Orian 2025: revenue held, but the move to Hellmann and the warehouse buildout still haven’t turned into cleaner profit

Getting To Know The Company

At first glance Orian looks like a freight forwarder, but that description is now too narrow. In practice it is trying to run five linked engines under one roof: import forwarding, export forwarding, distribution and delivery, warehousing, and customer financing. The real economics are not determined only by how many files or parcels move through the system. They depend on whether freight brings in customers, warehouses and delivery sites absorb more volume, and the group can earn across the chain instead of only protecting turnover.

Some things are clearly working. Revenue stayed high at NIS 1.076 billion versus NIS 1.049 billion in 2024. Warehousing revenue grew 15% to NIS 204.9 million, distribution and delivery revenue grew 17% to NIS 302.3 million, and operating cash flow remained positive at NIS 98.9 million. This is not a business that stopped moving.

That is also exactly what can mislead a superficial reading. Growth is not translating into cleaner earnings. Operating profit fell to NIS 37.5 million from NIS 61.9 million, and the company moved to a net loss of NIS 12.6 million after a NIS 21.7 million profit in 2024. The reason is not one isolated event. It is the combination of sharp freight-margin pressure, a weaker mix in delivery, and heavy fixed costs in warehousing that still have not been absorbed well enough.

The active bottleneck going into 2026 is conversion quality, not a lack of initiatives. Orian has already opened Kiryat Malachi, already shifted from DBSCHENKER to Hellmann, already expanded delivery volumes, and already raised equity and debt to stabilize the funding side. Now it has to prove that all of that generates profit, not just activity.

There is also a practical screen that needs to be stated early. The stock is extremely illiquid. On the latest trading day shown in the market snapshot, equity turnover was only NIS 5,402. So even if the operating story improves, the market’s ability to price that improvement quickly or deeply is not obvious.

What Matters Right Away

• Revenue held up, but the profit core weakened. Import and export forwarding lost ground because of lower freight rates, lower activity in some lanes, a weaker dollar, and the end of DBSCHENKER.
• Warehousing is growing exactly where the fixed-cost burden is still heavy. Warehouse revenue rose to NIS 204.9 million, but segment gross loss deepened to NIS 8.8 million, mainly because of Kiryat Malachi.
• Distribution added volume, not quality. Revenue rose to NIS 302.3 million, but gross profit fell 37% to NIS 7.5 million because of a heavier B2C mix and higher labor and subcontractor costs.
• The year-end balance-sheet picture is weaker than it first looks, and the relief arrives only after year-end. Operating cash flow stayed positive, but cash fell to NIS 28.9 million and working capital turned negative. The real easing came only with the January 2026 bond issue.

Orian’s Economic Map

The message of that chart is straightforward: 2025 was not a collapse in turnover. It was a deterioration in the quality of that turnover. That is the core story.

Events And Triggers

The shift from DBSCHENKER to Hellmann

The end of the DBSCHENKER relationship was a structural event, not noise. The company estimates that the termination reduced 2025 import-segment revenue by about 8% and export-segment revenue by about 10%, and on a full-year activity basis the direct effect is estimated at roughly 18% of import activity and 15% of export activity. That is too large to ignore.

On the other side, the Hellmann agreement became effective on January 1, 2025 and gives Orian a replacement international network. But it is important not to confuse an operating fix with commercial proof. In import, Orian paid Hellmann about NIS 58.5 million in 2025 while receipts from Hellmann amounted to only about NIS 175 thousand. In export, payments to Hellmann were about NIS 4.7 million and receipts from Hellmann were about NIS 1.8 million. The inference is that in year one Hellmann functioned mainly as a replacement operating network, not yet as a meaningful engine of inbound global customer flow.

That is not a criticism of the agreement itself. Without Hellmann the picture would likely have been worse. But the market should measure not only whether a replacement network exists, but whether that network starts bringing profitable flow.

Kiryat Malachi became a volume anchor, but not yet a profit anchor

Kiryat Malachi is probably the single most important operating event in warehousing. The site has been active since January 2024, was fully completed in July 2024, and generated NIS 48.5 million of revenue in 2025 versus NIS 15.5 million in 2024. At the same time, occupancy at year-end was only 60%. That means the site is already large enough to generate turnover, but still not full enough to generate comfortable profitability.

Put differently, Orian took on the fixed cost of the new asset fairly quickly, while the full revenue absorption has not arrived yet. That is why Kiryat Malachi strengthens the medium-term thesis and weighs on the current report at the same time.

2025 also included an equity fix, and 2026 opened a new debt window

In February 2025 the company completed a private placement of 1,111,112 shares for total proceeds of about NIS 25 million. That supported equity, but by itself it did not solve flexibility. After the balance-sheet date, on January 19, 2026, the company issued NIS 90 million par value of Series C bonds plus 1.26 million warrants, for gross proceeds of NIS 90.9 million and net proceeds of NIS 89.936 million.

The immediate implication is that the new year starts with less short-term pressure and better refinancing capacity. The deeper implication is that funding bought time, it did not resolve the profitability question.

Efficiency, Profitability And Competition

Forwarding: lower prices, weaker air volumes, and less DBSCHENKER

Import and export forwarding are still the core of the business. Together they produced about NIS 575.7 million of revenue in 2025, more than half of the group. But this is also where the clearest damage to earnings quality showed up.

In import, revenue fell 4% to NIS 423.6 million and gross profit fell 26% to NIS 37.7 million. In export, revenue fell 13% to NIS 152.1 million and gross profit fell 25% to NIS 27.9 million. This is not random noise. The company explicitly links it to lower air and sea freight rates, lower activity in some lanes, the end of DBSCHENKER, and the weaker dollar.

What matters is that the pressure is not symmetrical. In import, sea-container activity rose, but that was not enough to offset weaker air forwarding and lower pricing. In export, even income recorded from a closing settlement with DBSCHENKER did not prevent a double-digit revenue decline. That suggests Orian’s issue is not just one customer or one agent. It is a less favorable return environment in the core forwarding engine.

Distribution: more volume, lower quality

Distribution and delivery looks positive on first read. Revenue rose 17% to NIS 302.3 million. But gross profit fell 37% to NIS 7.5 million, and in the fourth quarter the segment moved to a gross loss of NIS 967 thousand versus a NIS 2.9 million gross profit in the comparable quarter.

The company is clear about why: more parcels delivered to private recipients, where B2C profitability is lower than B2B, alongside higher labor and subcontractor costs, plus margin erosion from a global customer because of the weaker dollar. This is exactly the kind of situation where volume growth is not the same as quality growth.

That matters because Orian cannot just show more parcels, more pallets, or more kilometers. It has to show that the mix starts working in its favor again.

Warehousing: the strategic engine is still eating cost

Warehousing is growing, but it is still asking for patience. Revenue rose 15% to NIS 204.9 million, mainly because of Kiryat Malachi. At the same time segment gross loss widened to NIS 8.8 million from NIS 6.7 million in 2024.

The warehousing story is not only about Kiryat Malachi. Weighted average occupancy in 2025 was 71.7%, and actual occupancy at year-end was 71.4%. Those are not empty-system numbers, but they are also not the numbers of a network that has comfortably absorbed its fixed cost base. Kiryat Malachi was at 60%, Beit Hilkia at 54%, and the cold-storage site in Kiryat Ata at 32%.

The first chart explains why turnover did not break. The second chart explains why profit did.

That quarterly chart matters because it shows that 2025 did not end in stabilization. The fourth quarter was by far the weakest quarter of the year.

What competition implies for 2026

In warehousing the company estimates its market share at about 10% in storage-space terms and counts roughly 15 to 20 meaningful competitors. In forwarding and distribution the pressure is less about the ability to offer service and more about price, speed and terms. So Orian’s advantage is not supposed to be scale by itself. It is supposed to be the ability to connect services. If that linkage does not produce pricing power, the advantage quickly turns into system cost.

Cash Flow, Debt And Capital Structure

Cash flow: separate cash generation from cash flexibility

This is where the framing matters. On a normalized view of the existing business, operating cash flow remained fairly strong at NIS 98.9 million. That is evidence that the group still generates cash from ongoing operations.

But on an all-in cash flexibility view, which is the more relevant lens this year, the picture is much tighter. After NIS 25.7 million of investing outflow and NIS 101.7 million of financing outflow, cash fell from NIS 58.3 million to NIS 28.9 million. In other words, the business generated cash, but all of that cash and then some was absorbed by investment, repayments and financing commitments.

The company explains that the year-end negative working capital position, NIS 19.3 million, stemmed mainly from loan and bond repayments and fixed-asset investment, net of the cash raised in the private placement. At the same time, the customer-versus-supplier gap remains material: receivables were NIS 255.5 million while suppliers stood at NIS 149.4 million, a net gap of NIS 106.1 million. In this model, any pressure on forwarding or collections shows up quickly.

Debt: the pressure is not acute, but it is not trivial either

At year-end 2025, short-term bank credit stood at NIS 39.2 million, current maturities of Series B were NIS 21.8 million, and long-term bank loans were NIS 198.9 million. At the same time, lease liabilities stood at NIS 786.2 million, which is why both management and lenders prefer to evaluate much of the covenant package excluding IFRS 16.

The positive side is that excluding IFRS 16 the company ended 2025 with a 45.4% equity-to-balance-sheet ratio, NIS 380.7 million of equity, and net financial debt to EBITDA of 4.36 versus a 6.5 ceiling. In addition, Orian had short-term credit lines of about NIS 152.2 million, of which only a negligible amount was used at year-end and none was used near the report date.

The less clean side is that this comfort looks much better after January 2026 than it does inside the 2025 report itself. The Series C issuance reset the debt horizon and was aimed mainly at refinancing long-term loans. It also received outside confirmation in the form of a reaffirmed Stable ilA rating in February 2026. But banks and Series B still test net financial debt to EBITDA, while the report describes Series C through equity and equity-ratio tests of 18% and NIS 150 million. So financing flexibility improved, but operating discipline is still required.

Outlook

This is an operational proof year, not a breakout year. Anyone reading 2026 as “the debt raise solved the story” is likely missing the central point.

Four issues that will decide the year

• Hellmann has to become more than a network replacement. The agreement is in place, but its direct contribution on the receipts side is still too small.
• Kiryat Malachi has to move materially higher in occupancy. 60% at the end of 2025 is a starting point, not an end point.
• Distribution and delivery have to show that growth can be profitable again. More parcels by themselves will not solve the story.
• Financing has to remain a bridge, not the thesis. Series C bought time. The company now has to use that time for operating improvement.

What the market may miss

The most delicate point in the report is that Orian’s problem is not weak demand across the system. There is demand, there is volume, there are new assets, and there is even respectable operating cash flow. What is missing is the right connection between volume, price, mix and utilization. That means 2026 can still look good on revenue and remain problematic on profit if forwarding stays weak, if delivery remains B2C-heavy, and if Kiryat Malachi does not reach utilization levels that lower the unit cost.

Warehousing still does not offer a clean forward picture

Warehousing backlog fell to NIS 55.6 million at the end of 2025 from NIS 78.8 million at the end of 2024. That does not mean the segment is broken, but it does mean that 2025 growth has not yet translated into a wider forward revenue base. At the same time, the company now has 121 thousand net square meters of storage area, but only a 71.7% weighted average occupancy rate. That gap still needs to close.

What has to happen over the next 2 to 4 quarters

On the forwarding side, the company needs to show that the DBSCHENKER hit stops expanding and that Hellmann begins to generate more than replacement operating flow. On the warehousing side, it needs to show a meaningful rise in Kiryat Malachi occupancy and a better segment loss profile. On the delivery side, it needs to show that pricing, mix or cost actions bring gross profitability back. And on the financing side, it needs to show that Series C does not just refinance debt, but also leaves the company with a cleaner cash position through 2026.

Risks

Risk one: forwarding is still too sensitive to pricing, volumes and FX

The 2025 damage came from three directions at once: freight pricing, activity levels and the dollar. That is a reminder that part of Orian’s economics remains highly external. The company says it reviews its hedging policy on an ongoing basis and executes specific hedging transactions when needed, but the report still shows that FX moves are flowing into both operating performance and the financing line.

Risk two: the logistics assets still need to justify their carrying value

The auditors identified the impairment test for the Lev Haaretz 1 and Lev Haaretz 2 cash-generating unit as a key audit matter. The carrying value of the unit’s net operating assets stood at NIS 136.6 million, and the test relied on assumptions around future cash flow, growth, EBITDA and discount rate. This does not mean there is an immediate asset-value problem, but it does mean the existing logistics centers still rest on operating assumptions that need to keep proving out.

Risk three: operating dependence on Amital

The company explicitly states that it is dependent on Amital, the software supplier behind its customs and forwarding activity. Management says the available alternatives do not provide an optimal solution and that moving to another system would require significant time and resources. That is not a direct financial risk, but it is a real operating dependence in the core system.

Risk four: weak trading liquidity can keep the value gap open

Even if results improve, a stock that trades on turnover of only a few thousand shekels a day can struggle to benefit from efficient price discovery. That does not change the business, but it does change actionability.

Conclusions

Orian ends 2025 as a company with broad operating reach, meaningful assets and a funding profile that looks more comfortable after January 2026, but also as a company that mainly proved this year how easy it is to generate volume and how much harder it is to generate clean profit from that volume. What supports the thesis is the breadth of the platform, growth in warehousing and delivery, and still-positive operating cash flow. What blocks a cleaner read is that the three main engines, forwarding, warehousing and delivery, still do not connect into a healthy enough earnings model.

In the near term the market is likely to focus less on turnover and more on four numbers: forwarding margins, Kiryat Malachi occupancy, distribution profitability after the B2C mix shift, and cash after the refinancing. If those move in the right direction, the reading of 2025 as an expensive transition year can change. If they do not, this report will look in hindsight like a station on the way to a more structural earnings squeeze.

Current thesis: Orian has already completed most of the transition moves, but it still has not proved that the new system earns better profit than the one it replaced.

What changed: In 2024 the story was building the platform. In 2025 the story became testing the return on that platform, and the answer is still incomplete.

Counter-thesis: The market may be reading 2025 too harshly because the costs of absorbing Kiryat Malachi, the transition away from DBSCHENKER, and the delivery mix pressure are all temporary, which would allow 2026 profit to rebound sharply without another major revenue step-up.

What could change the market’s interpretation over the short to medium term: sustained occupancy and margin improvement in warehousing, better delivery profitability, and evidence that Hellmann is starting to generate inbound business rather than only replacement operating flow.

Why this matters: Orian is no longer being tested on whether it can expand and complete transactions. It is being tested on whether that broader logistics platform can produce real returns on capital and real balance-sheet flexibility.

What must happen next: over the next 2 to 4 quarters the company has to raise Kiryat Malachi occupancy, stabilize gross profit in forwarding and delivery, and end 2026 with a cleaner cash picture. If one of those three axes fails, the thesis remains stuck.