Amanet: if backlog is growing, why is operating cash still this weak?
Amanet ended 2025 with backlog at NIS 545 million, but operating cash flow of only NIS 3.7 million. This follow-up argues that the real issue is not immediate liquidity, but a payout policy that is moving ahead of cash generation while working capital still absorbs too much of the profit.
The main article argued that a NIS 545 million backlog and better operating momentum are not enough if cash does not move with them. This follow-up isolates the friction point: why NIS 11.1 million of net profit turned into only NIS 3.7 million of operating cash flow, and what that says about the payout pace.
The gap looks even sharper in the second half. Profit attributable to shareholders in H2 rose to NIS 5.9 million, versus NIS 2.8 million in H2 2024. At the same time, backlog grew 24.4% to NIS 545 million and revenue rose 4.7% to NIS 338.9 million. But on the cash test, 2025 looks weaker, not stronger. Operating cash flow fell from NIS 14.3 million to NIS 3.7 million, a decline of 74.2%.
The key point is that this is not an immediate liquidity-stress story. At year-end 2025 the group held NIS 25.7 million of cash and cash equivalents, NIS 21.1 million of financial assets at fair value, NIS 85.0 million of working-capital surplus, and NIS 99.7 million of equity, with no bank loans and no credit lines. So the real question is not whether Amanet can distribute. It is what it is really distributing from: cash generated by operations, or balance-sheet flexibility and non-operating inflows.
Where The Gap Actually Opened
| Metric | 2024 | 2025 | Read-through |
|---|---|---|---|
| Backlog | 438 | 545 | Backlog grew much faster than revenue |
| Revenue | 323.6 | 338.9 | Growth exists, but it is not extreme |
| Profit attributable to shareholders | 10.7 | 10.8 | Earnings broadly held up |
| Operating cash flow | 14.3 | 3.7 | Profit-to-cash conversion collapsed |
The right bridge starts with profit and ends with working capital. Amanet recorded NIS 11.1 million of net profit in 2025, and non-cash adjustments added another roughly NIS 5.1 million. On paper that should have been enough for a much more comfortable operating-cash number. In practice, NIS 9.2 million was absorbed by operating balance-sheet items, and another NIS 3.3 million went out through interest and taxes. The end result was only NIS 3.7 million.
The most important number here is not customers alone, but suppliers. Customer balances released NIS 2.8 million of cash, yet suppliers and service providers fell by NIS 10.2 million and pulled most of that cash back into the business. Other receivables added another NIS 1.5 million of drag. In other words, Amanet did not get stuck because revenue was sitting in some hidden accounting bucket. It got stuck because working capital and ordinary operating balances pulled a large share of earnings back inside the cycle.
There is another useful nuance. Contract assets from customers ended 2025 at zero, after a NIS 0.86 million balance had been transferred to receivables in 2024. So the gap is not hiding in unbilled revenue. It sits in the regular operating cycle, and especially in the way cash moved between customers, suppliers, and other operating balances.
Working Capital: The Year-End Snapshot Flatters The Story
Anyone looking only at the year-end snapshot could reach a comfortable conclusion. Customer balances at year-end fell to NIS 88.5 million from NIS 91.3 million. On the surface that looks like cleaner collection. But section 10.4 shows a very different picture: average customer credit days rose to 99 from 87, and average customer credit volume rose to NIS 93 million from NIS 89 million.
| Metric | 2024 | 2025 | The right reading |
|---|---|---|---|
| Year-end receivables | 91.3 | 88.5 | The closing snapshot looks slightly cleaner |
| Average customer credit days | 87 | 99 | Customers actually paid more slowly through the year |
| Year-end suppliers and service providers | 21.8 | 11.6 | Less operating financing from suppliers |
| Average supplier credit days | 84 | 69 | Suppliers were funded for a shorter period too |
That is exactly the difference between a year-end snapshot and the real economics of the year. At the closing date, receivables even look slightly lower. But during the year Amanet gave customers more time, while also relying less on supplier financing. That is how backlog can grow while cash stays weak.
The directors' report frames the point almost directly. It says 2025 operating cash flow was driven mainly by annual profit and by a decline in customers, but was offset by a decline in suppliers and service providers. This sounds like a minor note, but it is the center of the story: Amanet was not blocked by one problematic customer or by a hidden accounting hole. It was blocked because working capital did not work in its favor.
For a services, technology, and project-delivery group, that is not a footnote. Backlog becomes quality backlog only when projects turn into billings, collections, and then free cash. In 2025, that chain stretched out.
Dividend Policy: The Test Is Cash, Not Legal Capacity
On January 19, 2025, the board approved an updated payout policy for 2025 and 2026. Under that policy, Amanet will distribute a dividend twice a year at no less than 60% of profit attributable to the owners of the parent, subject to distribution tests and to liquidity, investment, and financing considerations. During 2025 the company paid NIS 4 million in April and another NIS 4 million in September. On March 18, 2026, it approved an additional NIS 3 million dividend.
The arithmetic is sharp. The 2025 cash dividend alone equals 73.8% of 2025 profit attributable to shareholders. Once the March 2026 dividend is added, cash distributed or approved around the 2025 cycle reaches NIS 11 million, roughly the full annual profit.
This is where the right cash frame matters. The relevant lens here is all-in cash flexibility, because the question is not what the business generates before discretionary uses, but how much cash is actually left after real obligations and uses that already happened. On that frame, NIS 3.7 million of operating cash flow did not even cover two fairly routine uses of cash: NIS 5.0 million of lease-principal repayment and NIS 8.0 million of dividends. Even before NIS 1.2 million of CAPEX and NIS 1.0 million used for an activity acquisition, the business was already short by about NIS 9.3 million. After those two uses, the gap reached roughly NIS 11.5 million.
The balance here matters. This is not an argument that the dividend is immediately dangerous. Amanet has a comfortable balance sheet, cash, financial assets, and no bank debt. That gives it room to pay out more than one year's operating cash flow. But it is still an argument that the 2025 payout rested on balance-sheet flexibility and investment cash flows, not on a clean operating cash engine. In 2025, investing activity contributed NIS 14.6 million, mainly from the sale of the Amagon holding and net realizations of financial assets. Without that layer, the payout pace would look far less natural.
What Has To Change Next
The next test is not another backlog headline. It is a combination of three proofs.
First proof: operating cash flow needs to move materially closer to earnings, not just stay positive.
Second proof: customer credit days need to stop stretching out, and Amanet also needs to show that the decline in suppliers is not continuing to erode cash flow.
Third proof: the payout policy has to be judged against cash generated by operations, especially if the acquisition path the company has discussed turns into a binding use of capital.
Conclusion
Amanet is not in funding distress. That is exactly why the dividend question matters. The board has enough room to distribute, but 2025 shows that the business is still not funding that payout pace from within. As long as backlog is growing and earnings are still there, but operating cash remains stuck around NIS 3.7 million, the payout reads less like a natural outcome of the operating model and more like a decision to use balance-sheet flexibility before better cash conversion has been proven.
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