Bikurey Hasade: Who Is Funding the Customers, and Where the Balance-Sheet Pressure Really Sits
The 2025 balance sheet shows that supplier credit funds only part of Bikurey Hasade's short operating loop. The real pressure line sits where longer-dated customer credit meets callable short bank funding and year-end cash of just NIS 8.1 million.
The main article argued that Bikurey Hasade improved earnings in 2025 without really cleaning up the balance sheet. This follow-up isolates the chain that funded that gap: customers, suppliers, banks, and very little cash at the end of the pipe.
The question here is not whether the group extends credit. It does, and that is built into the model. In the agricultural distribution business it pushes produce to about 1,500 daily delivery points, supplies it within roughly 24 hours on average, and gives agricultural customers an average credit period of 87 days, while suppliers give it current plus 20 days. In non-bank finance it runs a credit book that expanded sharply. The real question, then, is who actually carries that credit load when you look at the group as a whole.
The 2025 answer is clear: suppliers fund only part of the short operating loop. The real pressure line sits elsewhere, in customer credit that grew mainly through non-bank finance, against short bank funding that is callable on demand, with only NIS 8.1 million of cash at year-end.
The Real Funding Map
| Layer | 2024 | 2025 | Change | What it means |
|---|---|---|---|---|
| Total customer credit | NIS 507.2 million | NIS 643.9 million | Up NIS 136.7 million | Balance-sheet usage expanded very quickly |
| Suppliers and service providers | NIS 235.8 million | NIS 226.4 million | Down NIS 9.4 million | Suppliers did not absorb the growth |
| Short-term bank credit | NIS 197.6 million | NIS 287.4 million | Up NIS 89.8 million | Banks carried most of the incremental load |
| Cash and cash equivalents | NIS 4.7 million | NIS 8.1 million | Up NIS 3.4 million | The cash cushion remained very thin |
| Unused credit lines | NIS 335.9 million | NIS 441.1 million | Up NIS 105.2 million | Liquidity is available, but it sits in bank lines rather than in cash |
The most important number here is not just the level of customer credit, but where the growth came from. Of the NIS 136.7 million increase in total customer credit, roughly NIS 129.8 million, almost 95%, came from the jump in net customer credit. Ordinary trade receivables rose by only NIS 6.9 million. In other words, the new balance-sheet strain did not come from the regular trading loop of produce and retail. It came from the credit book.
That changes the way the balance sheet should be read. If suppliers had financed the expansion, supplier credit would have risen alongside it. It did not. Supplier credit fell by NIS 9.4 million. Banks stepped in instead, with short-term bank credit up NIS 89.8 million, while cash increased by only NIS 3.4 million.
Put more plainly, once suppliers are netted out, the funding gap against customer credit widened to NIS 417.5 million from NIS 271.4 million. Even after adding short bank credit, the remaining gap still rose to NIS 130.1 million from NIS 73.8 million, an increase of more than 76%. That is the core read-through: 2025 was not a year in which suppliers financed the growth. It was a year in which customer credit grew faster than supplier funding, and banks had to bridge the difference.
The company also makes clear that it has no long-term bank debt. That detail matters. It means financial flexibility rests on short funding rather than on a longer and more stable debt layer. The NIS 441.1 million of unused credit lines are therefore an important liquidity tool, but they are not a capital cushion. They are the ability to keep rolling the funding.
Where Supplier Credit Really Helps, and Where It Doesn't
This is where two very different balance-sheet worlds need to be separated. One is Bikurey Hasade's classic operating loop. The other is the non-bank finance credit book. Suppliers matter a great deal in the first world. They do not solve the problem in the second.
In agricultural distribution, the model is fairly straightforward. The company buys from growers, consolidates, cools, packs, and distributes quickly. That naturally creates short inventory, customary supplier credit, and longer customer credit. Even here, however, the business is not simply a cash sale model. Bikurey Hasade Darom itself had about NIS 357 million of customer credit at the end of 2025, of which about NIS 81.5 million was insured through credit insurance. At the same time, the company says roughly 99% of agricultural receivables were still within agreed credit terms. So this loop does consume working capital, but as of year-end 2025 it still looked controlled rather than broken.
That chart sharpens the real point. About 96.4% of trade receivables sit within a three-month window. Suppliers do too, at about 98.4%. This is short operating funding, broadly aligned with the distribution loop, even if customers get more days than suppliers.
The non-bank finance book looks very different. Out of NIS 245.1 million of net customer credit, roughly NIS 148.7 million sits beyond three months and another NIS 31.9 million sits beyond a year. Together that is about 73.7% of the book. Supplier credit is not funding that duration. Suppliers fund inventory purchases and the distribution cycle. They do not fund a credit book that naturally lives much farther out on the maturity curve.
There is one encouraging point inside the finance book. The disclosed top-10 customer table implies the top 10 clients fell to about 57.1% of the book from about 71.8% a year earlier. That is a real improvement in diversification. But better diversification is not the same thing as better funding. It can improve credit quality, yet it does not shorten duration or replace the need for financing.
The Actual Pressure Line on the Balance Sheet
If the goal is to locate where the pressure really sits, the consolidated lines are not enough. The segment view used by management is much more revealing. In non-bank finance, assets rose to NIS 605.4 million from NIS 427.3 million, while liabilities rose to NIS 546.9 million from NIS 384.4 million. In retail, by contrast, liabilities edged down to NIS 171.2 million from NIS 175.8 million. In agricultural distribution, liabilities barely moved at all, at NIS 349.8 million versus NIS 347.5 million.
That leads to an important conclusion. Shuk Ha'ir is a business and operating problem, but it was not the balance-sheet driver behind the 2025 pressure jump. That jump came mainly from the finance segment. Both its assets and its liabilities expanded by more than 40% in a single year.
Retail is still not detached from the story, though. Bikurey Hasade Darom extended Shuk Ha'ir credit facilities and guarantees to banks and suppliers totaling about NIS 202 million. So retail may not be the source of the year's liability surge, but it still consumes support capacity within the group. It remains inside the same balance-sheet support system even if it did not create the main increase in consolidated short funding this year.
The sharpest disclosure comes when this is tied back to the finance segment's own funding structure. The company describes that segment as being funded through equity, loans from group companies, and callable short bank loans under approved but non-binding credit lines, some of them backed by deposits of deferred checks. That is not a technical footnote. It is the heart of the issue. When the credit asset extends in duration, even if credit quality is stable and diversification improves, the real pressure line shifts to the ability to renew and roll short funding.
That is why Bikurey Hasade's true liquidity cushion at the end of 2025 is not cash. Cash is almost irrelevant at this scale. The cushion is the relationship with the banks and continued access to credit lines. As long as those lines stay open and the credit book's duration remains manageable, the system works. If either one starts to tighten, the pressure moves very quickly from the note disclosure into the cash flow statement.
What Needs To Be Measured Next
Three checkpoints will tell the story from here:
- Whether net customer credit keeps growing faster than ordinary trade receivables, and whether the share that sits beyond three months keeps expanding.
- Whether short bank funding remains flexible and available, or starts requiring more collateral, more deposits, and more balance-sheet room.
- Whether Shuk Ha'ir keeps consuming guarantees and support capacity, or starts releasing capital inside the group instead of just using it.
Who is funding the customers? Suppliers fund an important but short part of the operating loop. Banks fund a larger share of the overall book. Equity and the rest of the balance sheet absorb the residual.
Where does the real pressure line sit? Not in the cash balance, because there is barely any cash. Not in Shuk Ha'ir on its own, because it did not drive the 2025 liability jump. It sits at the meeting point between a credit book that is growing and extending in duration and short bank funding that depends on continued access to facilities.
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