 276,457 | (13,823) | (27,646) |
- Sensitivity tests for changes in price indices:
| Profit (loss) from changes in market factor 2% increase | Profit (loss) from changes in market factor 1% increase | Book value as of 31.3.2026 | Profit (loss) from changes in market factor 1% decrease | Profit (loss) from changes in market factor 2% decrease | |
|---|---|---|---|---|---|
| Balances linked to the price index: | |||||
| Surplus of linked liabilities | (132,665) | (66,332) | (6,633,248) | 66,332 | 132,665 |
For the linkage basis report as of March 31, 2026, and December 31, 2025, see Appendix A to this report.
For quarterly disclosure regarding real estate entrepreneurship projects performed by Ashtrom Residential Entrepreneurship, see Appendix B to this report.
9. Specific Disclosure for Bondholders
A. Below are details regarding the company's BONDS in circulation, for the reporting year and close to the date of publication of the report:
| Series (Note No.) | Material Series | Issuance Date | Per Value at Issuance | Per Value as of 31.1.2028 | Expected Per Value (according to Hrskaya terms) in thousands of NIS for 31.1.2028 | Accrued Interest Amount in Dousands of NIS for 31.1.2028 | Value in the BONDS to Unusual Financial Statements (in thousands of NIS) | Market Value as of 31.1.2028 (in thousands of NIS) | Interest Loss and effective Interest | Obligation for additional payment | Principal payment dates | Interest payment dates | Linkage Series | Convention to another security | Existence of early redemption right |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| C (1-4)(8) | Yes | 16.2.17 01.05.18 23.10.18 14.2.19 05.05.20 03.04.23 | 1,777,556,000 | 605,528,336 | 605,528 | 5,350 | 600,901 | 606,013 | Annual Interest rate 4.3% | - | Every six months starting 15.7.19 until 15.1.29 (inclusive) (see Note A) | Every six months starting 15.7.17 until 15.1.29 (inclusive) (see Note A) | Not linked | No | Yes, see section 6 of the Trust Deed for the BONDS (Series 3) |
| D (5-8) | Yes | 27.12.21 29.6.22 7.12.22 03.04.23 | 1,538,959,000 | 1,308,115,150 | 1,505,258 | 2,784 | 1,435,800 | 1,442,328 | Fixed annual interest rate of 0.75% | - | Every year starting 25.12.24 until 25.12.28 (inclusive) (see Note B) | Every six months starting 30.6.22 until 31.12.29 (inclusive) (see Note B) | Consumer Price Index published on 15.12.20 for November 2021 | No | Yes, see section 6 of the Trust Deed for the BONDS (Series 4) |
| E (9-10) | Yes | 07.09.23 01.07.25 | 868,492,000 | 825,067,400 | 877,643 | 8,829 | 890,414 | 925,808 | Fixed annual interest rate of 4.08% | - | Every year starting 31.12.25 until 31.12.32 (inclusive) (see Note C) | Every six months starting 31.12.23 until 31.12.32 (inclusive) (see Note C) | Consumer Price Index published on 15.08.23 for July 2023 | No | Yes, see section 6 of the Trust Deed for the BONDS (Series 5) |
| Total | 4,185,007,000 | 2,738,710,886 | 2,988,429 | 16,963 | 2,927,115 | 2,974,149 |
A. The semi-annual interest for the company's BONDS (Series 3) will be at a rate of $2.15\%$ . It is clarified that the BONDS (Series 3) are due for repayment (principal) in 20 equal semi-annual payments, where the first payment will be made on July 15, 2019. The company's BONDS (Series 3) were issued after the report date. For further details, see the Trust Deed for the BONDS (Series 3) which was attached as Appendix A to the shelf offering report published on February 15, 2017 (Ref No.: 2017-01-014359).
B. The semi-annual interest for the company's BONDS (Series 4) will be at a rate of $0.375\%$ . It is clarified that the BONDS (Series 4) are due for repayment (principal) in 6 unequal annual payments, where the first payment will be made on December 31, 2024, and the last payment on December 31, 2029. For further details, see the Trust Deed for the BONDS (Series 4) published on December 28, 2021 (Ref No.: 2021-01-115027).
C. The semi-annual interest for the company's BONDS (Series 5) will be at a rate of $2.04\%$ . It is clarified that the BONDS (Series 5) are due for repayment (principal) in 8 unequal annual payments, where the first payment will be made on December 31, 2025, and the last payment on December 31, 2032. For further details, see the Trust Deed for the BONDS (Series 5) which was attached as Appendix A to the shelf offering report published on September 7, 2023 (Ref No.: 2023-01-085102).
Notes:
(1) As part of a public offering dated April 30, 2018 (Note: the shelf offering report is from April 30 and results on May 1), the company allocated by way of a series expansion 194,352,000 NIS par value of BONDS (Series 3) for a gross consideration of 200,960 thousand NIS.
(2) As part of a public offering dated October 21, 2018, the company allocated by way of a series expansion 400,000 thousand NIS par value of BONDS (Series 3) for a gross consideration of 407,200 thousand NIS.
(3) As part of a public offering dated February 14, 2019, the company allocated by way of a series expansion 250,000 thousand NIS par value of BONDS (Series 3) for a gross consideration of 249,000 thousand NIS.
(4) As part of a public offering dated May 4, 2020, the company allocated by way of a series expansion 370,000 thousand NIS par value of BONDS (Series 3) for a gross consideration of 382,210 thousand NIS.
(5) As part of a public offering dated December 26, 2021, the company allocated 300,000 thousand NIS par value of BONDS (Series 4) for a gross consideration of 308,400 thousand NIS.
(6) As part of a public offering dated June 29, 2022, the company allocated 550,000 thousand NIS par value of BONDS (Series 4) for a gross consideration of 504,350 thousand NIS.
(7) As part of a public offering dated December 6, 2022, the company allocated 488,600 thousand NIS par value of BONDS (Series 4) for a gross consideration of 450,001 thousand NIS.
(8) As part of a public offering dated April 3, 2023, the company allocated by way of a series expansion 299,641 thousand NIS par value of BONDS (Series 3) for a gross consideration of 286,157 thousand NIS, as well as 200,359 thousand NIS par value of BONDS (Series 4) for a gross consideration of 186,588 thousand NIS.
(9) As part of a public offering dated September 7, 2023, the company allocated 350,000 thousand NIS par value of BONDS (Series 5) for a gross consideration of 350,000 thousand NIS.
(10) As part of a public offering dated July 1, 2023, the company allocated by way of a series expansion 518,492 thousand NIS par value of BONDS (Series 5) for a gross consideration of 569,823 thousand NIS.
B. Details about the Trustee for the BONDS
| Series | Trust Company Name | Contact Details | Address for Sending Documents | Trustee Contact Person Details |
|---|---|---|---|---|
| C | Reznik Paz Nevo Trusts Ltd. | Phone: 03-6393311, Fax: 03-6393316 | 14 Yad Harutzim, Tel Aviv | Accountant Yossi Reznik |
| D | Reznik Paz Nevo Trusts Ltd. | Phone: 03-6393311, Fax: 03-6393316 | 14 Yad Harutzim, Tel Aviv | Accountant Yossi Reznik |
| E | Reznik Paz Nevo Trusts Ltd. | Phone: 03-6393311, Fax: 03-6393316 | 14 Yad Harutzim, Tel Aviv | Accountant Yossi Reznik |
C. Rating of the company's outstanding BONDS
| Series | Rating at time of Issuance | Rating at time of this report | Name of Rating Company |
|---|---|---|---|
| C | A Stable outlook | A Stable outlook | Standard & Poor's Maalot Ltd. |
| D | A Stable outlook | A Stable outlook | Standard & Poor's Maalot Ltd. |
| E | A Stable outlook | A Stable outlook | Standard & Poor's Maalot Ltd. |
(*) For details about the company's current rating report, see Maalot's immediate report dated April 30, 2026 (Ref No.: 2026-15-039747).
D. Compliance with conditions and obligations of the company towards holders of BONDS (Series C, D, and E) of the company
Below are details regarding the company's compliance with the financial covenants established in the trust deeds for BONDS (Series 3), BONDS (Series 4), and BONDS (Series 5) of the company:
A. As of March 31, 2026, the company's consolidated equity (including minority rights) amounted to approximately NIS 5.8 billion.
B. The ratio of the company's consolidated equity (including minority rights) to the total balance sheet (net of cash, deposits, and short-term investments [as defined in accepted accounting principles and the trust deeds]) amounted to approximately 25.2%.
C. The ratio of net financial debt (as defined in the trust deeds) to the company's total consolidated balance sheet amounted to approximately 60.4%. According to the definition of the trust deed of the BONDS (Series 5), the ratio is 60.2%.
As of the date of this report, the company complies with all conditions and obligations in the trust deeds for BONDS (Series 3), for BONDS (Series 4), and for BONDS (Series 5). It is noted that
Conditions giving the holders of BONDS (Series 3) and/or (Series 4) and/or (Series 5) cause to call the BONDS (Series 3) and/or (Series 4) and/or (Series 5) for immediate repayment have not occurred.
10. Corporate Governance Aspects
Negligible Transactions Procedure
For details regarding the negligible transactions procedure in the company, see Section 12 in Chapter B "Board of Directors Report on the State of the Corporation's Affairs" in the company's Periodic report for the year 2025.
Procedure for Classification and Approval of "Non-Exceptional" Transactions
For details regarding the procedure for classification and approval of "non-exceptional" transactions, see Section 6 in Chapter D "Additional Details about the Corporation" in the company's Periodic report for the year 2025.
The Board of Directors and the Company's management hereby express their appreciation to the Company's employees and managers.
| Avraham Nussbaum, | Gil Giron, | |
|---|---|---|
| Chairman of the Board | CEO and Director |
Today: May 26, 2026
Appendix A
Linkage Basis Report as of March 31, 2026 (in thousands of NIS):
| Name | Mort.-Federal | Dobbs-Federal | S&W-Federal | Eure-Federal | S&W-Federal | Other Debates | Note-Transparency | Total |
|---|---|---|---|---|---|---|---|---|
| Current assets | ||||||||
| Cash and cash equivalents | 246,442 | 0 | 105,354 | 79,887 | 71,136 | 2,999 | 0 | 505,818 |
| Short-term investments | 470,388 | 0 | 29,084 | 32,571 | 8,672 | 0 | 0 | 540,715 |
| Trade receivables and income receivable | 1,010,395 | 15,626 | 30,998 | 142,060 | 13,533 | 10,213 | 0 | 1,222,825 |
| Other receivables and debit balances ** | 78,845 | 79,404 | 162 | 3,132 | 9,107 | 3,588 | 98,820 | 273,058 |
| Inventory of buildings and commercial spaces for sale | 0 | 0 | 0 | 0 | 0 | 0 | 2,479,307 | 2,479,307 |
| Item | Non-linked | Index-linked | USD-linked | Euro-linked | GBP-linked | Other linkage | Non-monetary | Total |
|---|---|---|---|---|---|---|---|---|
| Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 182,722 | 182,722 |
| Long-term investments and debts | ||||||||
| Lands | 0 | 0 | 0 | 0 | 0 | 0 | 1,407,769 | 1,407,769 |
| Investment property under construction | 0 | 0 | 0 | 0 | 0 | 0 | 981,978 | 981,978 |
| Receivables regarding concession arrangements ** | 0 | 234,910 | 0 | 0 | 0 | 0 | 0 | 234,910 |
| Payments on account of investment property | 0 | 0 | 0 | 0 | 0 | 0 | 117,984 | 117,984 |
| Investment property | 0 | 0 | 0 | 0 | 0 | 0 | 10,093,829 | 10,093,829 |
| Associated and other companies | 564,794 | 171,509 | 0 | 56,624 | 0 | 0 | 1,411,506 | 2,204,433 |
| Other debts and investments | 126,324 | 10,541 | 8,279 | 0 | 0 | 3,713 | 13,125 | 161,982 |
| Fixed assets | 0 | 0 | 0 | 0 | 0 | 0 | 3,365,904 | 3,365,904 |
| Intangible assets | 0 | 0 | 0 | 0 | 0 | 0 | 70,454 | 70,454 |
| Deferred taxes | 0 | 0 | 0 | 0 | 0 | 0 | 76,355 | 76,355 |
| Total assets | 2,497,188 | 511,990 | 173,877 | 314,274 | 102,448 | 20,513 | 20,299,753 | 23,920,043 |
| Item | Non-linked | Index-linked | USD-linked | Euro-linked | GBP-linked | Other linkage | Non-monetary | Total |
|---|---|---|---|---|---|---|---|---|
| Current liabilities | ||||||||
| Credit from banking corporations * | (1,373,475) | 0 | (19,546) | 0 | (289,192) | 0 | 0 | (1,682,213) |
| Credit from institutional bodies * | (400,000) | 0 | 0 | 0 | 0 | 0 | 0 | (400,000) |
| Subcontractors and suppliers *** | (871,406) | (205) | (10,714) | (47,113) | (7,919) | (4,552) | 0 | (941,909) |
| Liabilities regarding combination transactions | 0 | 0 | 0 | 0 | 0 | 0 | (408,798) | (408,798) |
| Advances from customers and apartment buyers | (90,211) | 0 | (779) | 0 | 0 | 0 | 0 | (90,990) |
() Current maturities in respect of long-term liabilities were combined with long-term liabilities.
() Current maturities of receivables in respect of concession arrangements were combined with receivables in respect of concession arrangements.
(*) Current maturities of lease liability were combined with lease liabilities.
Linkage Basis Report as of December 31, 2025 (in thousands of NIS):
| Item | Non-linked | Index-linked | USD-linked | Euro-linked | GDP-linked | Other linkage | Non-monetary | Total |
|---|---|---|---|---|---|---|---|---|
| Inventory of buildings and commercial spaces for sale | 0 | 0 | 0 | 0 | 0 | 0 | 2,079,009 | 2,079,009 |
| Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 161,686 | 161,686 |
| Long-term investments and debts | ||||||||
| Lands | 0 | 0 | 0 | 0 | 0 | 0 | 1,424,333 | 1,424,333 |
| Investment property under construction | 0 | 0 | 0 | 0 | 0 | 0 | 900,206 | 900,206 |
| Receivables regarding concession arrangements ** | 0 | 239,789 | 0 | 0 | 0 | 0 | 0 | 239,789 |
| Payments on account of investment property acquisition | 0 | 0 | 0 | 0 | 0 | 0 | 494,993 | 494,993 |
| Investment property | 0 | 0 | 0 | 0 | 0 | 0 | 9,147,162 | 9,147,162 |
| Associated and other companies | 621,674 | 175,260 | 0 | 23,544 | 0 | 0 | 1,406,759 | 2,227,237 |
| Other debts and investments | 126,194 | 2,753 | 8,352 | 0 | 0 | 3,713 | 9,418 | 150,430 |
| Fixed assets | 0 | 0 | 0 | 0 | 0 | 0 | 3,144,038 | 3,144,038 |
| Intangible assets | 0 | 0 | 0 | 0 | 0 | 0 | 71,478 | 71,478 |
| Deferred taxes | 0 | 0 | 0 | 0 | 0 | 0 | 74,537 | 74,537 |
| Total assets | 2,886,026 | 480,011 | 399,121 | 245,215 | 65,906 | 24,320 | 19,038,319 | 23,138,918 |
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| Section | Unlinked | CPI-linked | Dollar-linked | Euro-linked | Pound-linked | Other linkage | Non monetary | Total |
|---|---|---|---|---|---|---|---|---|
| Current liabilities | ||||||||
| Credit from banking corporations * | (976,098) | 0 | (31,900) | 0 | 0 | 0 | 0 | (1,007,998) |
| Credit from institutional entities * | (400,000) | 0 | 0 | 0 | 0 | 0 | 0 | (400,000) |
| Subcontractors and suppliers | (907,714) | (205) | (37,350) | (38,959) | (20,021) | (3,161) | 0 | (1,007,410) |
| Liabilities for combination transactions | 0 | 0 | 0 | 0 | 0 | 0 | (439,915) | (439,915) |
| Advances from project commissioners and apartment buyers | (88,976) | 0 | (1,738) | 0 | 0 | 0 | 0 | (90,714) |
| Payables and credit balances | (285,794) | (28,907) | (149) | (12,327) | (33,948) | (6,729) | (24,323) | (392,177) |
| Long-term liabilities | ||||||||
| Loans from banks * | (2,696,032) | (63,829) | (806,342) | (646,507) | (730,537) | 0 | 0 | (4,943,247) |
| Loans from institutional entities* | (308,977) | (2,186,661) | 0 | 0 | 0 | 0 | 0 | (2,495,638) |
| BONDS * | (1,003,065) | (4,639,004) | 0 | 0 | 0 | 0 | 0 | (5,642,069) |
| Lease liabilities * | 0 | (295,595) | (98,591) | 0 | 0 | 0 | 0 | (394,186) |
| Other liabilities | (32,653) | 0 | (21,491) | (11,897) | 0 | 0 | 0 | (66,041) |
| Liabilities for employee benefits | (23,436) | 0 | 0 | 0 | 0 | 0 | 0 | (23,436) |
| Deferred taxes | 0 | 0 | 0 | 0 | 0 | 0 | (264,058) | (264,058) |
| Total liabilities | (6,722,745) | (7,214,201) | (997,561) | (709,690) | (784,506) | (9,890) | (728,296) | (17,166,889) |
| Assets less liabilities | (3,836,719) | (6,734,190) | (598,440) | (464,475) | (718,600) | 14,430 | 18,310,023 | 5,972,029 |
() Current maturities for long-term liabilities were combined with long-term liabilities.
(*) Current maturities of debtors for concession arrangements were combined with debtors for concession arrangements.
Appendix B
Projects in execution and/or marketing -
A. Below are details of housing units in execution and/or marketing¹ as of March 31, 2026:
| Project Name | Project Location | Company's Share | Contractual completion rate as of 31/03/26 | No. of housing units for marketing | No. of housing units sold (binding contracts) as of 31/03/26 | Contractual value of sales as of 31/03/26 excluding VAT in NIS thousands | Expected construction completion date^{2} |
|---|---|---|---|---|---|---|---|
| Gali Netanya - Building 1 | Netanya | 100% | 92% | 78 | 52 | 121,546 | 08/2026 |
| Gali Netanya - Building 2 | Netanya | 100% | 80% | 74 | 21 | 46,100 | 02/2027 |
| New Krinitzi | Ramat Gan | 33% | 52% | 56 | 35 | 187,211 | 05/2027 |
| Neot Afeka | Tel Aviv | 100% | 92% | 69 | 35 | 180,040 | 09/2026 |
| HaShaked - Phase A | Kiryat Ono | 100% | 13% | 91 | 20 | 63,997 | 11/2028 |
| Ibn Shaprut | Herzliya | 100% | 95% | 32 | 22 | 73,041 | 05/2026 |
| Remez 36 | Tel Aviv | 100% | 86% | 9 | 3 | 18,684 | 08/2026 |
| Anochi 1 | Tel Aviv | 100% | 82% | 15 | 7 | 25,293 | 08/2026 |
| Chirelson - Building 1 | Tel Aviv | 100% | 21% | 25 | 3 | 16,209 | 05/2028 |
| Chirelson - Building 2 | Tel Aviv | 100% | 21% | 22 | 6 | 29,114 | 05/2028 |
| Zichron Ya'akov 7 | Tel Aviv | 100% | 70% | 13 | 4 | 17,620 | 02/2027 |
| GO YAFO - TEL AVIV Building 1 | Tel Aviv | 50% | 73% | 68 | 59 | 109,773 | 02/2027 |
| GO YAFO - TEL AVIV Building 2 | Tel Aviv | 50% | 74% | 68 | 52 | 86,336 | 02/2027 |
| GO YAFO - TEL AVIV Building 3 | Tel Aviv | 50% | 75% | 68 | 61 | 107,466 | 02/2027 |
| GO YAFO - TEL AVIV Building 4 | Tel Aviv | 50% | 80% | 72 | 41 | 130,985 | 02/2027 |
| GO YAFO - TEL AVIV Building 5 | Tel Aviv | 50% | 80% | 71 | 30 | 90,185 | 02/2027 |
| Park Tower (HaMavdil) | Ramat Gan | 50% | 7% | 126 | 23 | 77,696 | 12/2029 |
| HaMeah Complex - Building 1 | Ra'anana | 100% | 18% | 43 | 9 | 27,554 | 03/2028 |
| HaMeah Complex - Building 2 | Ra'anana | 100% | 18% | 42 | 7 | 22,424 | 03/2028 |
| HaMeah Complex - Building 3 | Ra'anana | 100% | 18% | 26 | - | - | 03/2028 |
| Borochov 24 | Ra'anana | 100% | 38% | 31 | 7 | 29,467 | 07/2027 |
| Borochov 14 | Ra'anana | 100% | 19% | 32 | - | - | 11/2027 |
| The International Quarter - Lot 311 Building 1 | Lod | 100% | 15% | 49 | 10 | 21,559 | 05/2028 |
| The International Quarter - Lot 311 Building 2 | Lod | 100% | 15% | 52 | 9 | 19,341 | 05/2028 |
| The International Quarter - Lot 311 Building 3 | Lod | 100% | 15% | 49 | 16 | 32,453 | 05/2028 |
| Ramat Hadar - Building 1 | Givat Shmuel | 100% | 21% | 101 | 9 | 25,055 | 05/2028 |
| Ramat Hadar - Building 2 | Givat Shmuel | 100% | 21% | 21 | 7 | 27,081 | 05/2028 |
| Rehovot HaNahar 13 | Ramat Gan | 100% | 20% | 36 | 13 | 50,514 | 05/2028 |
| Alterman 2-4 | Tel Aviv | 100% | 9% | 26 | 1 | 4,619 | 03/2028 |
| Lamdan 15 | Tel Aviv | 100% | 8% | 13 | - | - | 04/2028 |
| Ashtrom on the Park - Building 1 | Be'er Ya'akov | 50% | 13% | 101 | 50 | 69,283 | 03/2029 |
| Total | - | - | - | 1,738 (Company's Share 1,334) | 683 (Company's Share 466) | 1,807,812 (Company's Share 1,298,560) |
| Project Name | Project Location | Company's Share | Contractual completion rate as of 31/03/26 | No. of housing units for marketing | No. of housing units sold (binding contracts) as of 31/03/26 | Contractual value of sales as of 31/03/26 excluding VAT in NIS thousands | Expected construction completion date^{2} |
|---|---|---|---|---|---|---|---|
| Ashtrom on the Park - Building 2 | Be'er Ya'akov | 50% | 13% | 14 | 5 | 5,728 | 03/2029 |
| Ashtrom on the Park - Building 3 | Be'er Ya'akov | 50% | 13% | 14 | 4 | 4,270 | 03/2029 |
| Ashtrom on the Park - Building 4 | Be'er Ya'akov | 50% | 13% | 101 | 47 | 64,543 | 03/2029 |
| Ashtrom on the Park - Building 5 | Be'er Ya'akov | 50% | 13% | 30 | 15 | 22,625 | 03/2029 |
| Total | - | - | - | 1,738 (Company's Share 1,334) | 683 (Company's Share 466) | 1,807,812 (Company's Share 1,298,560) |
1 Excluding housing units for marketing in projects that have begun the occupancy process listed in Section B. The number of housing units in the project and the number of units sold do not include the owners' parts in in-kind combination transactions, pinui binui (evacuation-construction), TAMA 38, in construction services transactions and the apartments designated for delivery without consideration to the State of Israel in the GO YAFO TEL AVIV project.
2 The information detailed below is forward-looking information and is based on the data available to the Company on the date of this report. It is possible that due to factors beyond the Company's control, the project will not be completed by the dates specified in this table.
Board of Directors' Report on the State of the Corporation's Affairs
B. Below are details regarding the sale of housing units in projects whose construction was completed by March 31, 2026:
| Project Name | Company's Share | No. of housing units for marketing in project* | No. of housing units sold until 31/12/25 | No. of housing units sold in period 1-3/26 | No. of housing units sold until 31/03/26 | Remaining housing units for marketing as of 31/03/26 |
|---|---|---|---|---|---|---|
| RECANATI RESIDENCE - Building 2 - Tel Aviv | 100% | 35 | 34 | - | 34 | 1 |
| Tagore Building C - Tel Aviv | 100% | 53 | 52 | - | 52 | 1 |
| Seidoff Jerusalem - Preservation Tower + Commercial (**) | 50% | 10 | 9 | - | 9 | 1 |
| Einstein 63-67 Tel Aviv | 100% | 27 | 25 | - | 25 | 2 |
| HaAtzmaut 77 - Herzliya | 100% | 26 | 19 | 3 | 22 | 4 |
| Tar'ad 6 - Ramat Gan | 100% | 17 | 16 | 1 | 17 | - |
| Total | - | 168 | 155 | 4 | 159 | 9 |
() Includes the partners' share in the project, as far as the company has such, but does not include the owners' parts in in-kind combination transactions, pinui binui (evacuation-construction), TAMA 38 and in construction services transactions.
(*) The balance is a commercial unit only.
C. Below are data regarding housing unit sales transactions signed during the report period, 1-3/2026:
| Project Name | Building Rate | Complaint sold* | Complaint sold by persons who are subject during the period in sqm† | Complaint sold by NIS thousands*‡ | Complaint sold by sqm in NIS*§ |
|---|---|---|---|---|---|
| Gali Netanya - Building 1 | 100% | 4 | 458 | 9,429 | 20,587 |
| Gali Netanya - Building 2 | 100% | 2 | 249 | 4,667 | 18,743 |
| New Krinitzi - Ramat Gan | 33% | 1 | 127 | 4,193 | 33,016 |
| Neot Afeka - Tel Aviv | 100% | 5 | 619 | 21,842 | 35,286 |
| HaShaked Phase A - Kiryat Ono | 100% | 6 | 559 | 15,730 | 28,140 |
| Remez 36 - Tel Aviv | 100% | 1 | 50 | 2,950 | 59,000 |
| HaAtzmaut 77 - Herzliya | 100% | 3 | 322 | 9,297 | 28,873 |
| Tar'ad 6 - Ramat Gan | 100% | 1 | 89 | 3,108 | 34,921 |
| Anochi 1 - Tel Aviv | 100% | 1 | 98 | 3,500 | 35,714 |
| Chirelson - Building 1 - Tel Aviv | 100% | 2 | 134 | 7,207 | 53,784 |
| Chirelson - Building 2 - Tel Aviv | 100% | 2 | 176 | 9,201 | 52,278 |
| Zichron Ya'akov 7 - Tel Aviv | 100% | 1 | 52 | 2,340 | 45,000 |
| GO YAFO - TEL AVIV Building 3 | 50% | 1 | 101 | 3,213 | 31,812 |
| GO YAFO - TEL AVIV Building 4 | 50% | 6 | 687 | 21,485 | 31,274 |
| GO YAFO - TEL AVIV Building 5 | 50% | 9 | 1,063 | 30,108 | 28,324 |
| PARK TOWER (The Tower) - Ramat Gan | 50% | 7 | 666 | 21,043 | 31,596 |
| HaMeah Complex - Building 1 - Ra'anana | 100% | 1 | 127 | 3,291 | 25,913 |
| HaMeah Complex - Building 2 - Ra'anana | 100% | 2 | 268 | 7,169 | 26,750 |
| Borochov 24 - Ra'anana | 100% | 1 | 100 | 2,497 | 24,970 |
| Ramat Hadar - Building 1 - Tel Aviv | 100% | 3 | 353 | 9,796 | 27,751 |
| Ramat Hadar - Building 2 - Tel Aviv | 100% | 4 | 443 | 12,632 | 28,515 |
| Rehovot HaNahar 13 - Ramat Gan | 100% | 7 | 700 | 25,406 | 36,294 |
| Alterman 2-4 - Tel Aviv | 100% | 1 | 109 | 4,619 | 42,376 |
| Ashtrom on the Park - Building 1 - Be'er Ya'akov | 50% | 1 | 104 | 2,338 | 22,481 |
| Total | 72 | 7,654 | 237,061 |
(*) Includes the partners' share in the project, as far as the company has such.
In the period from April 1, 2026 and until close to the report date, the company sold 19 housing units (the company's share is approximately 16 housing units), of which 2 housing units (the company's share - one housing unit) were within the framework of the Target Price program. The total scope of contracts amounted to approximately NIS 81 million (the company's share is approximately NIS 72 million), of which a total of approximately NIS 2.5 million (the company's share - approximately NIS 1.2 million) was within the framework of the Target Price program.
1 Data do not include VAT.
5/27/2026 | 5:30:07 AM | v1.2.5
Ashtrom Group Ltd.
Consolidated Interim Financial Statements
As of March 31, 2026
Unaudited
Ashtrom Group Ltd.
Consolidated Interim Financial Statements as of March 31, 2026
Unaudited
Table of Contents
| Page | |
|---|---|
| Review of Consolidated Interim Financial Statements | 2 |
| Consolidated Statements of Financial Position | 3-4 |
| Consolidated Statements of Profit or Loss | 5 |
| Consolidated Statements of Comprehensive Income | 6 |
| Consolidated Statements of Changes in Equity | 7-9 |
| Consolidated Statements of Cash Flows | 10-12 |
| Notes to the Consolidated Interim Financial Statements | 13-21 |
Kost Forer Gabbay & Kasierer
144 Menachem Begin Road,
Tel-Aviv 6492102
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
Review Report of the Independent Accountant
To the Shareholders of
Ashtrom Group Ltd.
Introduction
We have reviewed the accompanying financial information of Ashtrom Group Ltd. and consolidated companies (hereinafter - the Group), which includes the condensed consolidated statement of financial position as of March 31, 2026 and the condensed consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows for the three-month period ended on that date. The board of directors and management are responsible for the preparation and presentation of financial information for this interim period in accordance with International Accounting Standard IAS 34 - "Interim Financial Reporting" and they are responsible for the preparation of financial information for this interim period under Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970. Our responsibility is to express a conclusion on this interim financial information based on our review.
We did not review the condensed interim financial information of consolidated companies whose assets included in the consolidation constitute approximately 16% of the total consolidated assets as of March 31, 2026, and whose revenues included in the consolidation constitute approximately 6% of the total consolidated revenues for the three-month period ended on that date. Furthermore, we did not review the condensed interim financial information of companies presented on an equity basis, the investment in which amounted to approximately NIS 56.9 million as of March 31, 2026, and the Group's share in the profits of these companies amounted to approximately NIS 0.7 million for the three-month period ended on that date. The condensed interim financial information of these companies was reviewed by other accountants whose review reports were provided to us, and our conclusion, as far as it relates to the financial information for these companies, is based on the review reports of the other accountants.
Scope of Review
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 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 and the review reports of other accountants, nothing has come to our attention that causes us to believe that the aforementioned financial information is not prepared, in all material respects, in accordance with International Accounting Standard IAS 34.
In addition to the statement in the previous paragraph, based on our review and the review reports of other accountants, nothing has come to our attention that causes us to believe that the aforementioned financial information does not comply, in all material respects, with the disclosure requirements under Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970.
Tel-Aviv,
May 26, 2026
Kost Forer Gabbay & Kasierer
Accountants
Ashtrom Group Ltd.
Consolidated Statements of Financial Position
NIS thousands
| Consolidated Statements of Financial Position | As of March 31, 2026
Unaudited | As of March 31, 2025
Unaudited | As of Dec 31, 2025
Audited |
| --- | --- | --- | --- |
| Current Assets | | | |
| Cash and cash equivalents | 505,818 | 807,501 | 945,552 |
| Short-term investments | 540,715 | 484,459 | 656,533 |
| Trade receivables and income receivable | 1,222,825 | 1,151,133 | 1,139,496 |
| Other receivables and debit balances | 292,257 | 296,860 | 301,415 |
| Inventory of buildings and commercial areas for sale | 2,479,307 | 1,516,781 | 2,079,009 |
| Inventory | 182,722 | 178,385 | 161,686 |
| Total current assets | 5,223,644 | 4,435,119 | 5,283,691 |
| Non-current Assets | | | |
| Lands for construction | 1,407,769 | 1,867,587 | 1,424,333 |
| Investment property under construction | 981,978 | 622,194 | 900,206 |
| Debtors in respect of concession arrangements | 215,711 | 230,368 | 220,813 |
| Payments on account of investment property acquisition | 117,984 | 494,766 | 494,993 |
| Investment property | 10,093,829 | 8,941,111 | 9,147,162 |
| Associated companies | 2,204,433 | 2,134,891 | 2,227,237 |
| Other debts and investments | 161,982 | 270,239 | 150,430 |
| Fixed assets, net | 3,365,904 | 3,257,316 | 3,144,038 |
| Intangible assets and goodwill | 70,454 | 77,083 | 71,478 |
| Deferred taxes | 76,355 | 61,281 | 74,537 |
| Total non-current assets | 18,696,399 | 17,956,836 | 17,855,227 |
| Total assets | 23,920,043 | 22,391,955 | 23,138,918 |
The accompanying notes form an integral part of the consolidated interim financial statements.
5/27/2026 | 5:30:09 AM | v1.2.5
Ashtrom Group Ltd.
Consolidated Statements of Financial Position
NIS thousands
| Consolidated Statements of Financial Position | As of March 31 2026 Unaudited | As of March 31 2025 Unaudited | As of December 31 2025 Audited |
|---|---|---|---|
| Current liabilities | |||
| Credit from banking corporations | 1,682,213 | 676,128 | 1,007,998 |
| Loans from institutional entities | 400,000 | 400,000 | 400,000 |
| Current maturities of non-current liabilities | 2,246,932 | 1,668,118 | 2,058,737 |
| Subcontractors and suppliers | 986,674 | 957,411 | 1,052,408 |
| Liability for combination transactions | 408,798 | 408,200 | 439,915 |
| Advances from customers and purchasers of apartments and land | 90,990 | 87,020 | 90,714 |
| Dividend payable | 100,000 | 80,000 | - |
| Payables and credit balances | 387,072 | 444,896 | 392,177 |
| Total current liabilities | 6,302,679 | 4,721,773 | 5,441,949 |
| Non-current liabilities | |||
| Loans from banking corporations | 4,195,034 | 4,360,794 | 3,896,167 |
| Loans from institutional entities | 2,395,321 | 2,400,814 | 2,394,824 |
| BONDS | 4,493,460 | 4,400,453 | 4,731,226 |
| Lease liabilities | 392,944 | 305,721 | 349,188 |
| Other liabilities | 92,946 | 79,754 | 66,041 |
| Liabilities for employee benefits | 23,968 | 20,067 | 23,436 |
| Deferred taxes | 258,201 | 346,863 | 264,058 |
| Total non-current liabilities | 11,851,874 | 11,914,466 | 11,724,940 |
| Total liabilities | 18,154,553 | 16,636,239 | 17,166,889 |
| Equity attributable to company shareholders | |||
| Share capital | 57,259 | 57,259 | 57,259 |
| Share premium | 1,937,580 | 1,927,711 | 1,937,580 |
| Retained earnings | 3,614,293 | 3,458,201 | 3,751,363 |
| Funds | (261,137) | 69,331 | (200,422) |
| Total | 5,347,995 | 5,512,502 | 5,545,780 |
| Non-controlling interests | 417,495 | 243,214 | 426,249 |
| Total equity | 5,765,490 | 5,755,716 | 5,972,029 |
| Consolidated Statements of Financial Position | As of March 31 2026 Unaudited | As of March 31 2025 Unaudited | As of December 31 2025 Audited |
|---|---|---|---|
| Total liabilities and equity | 23,920,043 | 22,391,955 | 23,138,918 |
The accompanying notes form an integral part of the consolidated interim financial statements.
Avraham Nussbaum
Chairman of the Board
Gil Giron
CEO and Director
Gal Omer
CFO
Yeshayahu Abramovich
Chief Accountant
Approval date of the financial statements: May 26, 2026
Ashtrom Group Ltd.
Consolidated Statements of Profit or Loss
| Consolidated Statements of Profit or Loss | For the 3 months ended March 31 2026 | For the 3 months ended March 31 2025 | For the year ended December 31 2025 |
|---|---|---|---|
| Unaudited | Unaudited | Audited | |
| Revenue | 1,122,428 | 1,153,007 | 4,652,436 |
| Cost of revenue | 898,993 | 903,743 | 3,631,398 |
| Gross profit | 223,435 | 249,264 | 1,021,038 |
| Increase (decrease) in value of investment property, net | (46,406) | 12,263 | 301,072 |
| 177,029 | 261,527 | 1,322,110 | |
| Selling and marketing expenses | 29,966 | 27,048 | 125,085 |
| General and administrative expenses | 102,548 | 102,432 | 416,453 |
| Group's share in profits of associates, net | 8,342 | 17,650 | 116,362 |
| Net income from tax concessions | 8,047 | 4,881 | 40,519 |
| Other expenses, net | 10,370 | 324 | 33,320 |
| Operating profit | 50,534 | 154,254 | 904,133 |
| Financing expenses | (136,550) | (185,187) | (747,549) |
| Financing income | 39,707 | 31,690 | 127,318 |
| Profit (loss) before tax benefit | (46,309) | 757 | 283,902 |
| Tax benefit | (6,676) | (3,546) | (3,112) |
| Net profit (loss) | (39,633) | 4,303 | 287,014 |
| Net profit (loss) attributable to: | |||
| Company shareholders | (37,070) | 2,805 | 270,655 |
| Non-controlling interests | (2,563) | 1,498 | 16,359 |
| (39,633) | 4,303 | 287,014 | |
| Net profit (loss) per share attributable to company shareholders (in NIS) | |||
| Basic and diluted net profit (loss) | (0.33) | 0.03 | 2.43 |
Consolidated Statements of Comprehensive Income
| For the 3 months ended March 31, 2026 | For the 3 months ended March 31, 2025 | For the year ended December 31, 2025 | |
|---|---|---|---|
| Unaudited | Unaudited | Audited | |
| 2026 | 2025 | 2025 | |
| Net profit (loss) | (39,633) | 4,303 | 287,014 |
| Other comprehensive income (loss) (after tax impact): | |||
| Amounts that are or will be classified in the future to profit or loss, net of tax: | |||
| Gain (loss) from cash flow hedging transactions | 2,736 | (19,193) | (10,944) |
| Adjustments arising from translation of financial statements of foreign operations | (69,133) | 127,437 | (193,343) |
| Group's share in other comprehensive income (loss), net of associates for adjustments arising from translation of financial statements of foreign operations | (2,886) | 3,266 | (1,834) |
| (69,283) | 111,510 | (206,121) | |
| Amounts that will not be classified in the future to profit or loss, net of tax: | |||
| Revaluation for revaluation of fixed assets (buildings and land) | 709 | 766 | 6,983 |
| Loss from remeasurement of defined benefit plans, net | - | - | (460) |
| 709 | 766 | 6,523 | |
| Total other comprehensive income (loss) | (68,574) | 112,276 | (199,598) |
| Total comprehensive income (loss) | (108,207) | 116,579 | 87,416 |
| Total comprehensive income (loss) attributable to: | |||
| Company shareholders | (99,406) | 103,759 | 90,151 |
| Non-controlling interests | (8,801) | 12,820 | (2,735) |
| Total | (108,207) | 116,579 | 87,416 |
Consolidated Statements of Changes in Equity
NIS thousands, Unaudited
| Consolidated Statements of Changes in Equity | Share Capital | Share Premium | Fund from transactions with controlling shareholders | Retained earnings | Fund for share-based payment | Revaluation fund | Adjustments from translation of financial statements | Fund from hedging transactions | Fund from transactions with non-controlling interests | Total attributable to company shareholders | Non-controlling interests | Total Equity |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance as of January 1, 2026 (Audited) | 57,259 | 1,937,580 | 25,013 | 3,751,363 | 25,072 | 373,127 | (582,203) | (23,761) | (17,670) | 5,545,780 | 426,249 | 5,972,029 |
| Net loss | - | - | - | (37,070) | - | - | - | - | - | (37,070) | (2,563) | (39,633) |
| Total other comprehensive income (loss) | - | - | - | - | - | 709 | (64,875) | 1,830 | - | (62,336) | (6,238) | (68,574) |
| Total comprehensive income (loss) | - | - | - | (37,070) | - | 709 | (64,875) | 1,830 | - | (99,406) | (8,801) | (108,207) |
| Dividend to shareholders | - | - | - | (100,000) | - | - | - | - | - | (100,000) | - | (100,000) |
| Share-based payment cost | - | - | - | - | 1,621 | - | - | - | - | 1,621 | - | 1,621 |
| Classification of non-controlling interests | - | - | - | - | - | - | - | - | - | 47 | 47 | - |
| Balance as of March 31, 2026 | 57,259 | 1,937,580 | 25,013 | 3,614,293 | 26,693 | 373,836 | (647,078) | (21,931) | (17,670) | 5,347,995 | 417,495 | 5,765,490 |
5/27/2026 (5:30:10 AM) v1.2.5
Consolidated statements of changes in equity
Thousands of NIS, unaudited
| Consolidated statements of changes in equity | Share capital | Share premium | Capital reserve from transactions with controlling shareholders | Retained earnings | Share-based payment reserve | Revaluation reserve | Adjustments from translation of financial statements | Hedging reserve | Reserve from transactions with non-controlling interests | Total attributable to company shareholders | Non-controlling interests | Total equity |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance as of January 1, 2025 (audited) | 57,158 | 1,342,445 | 25,013 | 3,535,396 | 30,317 | 391,916 | (408,390) | (10,547) | (58,419) | 4,904,889 | 230,394 | 5,135,283 |
| Net profit | - | - | - | 2,805 | - | - | - | - | - | 2,805 | 1,498 | 4,303 |
| Total other comprehensive income (loss) | - | - | - | - | - | 766 | 119,381 | (19,193) | - | 100,954 | 11,322 | 112,276 |
| Total comprehensive income (loss) | - | - | - | 2,805 | - | 766 | 119,381 | (19,193) | - | 103,759 | 12,820 | 116,579 |
| Issuance of shares | 100 | 583,811 | - | - | - | - | - | - | - | 583,911 | - | 583,911 |
| Dividend to shareholders | - | - | - | (80,000) | - | - | - | - | - | (80,000) | - | (80,000) |
| Share-based payment cost | - | - | - | - | (58) | - | - | - | - | (58) | - | (58) |
| Exercise of warrants for shares | 1 | 1,455 | - | - | (1,455) | - | - | - | - | 1 | - | 1 |
| Balance as of March 31, 2025 | 57,259 | 1,927,711 | 25,013 | 3,458,201 | 28,804 | 392,682 | (289,009) | (29,740) | (58,419) | 5,512,502 | 243,214 | 5,755,716 |
The accompanying notes are an integral part of the interim consolidated financial statements.
Consolidated statements of changes in equity
Thousands of NIS, audited
| Consolidated statements of changes in equity | Share capital | Share premium | Capital reserve from transactions with controlling shareholders | Retained earnings | Share-based payment reserve | Revaluation reserve | Adjustments from translation of financial statements | Hedging reserve | Reserve from transactions with non-controlling interests | Total attributable to company shareholders | Non-controlling interests | Total equity |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance as of January 1, 2025 | 57,158 | 1,342,445 | 25,013 | 3,535,396 | 30,317 | 391,916 | (408,390) | (10,547) | (58,419) | 4,904,889 | 230,394 | 5,135,283 |
| Net profit | - | - | - | 270,655 | - | - | - | - | - | 270,655 | 16,359 | 287,014 |
| Total other comprehensive income (loss) | - | - | - | (460) | - | 6,983 | (173,813) | (13,214) | - | (180,504) | (19,094) | (199,598) |
| Total comprehensive income (loss) | - | - | - | 270,195 | - | 6,983 | (173,813) | (13,214) | - | 90,151 | (2,735) | 87,416 |
| Issuance of shares | 100 | 583,811 | - | - | - | - | - | - | - | 583,911 | - | 583,911 |
| Share-based payment cost | - | - | - | - | 6,079 | - | - | - | - | 6,079 | - | 6,079 |
| Exercise of warrants for shares | 1 | 11,324 | - | - | (11,324) | - | - | - | - | 1 | - | 1 |
| Dividend to shareholders | - | - | - | (80,000) | - | - | - | - | - | (80,000) | - | (80,000) |
| Dividend paid to non-controlling interests | - | - | - | - | - | - | - | - | - | - | (9,671) | (9,671) |
The accompanying notes are an integral part of the interim consolidated financial statements.
9
Consolidated statements of cash flows
Thousands of NIS
| For the 3 months ended March 31 2026 | For the 3 months ended March 31 2025 | For the year ended December 31 2025 | |
|---|---|---|---|
| unaudited | unaudited | audited | |
| Consolidated statements of cash flows | |||
| Cash flows from operating activities | |||
| Net profit (loss) | (39,633) | 4,303 | 287,014 |
| Adjustments necessary to present cash flows from operating activities: | |||
| Adjustments to profit or loss items: | |||
| Group share in profits of associates, net | (8,342) | (17,650) | (116,362) |
| Decrease (increase) in value of investment property and investment property under construction | 46,406 | (12,263) | (301,072) |
| Interest costs, net | 92,424 | 79,354 | 389,107 |
| Profit from marketable securities | (10,690) | (3,784) | (25,743) |
| Depreciation and amortization of fixed assets and intangible assets | 37,844 | 33,088 | 139,800 |
| Deferred taxes, net | (346) | (25,902) | (85,490) |
| Impairment of lands for construction | - | - | 1,725 |
| Revaluation of long-term loans | 2,050 | (5,720) | 90,898 |
| Revaluation of BONDS | 3,449 | 20,483 | 140,152 |
| For the 3 months ended March 31 2026 | For the 3 months ended March 31 2025 | For the year ended December 31 2025 | |
|---|---|---|---|
| unaudited | unaudited | audited | |
| Loss from realization and increase in value of investments | - | 3 | - |
| Change in liabilities due to employee benefits, net | 532 | 1,504 | 4,326 |
| Share-based payment cost | 1,621 | (58) | 6,079 |
| Loss (profit) from disposal of fixed assets | 92 | (175) | (3,105) |
| Revaluation of long-term receivables and other investments | (7,331) | 32,834 | 16,633 |
| Loss (profit) from receivables regarding franchise arrangements | 226 | (708) | (5,782) |
| Total | 157,935 | 101,006 | 251,166 |
| Changes in asset and liability items: | |||
| Increase in customers and income receivable and in debtors and debit balances | (117,758) | (204,267) | (240,553) |
| Decrease (increase) in inventory of buildings and commercial spaces for sale, net of advances from customers and apartment buyers, and in inventory | (25,085) | (38,383) | 32,770 |
| Increase (decrease) in subcontractors and suppliers and in creditors and credit balances | (61,648) | 62,773 | 190,953 |
| Total | (204,491) | (179,877) | (16,830) |
| Cash paid and received during the period for: | |||
| Dividend received | 1,500 | - | 17,900 |
| Taxes paid | (35,550) | (20,827) | (80,594) |
| Taxes received | 4,180 | 292 | 3,642 |
| Total | (29,870) | (20,535) | (59,052) |
| Cash derived from (used in) operating activities before investment in lands for construction | (116,059) | (95,103) | 462,298 |
| Investment in lands for construction | (401,333) | (26,445) | (177,168) |
| Net cash derived from (used in) operating activities | (517,392) | (121,548) | 285,130 |
Consolidated statements of cash flows
Thousands of NIS
| Consolidated statements of cash flows | For the 3 months ended March 31, 2026 unaudited | For the 3 months ended March 31, 2025 unaudited | For the year ended December 31, 2025 audited |
|---|---|---|---|
| Cash flows from investing activities | |||
| Investment in investment property | (485,475) | (36,858) | (420,685) |
| Investment in investment property under construction | (63,600) | (15,185) | (152,479) |
| Payments on account of investment property | (250,959) | (5) | (232) |
| Realizations (investments) in short-term investments, net | 126,508 | (103,018) | (253,133) |
| Investment in fixed assets | (163,555) | (57,493) | (252,106) |
| Interest received | 7,588 | 15,401 | 49,357 |
| Repayment of long-term loans to associate companies, net | 35,122 | 28,507 | 14,647 |
| Collection of receivables regarding franchise arrangements | 4,653 | 4,324 | 17,876 |
| Investment in associate companies and other property | - | - | (400) |
| Proceeds from disposal of fixed assets and investment property | 63,369 | 53,439 | 218,375 |
| Taxes paid regarding sale of investment property | - | (27,406) | (44,135) |
| Proceeds from realization of other investments | - | - | 96,319 |
| Granting of long-term loans and other investments | (5,368) | (1,065) | (1,015) |
| Collection of long-term loans and deposits | 958 | 117 | 37,350 |
| Net cash used in investing activities | (730,759) | (139,242) | (690,261) |
| Cash flows from financing activities | |||
| Issuance of BONDS (net of issuance expenses) | - | - | 959,714 |
| Issuance of shares (net of issuance expenses) | - | 583,911 | 583,911 |
| Repayment of BONDS | (241,336) | (235,750) | (871,732) |
| Receipt of long-term loans from banking and other corporations | 1,161,665 | 262,547 | 1,003,180 |
| Repayment of long-term loans from banking and other corporations | (436,775) | (160,817) | (719,541) |
| Short-term credit from banking and other corporations, net | 477,976 | (177,306) | (33,850) |
| Repayment of lease liabilities | (11,912) | (10,686) | (41,103) |
| Interest paid | (139,046) | (134,156) | (604,190) |
| Proceeds from exercise of warrants | - | 1 | 1 |
| Issuance to non-controlling interests | - | - | 269,916 |
| Acquisition from non-controlling interests | - | - | (29,030) |
| Dividend to shareholders | - | - | (80,000) |
| Dividend to non-controlling interests | - | - | (9,671) |
| Net cash derived from financing activities | 810,572 | 127,744 | 427,605 |
| Consolidated statements of cash flows | For the 3 months ended March 31, 2026 unaudited | For the 3 months ended March 31, 2025 unaudited | For the year ended December 31, 2025 audited |
|---|---|---|---|
| Translation differences on cash and cash equivalent balances | (2,155) | 2,226 | (15,243) |
| Increase (decrease) in cash and cash equivalents | (439,734) | (130,820) | 7,231 |
| Cash and cash equivalent balance at start of period | 945,552 | 938,321 | 938,321 |
| Cash and cash equivalent balance at end of period | 505,818 | 807,501 | 945,552 |
5/27/2026 (5:30:11 AM) v1.2.0
Consolidated Statements of Cash Flows
| For the 3 months ended March 31 2026 | For the 3 months ended March 31 2025 | For the year ended December 31, 2025 | |
|---|---|---|---|
| Unaudited | Unaudited | Audited | |
| Consolidated Statements of Cash Flows | |||
| Material non-cash activities | |||
| Dividend payable to company shareholders | 100,000 | 80,000 | - |
| Recognition of right-of-use asset against lease liability | 55,444 | 63,576 | 145,560 |
Notes to the Consolidated Interim Financial Statements
Note 1: - General
a. These financial statements were prepared in a condensed format as of March 31, 2026 and for the three-month period ended on that date (hereinafter - consolidated interim financial statements). These statements should be read in conjunction with the Company's consolidated financial statements as of December 31, 2025 and for the year ended on that date and the notes accompanying them (hereinafter - the annual consolidated financial statements).
b. Consequences of the Iron Swords War
The combined attack by Hamas on October 7, 2023, on the State of Israel, led to the outbreak of the Iron Swords War (hereinafter - "the War") which ended on October 9, 2025, with the signing of an agreement between the State of Israel and the Hamas organization, under the auspices of the USA and as part of a regional plan announced by the US President. As part of the agreement, all living hostages were released and the fallen hostages were returned. The war led to an escalation in relations with Iran and its proxies, and in June 2025 Israel launched operation "Am Kelavi" against Iran, which was an extensive military operation against military and Iranian facilities, including nuclear and ballistic missile facilities in Iran. The operation was characterized by a significant scope of air and cyber attacks, with exchanges of attacks and missiles between Israel, Iran, and other parties in the region; a ceasefire was signed on June 24, 2025.
On February 28, 2026, the "Shagat HaAri" operation began with a combined attack by the State of Israel and the United States against government targets in Iran. In response, Iran began firing toward Israel and toward American and civilian targets in the Middle East. Also, following the operation as mentioned, Hezbollah returned to attack the territory of the State of Israel with missiles and other means. It should be noted that immediately with the opening of the operation as mentioned above, an emergency state was declared in the economy, emergency orders were issued and restrictions were imposed on economic activity, including educational institutions and workplaces, and an extensive reserve mobilization was announced. After the report date, on April 8, 2026, the USA and Iran reached a temporary ceasefire agreement, which also applied to Israel, which as of the date of the report is still in effect. It should be noted that also in the campaign against Hezbollah, which began parallel to the one with Iran, a temporary ceasefire was announced, a ceasefire which is only partially maintained. As of the date of approval of the financial statements, negotiations are taking place between the parties on the extension of the ceasefire in the various arenas and on striving for a permanent agreement between the parties.
As of the date of approval of the financial statements, the Shagat HaAri operation had no material effect on the Company; however, the Group is unable to assess the scope of the future impact of the War, if any, the resumption of fighting, or escalation on the various fronts, on the scope of the Group's operations and its business results, among other things in light of market volatility, uncertainty regarding the duration of the fighting, its intensity, its effects on the Company's activities and the Israeli economy, and further steps to be taken by the government. Nevertheless, in the Company's assessment, its financial robustness allows it to cope with existing market conditions while meeting its obligations. Regarding its financial position, the Company is robust, there is no concern regarding its financial robustness in the future, and it monitors and maintains an ongoing assessment of the development of the War, examines its exposure and the impact on its activities, and takes steps as necessary.
Notes to the Consolidated Interim Financial Statements
Note 1: - General (Continued)
C. As of March 31, 2026, the Company has a working capital deficit of approximately NIS 1,079 million. In the opinion of the Company's board of directors, the Company is able to meet its existing and expected financial obligations during the two years following the publication of the consolidated financial statements. This assumption is based, among other things, on the Company's cash flow forecast, the Company's ability to generate cash from operating activities, the Company's financing sources and its ability to raise credit and its unutilized credit facilities in the amount of approximately NIS 1.1 billion. In addition, the Company is working to recycle part of its short-term credit into long-term loans, including the credit repaid after the balance sheet date, in the amount of approximately NIS 289 million, as described in Note 5c below.
Note 2: - Significant Accounting Policies
Basis of Preparation of the Consolidated Interim Financial Statements
The consolidated interim financial statements are prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods as set out in International Accounting Standard 34 - "Interim Financial Reporting" and in accordance with the disclosure requirements under Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970.
The accounting policy applied in the preparation of the consolidated interim financial statements is consistent with that applied in the preparation of the annual consolidated financial statements.
Note 3: - Financial Instruments
Fair Value
The table below details the balance and fair value of groups of financial instruments presented in the financial statements that are not presented at their fair value or whose carrying amount is not an approximation of fair value, in NIS thousands:
| Fair value and carrying amount | Carrying amount | Fair Value | ||||
|---|---|---|---|---|---|---|
| March 31 | March 31 | December 31 | March 31 | March 31 | December 31 | |
| 2026 | 2025 | 2025 | 2026 | 2025 | 2025 | |
| Unaudited | Unaudited | Audited | Unaudited | Unaudited | Audited | |
| Financial assets | ||||||
| Receivables regarding franchise arrangements (1) | 234,910 | 248,267 | 239,789 | 224,088 | 236,001 | 233,219 |
| Financial liabilities | ||||||
| Fixed-interest loans (1) | 4,303,011 | 4,244,647 | 4,194,153 | 4,130,501 | 4,016,919 | 4,074,537 |
| BONDS (2) | 5,442,705 | 5,239,544 | 5,670,806 | 5,457,139 | 5,165,707 | 5,706,449 |
| 9,745,716 | 9,484,191 | 9,864,959 | 9,587,640 | 9,182,626 | 9,780,986 |
(1) The fair value of loans received and receivables regarding franchise arrangements bearing fixed interest is based on the calculation of the present value of cash flows according to the interest rate acceptable for similar loans with similar characteristics (Level 3 in the fair value hierarchy).
(2) The fair value is based on quoted prices in an active market (Level 1 in the fair value hierarchy) for the reporting date.
The balance in the financial statements of cash and cash equivalents, short-term investments, customers, receivables and debit balances, credit from banking corporations and loans from others at variable interest, liabilities to suppliers and service providers and creditors and credit balances corresponds or is close to their fair value.
Note 4: - Segment Reporting
a. General
As stated in the annual consolidated financial statements, the Group has the following operating segments: construction and infrastructure contracting in Israel, industries, residential for rent, franchising, international operations through Ashtrom International, renewable energy, investment real estate and entrepreneurship through Ashtrom Properties and residential real estate entrepreneurship in Israel through Ashtrom Residential.
The data for the operating sectors of industries, investment real estate and entrepreneurship through Ashtrom Properties and residential real estate entrepreneurship in Israel also include the Company's proportionate share in the income and results of associated companies with the same nature of activity as the sector in which they are held, in order to align the reported data with management's approach.
5/27/2026 | 5:30:12 AM | v1.2.5
Notes to the Condensed Consolidated Interim Financial Statements
Note 4: - Segment Reporting (Continued)
B. Reporting on operating segments
For the three-month period ended March 31, 2026 (Unaudited)
| Reporting on operating segments | Construction Building and Infrastructure in Israel | Industries | Residential for Rent | Concessions | International Activity - Ashtrom International | Renewable Energy | Investment Property and Entrepreneurship - Ashtrom Properties | Residential Real Estate Entrepreneurship in Israel - Ashtrom Residence | Total before adjustments | Adjustments | Adjustments regarding associates | Total |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues from external customers | 511,663 | 247,842 | 28,408 | 4,978 | 68,327 | 12,459 | 137,930 | 218,909 | 1,230,516 | - | (108,088) | 1,122,428 |
| Inter-segment revenues | 110,418 | 38,493 | - | - | - | 3,615 | 284 | - | 152,810 | (152,389) | (421) | - |
| Total revenues | 622,081 | 286,335 | 28,408 | 4,978 | 68,327 | 16,074 | 138,214 | 218,909 | 1,383,326 | (152,389) | (108,509) | 1,122,428 |
| Cost of revenues | 575,564 | 244,351 | 3,237 | 4,602 | 47,663 | 8,881 | 42,755 | 188,234 | 1,115,287 | (143,912) | (72,382) | 898,993 |
| Gross profit | 46,517 | 41,984 | 25,171 | 376 | 20,664 | 7,193 | 95,459 | 30,675 | 268,039 | (8,477) | (36,127) | 223,435 |
| Increase (decrease) in value of investment property | - | - | (50,169) | - | 409 | - | (3,297) | - | (53,057) | 6,704 | (53) | (46,406) |
| Selling and marketing expenses | 1,506 | 19,098 | 2,548 | - | 1,021 | - | - | 7,750 | 31,923 | - | (1,957) | 29,966 |
| General and administrative expenses | 31,304 | 15,129 | 4,434 | 4,892 | 10,876 | 2,233 | 26,895 | 12,039 | 107,802 | 131 | (5,385) | 102,548 |
| Net income from tax credits | - | - | - | - | 8,047 | - | - | - | 8,047 | - | - | 8,047 |
| Operating profit (loss) | 13,707 | 7,757 | (31,980) | (4,516) | 9,176 | 13,007 | 65,267 | 10,886 | 83,304 | (1,904) | (28,838) | 52,562 |
| Share of profits of associates | 8,342 | |||||||||||
| Other expenses | 10,370 | |||||||||||
| Operating profit | 50,534 | |||||||||||
| Financing expenses, net | 96,843 | |||||||||||
| Loss before taxes on income | (46,309) |
Notes to the Condensed Consolidated Interim Financial Statements
Note 4: - Segment Reporting (Continued)
For the three-month period ended March 31, 2025 (Unaudited)
| Reporting on operating segments | Construction Building and Infrastructure in Israel | Industries | Residential for Rent | Concessions | International Activity - Ashtrom International | Renewable Energy | Investment Property and Entrepreneurship - Ashtrom Properties | Residential Real Estate Entrepreneurship in Israel - Ashtrom Residence | Total before adjustments | Adjustments | Adjustments regarding associates | Total |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues from external customers | 580,787 | 240,583 | 25,639 | 4,811 | 69,496 | 11,616 | 121,421 | 184,335 | 1,238,688 | - | (85,681) | 1,153,007 |
| Inter-segment revenues | 56,746 | 45,011 | - | - | - | - | 216 | - | 101,973 | (101,846) | (127) | - |
Note 4: - Segment Reporting (Continued)
For the year ended December 31, 2025 (Audited)
Ashtrom Group Ltd. Notes to the Condensed Consolidated Interim Financial Statements
Note 5: - Material events during the reporting period and thereafter
A: As stated in Note 12A(1) of the annual financial statements regarding the project in Neve Ayalon Or Yehuda, the construction works of the project were completed during the first quarter of the year, and the partnership paid the seller the remaining cost of approximately 131 million NIS. For the purpose of paying the remaining cost, an additional total of 86 million NIS was received from the institutional body that finances the project. By the date of approval of the financial statements, lease agreements for all residential units were signed and their leasing began. In view of this, the remaining cost of the project was reclassified from the item payments on account of investment property to the investment property item at a value of approximately 582 million NIS, in accordance with a valuation performed by an independent external appraiser, and therefore the Company recorded in the consolidated statements of profit or loss a value reduction in the amount of approximately 46 million NIS.
B: As stated in Note 12A(2) of the annual financial statements, in December 2025, a limited partnership under the full control of the Company won a tender by Dira LeHaskir and the ILA to lease land in Tel Hashomer, Ramat Gan ('Doctors' Housing' complex) for the purpose of planning, construction, sale and operation of a residential project including 1,189 residential units and approximately 23,000 sqm of commercial and employment areas, all in a total area of approximately 202,000 sqm. Of the residential units in the project, 190 units are intended for sale, 399 units are intended for long-term rental for 20 years (where 25% of these units will be leased to eligible individuals at a controlled price) and 600 units are intended for rental for 40 years to medical staff at a reduced rent in accordance with the terms of the tender.
In accordance with the terms of the partnership's bid in the tender, the partnership will lease the land (including development costs) for a total of approximately 394 million NIS (excluding VAT). According to the Company's assessment, the scope of investment in the project is expected to total approximately 2.2 billion NIS and will be financed from the Company's independent sources and through external financing.
On March 22, 2026, a framework agreement was signed between the partnership and a banking corporation to finance the land purchase for the project in the amount of approximately 366 million NIS. The framework will be provided to the partnership until April 2029. The Company provided a guarantee to the banking corporation for the framework. Under the agreement, the partnership's rights in the project will be pledged to the banking corporation.
In the first quarter of the year, the Company paid a total of 244 million NIS plus VAT mainly through a draw-down under the agreement with the banking corporation. The balance of approximately 150 million NIS plus VAT will be paid in December 2027. In the financial statements as of March 31, 2026, a total of approximately 142 million NIS for the part intended for sale is presented in the item lands for construction and a total of approximately 118 million NIS is presented in the item payments on account of investment property.
On February 9, 2026, a notice was received by the Company from the Administrative Affairs Court in Tel Aviv-Jaffa, in which the court ordered the joining of the Company as a respondent to an administrative petition filed by a third party against the State of Israel - Israel Land Authority and the Ministry of Defense, among others, in connection with the land that is the subject of the Doctors' Housing tender.
According to the claims in the petition, the petitioners, heirs of historical rights holders in the land, claim that the land was taken in the past for public needs, and that with the change of its designation to commercial designations and the abandonment of the public purpose, they have a right of restitution and/or a right of first refusal to purchase, and alternatively a claim for financial relief. It was further claimed that the marketing of the land within the tender to third parties was done illegally, instead of approaching the petitioners and providing an opportunity to exercise their alleged rights. The state respondents to the petition received, with the Company's consent, an extension for filing responses to the petition and for a hearing on the matter in court and they intend to request a further extension.
The Company is examining the claims in the petition and its possible implications for the project that is the subject of the tender, but at this stage, before the statement of response has been filed, it and its legal advisors are unable to estimate the chances of the petition. It should be clarified that the Company is not a party to the dispute that is the subject of the petition, and its joining to the proceeding was done at the court's request given its being the winner of the tender.
5/27/2020 | 5:50:13 AM | v1.2.5
Notes to the Interim Consolidated Financial Statements NIS in thousands
Note 5: - Material events during and after the reporting period (Continued)
C. During February 2026, a wholly-owned English subsidiary of Ashtrom Properties signed for the acquisition of a commercial property located in the Newcastle area, England, for a total of approximately 102.5 million pounds (approximately 435 million NIS), including transaction costs. The property area is approximately 36 thousand square meters and includes approximately 1,061 shops. The property is leased at 97% occupancy to approximately 31 tenants. The acquisition of the property was financed from equity and an interim loan amounting to 65% of the purchase value which was repaid after the balance sheet date and replaced by a loan from a banking corporation in England, whose expected repayment date is in May 2029.
D. On February 5, 2026, Ashtrom Residential received a judgment from the Appeals Committee under the Real Estate Taxation Law (Appreciation and Purchase), 1963, at the Haifa District Court, which accepted the appeals filed by Ashtrom Residential against the taxation managers of the Haifa and Central districts and determined that its win in the "Mechir Lamishtaken" tenders and the signing of the accompanying agreement system do not constitute an acquisition of a "right in real estate" as defined in the Real Estate Taxation Law and that in practice, the true legal essence of the engagement between the State and Ashtrom Residential, following the win in the "Mechir Lamishtaken" tenders, is an engagement with a performing contractor, acting in the name and on behalf of the State for the purpose of implementing its policy within the framework of "Mechir Lamishtaken" projects and their execution. Within the framework of the judgment, it was determined that Ashtrom Residential is not liable for purchase tax for the land component for the housing units intended for "Mechir Lamishtaken" in the relevant projects and that the respondents must cancel the purchase tax assessments and return to Ashtrom Residential the purchase tax paid by it for the Mechir Lamishtaken housing units in connection with the tenders subject of the appeals.
According to the Company's estimation, and based on the judgment, as long as the decision of the Appeals Committee stands and is implemented, the Company is expected to receive a refund of the purchase tax paid by it in connection with the tenders subject of the appeals and to recognize a profit (for projects which were charged to the profit and loss statement) in a financial scope of approximately 38 million NIS. It should be emphasized that the date of the refund, its final scope, the date of profit recognition, and their accounting implications in the Company's reports will be affected, among other things, by possible additional proceedings and by the decisions of the Tax Authority regarding the implementation of the judgment. The Tax Authority is entitled to file an appeal to the Supreme Court until mid-June 2026. Since, according to publications, the Tax Authority intends to appeal the aforementioned decision, the Company has not yet recognized a profit for the expected refund.
E. As stated in Note 16E to the annual financial statements regarding the EL PATRIMONIO renewable energy project in the USA, on March 11, 2026, a subsidiary of Ashtrom Energy entered into an agreement with a banking corporation for the financing of the project in the scope of approximately 190-200 million US dollars. According to the financing agreement, the lender will provide the subsidiary with a loan and a guarantee framework, in the format of PROJECT FINANCE, NON-RECOURSE to the Company for the construction period (which is expected to continue until 2027) and which will be converted near the commercial operation of the project to a loan for a period of 2 years with extension options for an additional 3 years according to the lender's decision. In addition, the lender will provide a framework for the provision of guarantees for the project.
On the same day, Ashtrom Energy entered into an agreement with an American institutional body for the sale of the project's tax credits for a period of approximately 10 years from the date of the project's operation and in a total amount of approximately 135-140 million US dollars.
F. On March 24, 2026, the Company's Board of Directors approved a dividend distribution to the Company's shareholders in a total amount of 100 million NIS, reflecting a dividend amount per share of approximately 0.89663 NIS. The dividend was paid on April 15, 2026.
G. After the balance sheet date, on April 30, 2026, Maalot published a rating report in which the Company's rating was updated to ILA/STABLE for the Company and an ILA rating for the BONDS.
Notes to the Interim Consolidated Financial Statements
NIS in thousands
Note 6: - Summarized information of an associate accounted for using the equity method
Summarized information from the statement of financial position and the statement of profit or loss of the company - Hutzot Hamifratz Ltd., in NIS thousands:
| As of March 31 2026 Unaudited | As of March 31 2025 Unaudited | As of December 31 2025 Audited | |
|---|---|---|---|
| Current assets | 39,683 | 18,589 | 20,464 |
| Non-current assets | 1,790,208 | 1,678,506 | 1,790,214 |
| Current liabilities | 12,529 | 11,144 | 11,697 |
| Non-current liabilities | 652,671 | 629,955 | 651,405 |
| Equity attributable to Company shareholders | 1,164,691 | 1,055,996 | 1,147,576 |
| Holding rate in associate | 50% | 50% | 50% |
| Excess cost | 7,002 | 7,002 | 7,002 |
| Investment balance in associate | 589,348 | 535,000 | 580,790 |
| For the 3 months ended March 31, 2026 Unaudited | For the 3 months ended March 31, 2025 Unaudited | For the year ended December 31 2025 Audited | |
| --- | --- | --- | --- |
| Revenue | 27,564 | 23,936 | 106,029 |
| Gross profit | 25,092 | 21,329 | 97,238 |
| Appreciation of investment property | 1,707 | 1,909 | 97,882 |
| Net profit | 17,115 | 14,282 | 130,862 |
| Holding rate in associate | 50% | 50% | 50% |
| Excess cost adjustments | - | - | - |
| Company's share in profits of associate | 8,558 | 7,141 | 65,431 |
The Company did not attach the financial statements of Hutzot Hamifratz Ltd. because they are insignificant relative to the Company's consolidated financial statements and they do not add significant information relative to the information included for this company.
As of March 31, 2026
Unaudited
Kost Forer Gabbay & Kasierer Tel. +972-3-6232525
144 Menachem Begin Road, Fax +972-3-5622555
Tel-Aviv 6492102 ey.com
To
The Shareholders of Ashtrom Group Ltd.
Subject: Special Auditor's Report on Separate Interim Financial Information pursuant to Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970
Introduction
We have reviewed the separate interim financial information presented according to Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970 of Ashtrom Group Ltd. (hereinafter - the Company), as of March 31, 2026, and for the three-month period ended on that date. The separate interim financial information is the responsibility of the Company's Board of Directors and Management. Our responsibility is to express a conclusion on the separate interim financial information for this interim period based on our review.
We did not review the separate interim financial information from the financial statements of investees whose assets minus liabilities attributed to them, net, totaled approximately 934 million NIS as of March 31, 2026, and whose Company's share in the profits of these companies totaled approximately 11 million NIS for the three-month period ended on that date. The financial statements of those companies were reviewed by other accountants whose reports were provided to us, and our conclusion, insofar as it relates to the financial statements for those companies, is based on the review reports of the other accountants.
Scope of Review
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 separate 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 and the review reports of other accountants, nothing has come to our attention that causes us to believe that the aforementioned separate interim financial information is not prepared, in all material respects, in accordance with the provisions of Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970.
Tel-Aviv,
May 26, 2026
Kost Forer Gabbay & Kasierer
Accountants
S/27/2026 | 5:30:15 AM | v1.2.5
Kost Forer Gabbay & Kasierer Tel. +972-3-6232525
144 Menachem Begin Rd., Fax +972-3-5622555
Tel-Aviv 6492102 ey.com
To
The Shareholders of Ashtrom Group Ltd.
Re: Special Review Report of the Auditor on Separate Interim Financial Information under Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970
Introduction
We have reviewed the separate interim financial information presented according to Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970 of Ashtrom Group Ltd. (hereinafter - the Company), as of March 31, 2026, and for the three-month period then ended. The separate interim financial information is the responsibility of the Company's Board of Directors and management. Our responsibility is to express a conclusion on the separate interim financial information for this interim period based on our review.
We did not review the separate interim financial information from the financial statements of investees, the assets less liabilities attributed to which, net, amounted to approximately NIS 934 million as of March 31, 2026, and the Company's share in the profits of these companies amounted to approximately NIS 11 million for the three-month period then ended. The financial statements of those companies were reviewed by other accountants whose reports were furnished to us, and our conclusion, insofar as it relates to the financial statements for those companies, is based on the review reports of the other accountants.
Scope of Review
Conclusion
Tel-Aviv,
May 26, 2026
Kost Forer Gabbay & Kasierer
Accountants
Special Report according to Regulation 38D
Financial data and financial information from the interim consolidated financial statements attributed to the Company
The following are financial data and separate financial information attributed to the Company from the consolidated interim financial statements of the group as of March 31 2024 published as part of the Periodic reports (hereinafter - consolidated reports), presented in accordance with Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970.
Ashtrom Group Ltd.
Financial data from the consolidated statements of financial position attributed to the Company
NIS in thousands
| Financial data from the consolidated statements of financial position attributed to the Company | As of March 31 2026
Unaudited | As of March 31 2025
Unaudited | As of December 31 2025
Audited |
| --- | --- | --- | --- |
| Current assets | | | |
| Cash and cash equivalents | 55,332 | 245,431 | 158,720 |
| Short-term investments | 117,782 | 32,465 | 161,221 |
| Receivables and income receivable | 225,200 | 197,626 | 218,916 |
| Debtors and debit balances | 44,774 | 41,223 | 43,475 |
| Current balances with investees | 412,321 | 276,642 | 357,458 |
| Inventory of buildings for sale | 127,896 | - | - |
| Inventory | 811 | 982 | 831 |
| Total current assets | 984,116 | 794,369 | 940,621 |
| Non-current assets | | | |
| Investment in investees | 6,862,003 | 6,548,500 | 6,808,113 |
| Financial data from the consolidated statements of financial position attributed to the Company | As of March 31 2026 Unaudited | As of March 31 2025 Unaudited | As of December 31 2025 Audited |
|---|---|---|---|
| Loans and capital notes to investees | 988,369 | 1,266,520 | 1,011,467 |
| Land for construction | - | 102,758 | 123,833 |
| Receivables in respect of franchise arrangements | 40,610 | 49,914 | 43,289 |
| Other debts and investments | 73,280 | 71,450 | 73,172 |
| Fixed assets | 866,207 | 865,928 | 853,391 |
| Total non-current assets | 8,830,469 | 8,905,070 | 8,913,265 |
| Total assets | 9,814,585 | 9,699,439 | 9,853,886 |
The attached additional information constitutes an integral part of the financial data and the separate financial information.
4
Financial data from the consolidated statements of financial position attributed to the Company
The attached additional information constitutes an integral part of the financial data and the separate financial information.
Avraham Nussbaum
Chairman of the Board
Gil Giron
CEO and Director
Gal Omer
CFO
Yeshayahu Abramovitz
Chief Accountant
Date of approval of the financial statements: May 26, 2026
Financial data from the consolidated statements of profit or loss attributed to the Company
| Financial data from the consolidated statements of profit or loss attributed to the Company | For the 3 months ended March 31, 2026 Unaudited | For the 3 months ended March 31, 2025 Unaudited | For the year ended December 31, 2025 Audited |
|---|---|---|---|
| Revenues | 239,752 | 154,147 | 715,111 |
| Cost of revenues | 217,455 | 128,249 | 631,938 |
| Gross profit | 22,297 | 25,898 | 83,173 |
| Selling, general and administrative expenses | 25,336 | 22,694 | 95,373 |
| Other expenses, net | 7,730 | 142 | 8,789 |
| Operating profit (loss) | (10,769) | 3,062 | (20,989) |
| Financing income | 22,572 | 21,491 | 71,830 |
| Financing expenses | (33,554) | (40,640) | (203,080) |
| Company's share in profits of investees, net | (14,971) | 9,221 | 425,291 |
| Profit (loss) before taxes on income (tax benefit) | (36,722) | (6,866) | 273,052 |
| Taxes on income (tax benefit) | 348 | (9,671) | 2,397 |
| Net profit (loss) attributed to the Company | (37,070) | 2,805 | 270,655 |
5/27/2026 | 5:30:16 AM | v1.2.5
Financial data from the consolidated reports on the total comprehensive income
Ashtrom Group attributed to the company
Ltd
| Financial data from the consolidated reports on the total comprehensive income attributed to the company | For the 3 months ended March 31, 2026 | For the 3 months ended March 31, 2025 | For the year ended December 31 2025 |
|---|---|---|---|
| Unaudited | Unaudited | Audited | |
| Net profit (loss) attributed to the company | (37,070) | 2,805 | 270,655 |
| Other comprehensive income (loss) attributed to the company (after tax effect): | |||
| Amounts that are classified or will be classified in the future to profit and loss, net of tax: | |||
| Gain (loss) from cash flow hedging transactions | 1,830 | (19,193) | (13,214) |
| Company's share in other comprehensive income (loss) of investee companies | (64,875) | 119,381 | (173,813) |
| (63,045) | 100,188 | (187,027) | |
| Amounts that will not be classified to profit and loss, net of tax: | |||
| Loss from remeasurement for defined benefit plans, net | - | - | 268 |
| Company's share in other comprehensive income of investee companies | 709 | 766 | 6,255 |
| 709 | 766 | 6,523 | |
| Total other comprehensive income (loss) attributed to the company | (62,336) | 100,954 | (180,504) |
| Total comprehensive income (loss) attributed to the company | (99,406) | 103,759 | 90,151 |
The accompanying additional information constitutes an integral part of the financial data and the separate financial information.
Ashtrom Group
Ltd
Financial data from the consolidated reports on the cash flows attributed to the
company
| Financial data from the consolidated reports on the cash flows attributed to the company | For the 3 months ended March 31, 2026 Unaudited | For the 3 months ended March 31, 2025 Unaudited | For the year ended December 31 2025 Audited |
|---|---|---|---|
| Cash flows from operating activities of the company |
| Financial data from the consolidated reports on the cash flows attributed to the company | For the 3 months ended March 31, 2026 Unaudited | For the 3 months ended March 31, 2025 Unaudited | For the year ended December 31 2025 Audited |
|---|---|---|---|
| Net profit (loss) attributed to the company | (37,070) | 2,805 | 270,655 |
| Adjustments required to present cash flows from operating activities of the company: Adjustments to profit or loss items of the company: | |||
| Loss (profit) in respect of investee companies | 14,971 | (9,221) | (425,291) |
| Interest costs | 17,564 | 19,600 | 101,753 |
| Gain from marketable securities | (7,939) | (1,238) | (3,977) |
| Revaluation of long-term loans to associated companies | (6,958) | (6,433) | (25,406) |
| Erosion of long-term loans | (168) | 533 | 3,857 |
| Revaluation of BONDS | 4,907 | 14,192 | 84,609 |
| Loss (profit) from debtors in respect of franchise arrangement | 49 | (167) | (1,371) |
| Increase in value of long-term debts | (89) | (583) | (1,533) |
| Loss from impairment of investments | - | 2 | 2 |
| Loss from realization of fixed assets | - | - | 45 |
| Depreciation and amortization | 5,109 | 5,346 | 21,096 |
| Taxes on income (tax benefit) | 348 | (9,671) | 2,397 |
| Change in liabilities for employee benefits, net | 390 | 1,515 | 3,872 |
| Cost of share-based payment | 785 | 942 | 3,672 |
| Total | 28,969 | 14,817 | (236,275) |
| Changes in asset and liability items of the company: | |||
| Increase in trade receivables and income receivable | (6,284) | (41,782) | (63,072) |
| Increase in debtors and debit balances | (100,869) | (53,390) | (17,362) |
| Increase (decrease) in advances from customers | 8,480 | (2,555) | 4,747 |
| Decrease in subcontractors and suppliers | (1,788) | (18,219) | (18,428) |
| Increase (decrease) in payables and credit balances | 12,573 | (1,155) | (1,854) |
| Decrease (increase) in inventory | 20 | (45) | 106 |
| Total | (87,868) | (117,146) | (95,863) |
| Cash paid and received during the period in the company for: | |||
| Dividend received | 40,000 | - | 30,000 |
| Taxes received (paid) | (34) | (397) | (450) |
| Net cash used for operating activities of the company before investment in land for construction | (56,003) | (99,921) | (31,933) |
| Investment in land | (2,160) | (277) | (16,381) |
| Net cash used for operating activities | (58,163) | (100,198) | (48,314) |
The accompanying additional information constitutes an integral part of the financial data and the separate financial information.
Ashtrom Group Ltd
Financial data from the consolidated reports on the cash flows attributed to the company
Additional Information
Ashtrom Group Ltd
1. General
A. This separate financial information is prepared in a condensed format for March 31, 2026, and for a period of three months ended on that date, in accordance with the provisions of Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970. This separate financial information should be reviewed in the context of the separate financial information on the consolidated annual financial statements of the company for December 31, 2025, and for the year ended on that date and the additional information accompanying them.
B. As of March 31, 2026, the company has a deficit in working capital (in the solo report) in the amount of approximately NIS 598 million, resulting mainly from current maturities of non-current liabilities. In the opinion of the company's Board of Directors, the deficit in working capital does not indicate a liquidity problem and that the company is able to meet its financial obligations as they fall due. This assumption is based, among other things, on the company's cash forecast for the two years following the date of publication of the financial statements, on the company's ability to generate cash from operating activities, on the company's funding sources and the ability to raise credit and on unused credit facilities.
2. Significant Accounting Policies
The accounting policy implemented in preparing this separate financial information is consistent with that applied in preparing the separate financial information as of December 31, 2025, and for the year ended on that date.
3. Significant Events during and after the Reporting Period
A. On March 24, 2026, the company's Board of Directors approved a dividend distribution to the company's shareholders in a total amount of NIS 100 million, reflecting a dividend amount per share of approximately NIS 0.89663. The dividend was paid on April 15, 2026.
B. After the balance sheet date, on April 30, 2026, Maalot published a rating report in which the company's rating was updated to ILA/STABLE for the company and an ILA rating for the BONDS.
921326\M\26\3-Ashtrom Group-IFRS-Solo.docx
5/27/2026 | 5:30:17 AM | v1.2.5
Kost Forer Gabbay & Kasierer
144 Menachem Begin St.,
Tel-Aviv 6492102
Tel. +972-3-6232525
Fax +972-3-5622555
ey.com
May 26, 2026
To
The Board of Directors of
Ashtrom Group Ltd.
Dear Sirs,
Subject: Consent letter for the inclusion of the report of the independent accountant/accountants in the shelf offering report regarding a shelf prospectus
We hereby inform you that we agree to the inclusion (including by way of reference) of our reports detailed below in the shelf offering report regarding the shelf prospectus from the month of:
(1) The report of the independent accountant/accountants dated regarding the interim consolidated financial statements of the Company as of March 31, 2026 and for the three-month period ended on that date.
(2) A special report of the independent accountant/accountants dated regarding the separate financial information of the Company according to Regulation 9C of the Securities Regulations (Periodic report and Immediate Reports), 1970 as of March 31, 2026 and for the three-month period ended on that date.
Kost Forer Gabbay & Kasierer
Accountants
| Report on the Effectiveness of Internal Control
Quarterly report on the effectiveness of internal control over financial reporting and disclosure
according to Regulation 38C(a) of the Securities Regulations (Periodic report and Immediate Reports), 1970:
Management, under the supervision of the Board of Directors of Ashtrom Group Ltd. (hereinafter: "the Corporation"), is responsible for the determination and existence of adequate internal control over financial reporting and disclosure in the Corporation.
In this regard, the members of management are:
- Gil Giron, CEO;
- Gal Omer, CFO.
- Yeshayahu Abramovich, Chief Accountant.
Internal control over financial reporting and disclosure includes controls and procedures existing in the Corporation, which were designed by the General Manager and the most senior officer/officers in the field of finance or under their supervision or by whoever actually performs the said functions, under the supervision of the Board of Directors of the Corporation, and which are intended to provide a reasonable degree of assurance regarding the reliability of financial reporting and the preparation of the reports in accordance with the provisions of the law, and to ensure that information that the Corporation is required to disclose in the reports it publishes according to the provisions of the law is collected, processed, summarized and reported at the time and in the format prescribed by law.
Internal control includes, among other things, controls and procedures designed to ensure that information that the Corporation is required to disclose as stated, is accumulated and transferred to the Corporation's management, including the General Manager and the most senior officer/officers in the field of finance or whoever actually performs the said functions, in order to enable decision-making at the appropriate time, with reference to the disclosure requirement.
Due to its inherent limitations, internal control over financial reporting and disclosure is not intended to provide absolute assurance that a misleading presentation or omission of information in the reports will be prevented or detected.
In the annual report regarding the effectiveness of internal control over financial reporting and disclosure which was attached to the Periodic report for the period ended December 31, 2025 (hereinafter: "the Last Annual Report on Internal Control"), the Board of Directors and Management assessed the internal control in the Corporation; based on this assessment, the Board of Directors and Management of the Corporation reached the conclusion that the said internal control, as of December 31, 2025, is effective.
Until the date of the report, no event or matter has been brought to the attention of the Board of Directors and Management that would change the assessment of the effectiveness of internal control, as found in the Last Report on Internal Control;
As of the date of the report, based on the assessment of the effectiveness of internal control in the Last Report on Internal Control, and based on information brought to the attention of Management and the Board of Directors as stated above, the internal control is effective.
| Report on the Effectiveness of Control
Executive Certification
CEO Declaration according to Regulation 38C(d)(1) of the Securities Regulations (Periodic report and Immediate Reports), 1970:
I, Gil Giron, declare that:
(1) I have examined the quarterly report of Ashtrom Group Ltd. (hereinafter: "the Corporation") for the first quarter of 2026 (hereinafter: "the Reports");
(2) To my knowledge, the Reports do not include any incorrect representation of a material fact and do not lack a representation of a material fact necessary so that the representations included in them, in light of the circumstances in which those representations were included, will not be misleading with reference to the period of the Reports;
(3) To my knowledge, the financial statements and other financial information included in the Reports fairly reflect, in all material respects, the financial position, results of operations and cash flows of the Corporation for the dates and periods to which the Reports relate;
(4) I have disclosed to the Corporation's independent accountant/accountants, the Board of Directors and the Audit Committee of the Corporation's Board of Directors, based on my most recent assessment of the internal control over financial reporting and disclosure:
(a) All significant deficiencies and material weaknesses in the determination or operation of the internal control over financial reporting and disclosure which are reasonably likely to adversely affect the Corporation's ability to collect, process, summarize or report financial information in a way that casts doubt on the reliability of the financial reporting and the preparation of the financial statements in accordance with the provisions of the law; and also -
(b) Any fraud, whether material or not material, involving the General Manager or those directly subordinate to him or involving other employees who have a significant role in the internal control over financial reporting and disclosure;
(5) I, alone or together with others in the Corporation:
(a) Determined controls and procedures, or ensured the determination and existence under my supervision of controls and procedures, designed to ensure that material information relating to the Corporation, including its consolidated companies as defined in the Securities Regulations (Annual Financial Statements), 2010, is brought to my attention by others in the Corporation and the consolidated companies, particularly during the preparation period of the Reports; and also-
(b) Determined controls and procedures, or ensured the determination and existence under my supervision of controls and procedures, designed to provide reasonable assurance as to the reliability of financial reporting and the preparation of financial statements in accordance with the provisions of law, including in accordance with accepted accounting principles;
(c) No event or matter has been brought to my attention that occurred during the period between the date of the last quarterly report and the date of this report, which would change the conclusion of the Board of Directors and Management regarding the effectiveness of the internal control over financial reporting and disclosure of the Corporation.
Nothing in the above shall derogate from my responsibility or the responsibility of any other person, according to any law.
26.05.2026
Date
Gil Giron, CEO
Report on the Effectiveness of Control
Executive Certification
Declaration of the most senior officer/officers in the field of finance according to Regulation 38C(d)(2) of the Securities Regulations (Periodic report and Immediate Reports), 1970:
I, Gal Omer, declare that:
(1) I have examined the interim financial statements and other financial information included in the reports for the interim period of Ashtrom Group Ltd. (hereinafter: "the Corporation") for the first quarter of 2026 (hereinafter: "the Reports" or "the Interim Reports");
(2) To my knowledge, the interim financial statements and the other financial information included in the reports for the interim period do not include any incorrect representation of a material fact and do not lack a representation of a material fact necessary so that the representations included in them, in light of the circumstances in which those representations were included, will not be misleading with reference to the period of the reports;
(3) To my knowledge, the interim financial statements and the other financial information included in the reports for the interim period fairly reflect, in all material respects, the financial position, results of operations and cash flows of the Corporation for the dates and periods to which the reports relate;
(4) I have disclosed to the Corporation's independent accountant/accountants, the Board of Directors and the Audit Committee of the Corporation's Board of Directors, based on my most recent assessment of the internal control over financial reporting and disclosure:
(a) All significant deficiencies and material weaknesses in the determination or operation of the internal control over financial reporting and disclosure as it relates to the interim financial statements and the other financial information included in the reports for the interim period, which are reasonably likely to adversely affect the Corporation's ability to collect, process, summarize or report financial information in a way that casts doubt on the reliability of the financial reporting and the preparation of the financial statements in accordance with the provisions of the law; and also -
(b) Any fraud, whether material or not material, involving the General Manager or those directly subordinate to him or involving other employees who have a significant role in the internal control over financial reporting and disclosure;
(5) I, alone or together with others in the Corporation-
(a) Determined controls and procedures, or ensured the determination and existence under our supervision of controls and procedures, designed to ensure that material information relating to the Corporation, including its consolidated companies as defined in the Securities Regulations (Annual Financial Statements), 2010, is brought to my attention by others in the Corporation and the consolidated companies, particularly during the preparation period of the reports; and also-
(b) Determined controls and procedures, or ensured the determination and existence under my supervision of controls and procedures, designed to provide reasonable assurance as to the reliability of financial reporting and the preparation of financial statements in accordance with the provisions of law, including in accordance with accepted accounting principles;
(c) No event or matter has been brought to my attention that occurred during the period between the date of the last quarterly report, relating to the interim financial statements and any other financial information included in the reports for the interim period, which would change, in my assessment, the conclusion of the Board of Directors and Management regarding the effectiveness of the internal control over financial reporting and disclosure of the Corporation.
Nothing in the above shall derogate from my responsibility or the responsibility of any other person, according to any law.
26.05.2026
Date
Gal Omer, CFO
5/27/2026 | 5:30:18 AM | v1.2.5
| Control Effectiveness Report
Managers' Declaration
Declaration of the senior officer in the field of finance pursuant to Regulation 38C(d)(2) to the Securities Regulations (Periodic and Immediate Reports), 1970:
I, Yeshayahu Abramovich, declare that:
(1) I have reviewed the interim financial statements and the other financial information included in the interim reports of Ashtrom Group Ltd. (hereinafter: "the Corporation") for the first quarter of 2026 (hereinafter: "the Reports" or "the Interim Reports");
(2) To the best of my knowledge, the interim financial statements and the other financial information included in the interim reports do not include any misrepresentation of a material fact and do not lack a representation of a material fact necessary so that the representations included therein, in light of the circumstances in which such representations were included, will not be misleading with respect to the period of the reports;
(3) To the best of my knowledge, the interim financial statements and the other financial information included in the interim reports fairly reflect, in all material respects, the financial position, results of operations, and cash flows of the Corporation for the dates and periods to which the reports refer;
(4) I have disclosed to the Corporation's auditor, the Board of Directors, and the Audit Committee of the Corporation's Board of Directors, based on my most recent evaluation of the internal control over financial reporting and disclosure:
(b) Any fraud, whether material or not, involving the General Manager or those reporting directly to him or involving other employees who have a significant role in the internal control over financial reporting and disclosure;
(5) I, alone or together with others in the Corporation-
(a) Determined controls and procedures, or ensured the determination and existence under our supervision of controls and procedures, designed to ensure that material information relating to the Corporation, including its consolidated companies as defined in the Securities Regulations (Annual Financial Statements), 2010, is brought to my knowledge by others in the Corporation and in the consolidated companies, particularly during the preparation period of the reports; and-
(c)
No event or matter that occurred during the period between the date of the last quarterly report and the date of this report, relating to the interim financial statements and any other financial information included in the interim reports, has been brought to my attention, which would change, in my estimation, the conclusion of the Board of Directors and the Management regarding the effectiveness of the internal control over financial reporting and disclosure of the Corporation.
The above does not derogate from my responsibility or the responsibility of any other person, under any law.
Date
Yeshayahu Abramovich, Chief Accountant
5/27/2026 | 5:30:19 AM | v1.2.5