Hachshara Hitachdashut: Are 20/80 Sales Preserving Momentum While Pushing the Risk Forward
The main article argued that the shareholder test runs through cash and partners. This follow-up isolates the sales layer and shows that the 2025 headline stayed alive mainly through largely non-indexed 20/80 structures, so units are moving now while much of the cash and part of the risk are being pushed into later years.
The main article argued that Hachshara Hitachdashut still has to pass the shareholder test through cash, partners, and the move into execution. This follow-up isolates only one variable inside that equation: sales quality itself. The real question is not whether the company can generate buyer interest, but on what terms it is preserving volume, how much cash those terms bring in now, and how much risk they push forward.
The headline the company presents looks strong. By the presentation date, 141 housing units had been sold or marketed for about NIS 355 million including VAT. But the same slide also says that the number includes 4 purchase requests with expected consideration of about NIS 8 million, and the wording is "sold or marketed", not only signed binding contracts. That is the point. In a market where the company itself says that most current sales are done on 20/80 structures that are not fully indexed, the marketing headline on its own is no longer enough.
The company also explains why. In the current market, the buyer often pays only a 10% or 20% down payment, the balance is pushed to delivery, that balance is often not linked to the construction input index, and the structure may also include a meaningful mortgage-interest subsidy. The company says the embedded discount in such deals is about 5.3% to 7% of the list price. In other words, sales are preserving the pace, but they are not funding themselves the way normal sales would.
The headline is carried mostly by two projects
By the presentation date, only two projects carried most of the headline: Ben Gurion Ramla Phase A and Kiryat Yam Phases A and B. Together they contributed 119 of the 141 units sold or marketed, and about NIS 248 million out of the NIS 355 million total. That is about 84% of the units and about 70% of the value shown. What looks like broad sales momentum is actually much more concentrated.
That chart matters because it sets the right frame. If most of the headline sits in Ramla and Kiryat Yam, then the real test of sales quality and cash conversion has to be read there first, not through the total number and not through the whole pipeline.
There is also a second distinction that matters here. The presentation talks about units that were "sold or marketed". The detailed project tables talk about binding contracts and collection schedules. Once the read moves from the headline into the tables, the picture becomes much heavier.
The collection schedules show what is really being deferred
Ramla is the first clear example. By the end of 2025, the project had signed 42 contracts with expected revenue of NIS 83.9 million. But out of that amount, only NIS 16.1 million had been received, or was expected to be received, by the end of 2025. Another NIS 11.6 million is scheduled for 2026, NIS 4.4 million combined for 2027 and 2028, and NIS 51.8 million, meaning most of the cash, only in 2029. At the same time, execution already started in January 2026, and the contractor agreement is a NIS 287 million fixed-price contract plus VAT, linked to the construction input index from July 2025 and paid monthly according to progress.
Kiryat Yam is even more back-end loaded. By the end of 2025, the project had signed 57 contracts with total expected consideration of NIS 93.9 million. But only NIS 4.6 million had been received, or was expected to be received, by the end of 2025, with another NIS 14.2 million in 2026. The remaining NIS 75.1 million is pushed to 2030 and beyond. And despite that sales pace, by the date the report was approved the project still did not have a signed financing agreement, while construction was only planned to start in Q3 2026.
| Project | Binding contracts by end 2025 | Expected revenue from signed contracts | Buyer advances by end 2025 | Most of the cash pushed to | Execution and financing status |
|---|---|---|---|---|---|
| Ben Gurion Ramla Phase A | 42 units | NIS 83.9m | NIS 16.1m | 2029, with NIS 51.8m | Construction started in January 2026, contractor payments are monthly and index-linked |
| Kiryat Yam Phases A and B | 57 units | NIS 93.9m | NIS 4.6m | 2030 and beyond, with NIS 75.1m | Construction planned for Q3 2026, and financing was still unsigned at report approval |
This is not a technical detail of collections. It is the core of the thesis. In Ramla and Kiryat Yam the company can already show sales momentum, but the collection schedules show that most of the consideration has not arrived yet and, in some cases, sits very far out. Once that is combined with the 20/80 structure the company itself describes, the conclusion is straightforward: the sales headline arrives early, while the cash arrives late.
That is also where the distinction between what the company sells and what it converts becomes much sharper. In Ramla, the presentation already shows 48 units sold or marketed by the presentation date. In Kiryat Yam, it already shows 71. But the detailed project tables show that by year-end 2025, most of the cash from the signed contracts was still in the distant future. The pace is being preserved, but the cash relief is not arriving at the same pace.
In the meantime, the balance sheet is carrying the gap
To understand the cost of that time gap, the right frame is all-in cash flexibility. The question is not how much gross profit is expected in the pipeline, but how much cash is left after the period's real uses. Here the picture is clear: in 2025 the operating business consumed NIS 67.6 million of cash, cash and cash equivalents fell from NIS 73.0 million to NIS 32.7 million, and inventory of buildings for sale jumped from NIS 31.5 million to NIS 196.6 million.
The liability side shows the same strain. Buyer advances rose to NIS 41.7 million from NIS 27.4 million, but liabilities for construction services jumped to NIS 139.2 million from NIS 28.2 million. In other words, the company is indeed building the contract layer and the project-commitment layer, but the increase in customer cash is much smaller than the increase in inventory, execution burden, and construction obligations.
| Metric | 2024 | 2025 | What it means |
|---|---|---|---|
| Revenue from apartment sales and construction services | NIS 38.5m | NIS 62.8m | Accounting recognition improved, but it is still small relative to the sales and marketing headline |
| Operating cash flow | NIS 48.6m- | NIS 67.6m- | Cash pressure intensified even in a higher-volume year |
| Cash and cash equivalents | NIS 73.0m | NIS 32.7m | The cash cushion shrank |
| Inventory of buildings for sale | NIS 31.5m | NIS 196.6m | More execution means more working capital trapped in inventory |
| Buyer advances | NIS 27.4m | NIS 41.7m | Collections improved, but not nearly enough to offset the rest |
| Liabilities for construction services | NIS 28.2m | NIS 139.2m | Execution commitments rose much faster |
That chart matters because it shows who actually carried the timing gap. Not the customers, and not the income statement. The gap was carried by the balance sheet, by lenders, and by partners. Financing activity contributed NIS 24.2 million, including NIS 53.0 million from non-controlling interests and NIS 5.3 million from option exercises, and cash still fell by NIS 40.2 million. Even after partner capital and equity inflows, 2025 still ended with heavy cash consumption.
That is also why the comparison between the NIS 355 million presentation headline and the NIS 62.8 million of recognized 2025 revenue is not a one-to-one comparison, but it is still useful. The first number includes marketing and purchase requests through the presentation date. The second is reported revenue for full-year 2025. The gap does not mean the company is inflating sales. It does mean the market is currently getting a much bigger commercial headline than the amount that has already reached the cash line and the income statement.
This is no longer only a liquidity risk, but a quality risk
The company does not hide that. In its own industry discussion it says that the move toward 20/80 and sometimes 10/90 deals was born out of a high-rate environment and a difficult housing market, and that such deals materially increase developer liquidity risk. It also explains why: the risk of deal cancellations, uncertainty around the mortgage terms buyers will eventually receive, and the possibility that buyers will struggle to refinance the bullet loan and complete the balance payment at delivery.
But in Hachshara Hitachdashut's case there is another layer. The company's risk section explicitly connects the cost side to the revenue side: construction costs tend to be linked to the construction input index, while sale contracts are not fully indexed, and most current sales are in 20/80 structures that are not indexed. That is no longer just timing risk. It is margin risk.
Ramla shows it clearly. On one side, the project is already under execution, 42 contracts had already been signed by end 2025, and another 5 were signed by the report date. On the other side, the contractor gets monthly progress payments linked to the construction input index, while a large share of the buyer cash is deferred to 2029. So even without a fall in apartment prices, the structure itself can pressure margin, financing needs, and flexibility.
Kiryat Yam adds a second test. Here the company managed to sign 57 contracts already in 2025, and another 10 by the report date, but at the date the financial statements were approved there was still no financing agreement for the project. That means the company succeeded in generating demand before the full funding shell was closed. That can be read as commercial strength. It can also be read as a situation where sales are running ahead of financing, so the risk is not removed, only pushed forward.
That is the real test for 2026. Not whether the company can keep producing a sales headline, but whether that headline turns into buyer advances, closed financing, low cancellations, and gross margin that does not get squeezed by contractors, the construction input index, and interest subsidies. If that happens, 20/80 will prove to have been a bridge tool. If not, it will prove to have preserved the pace while making the economics heavier.
Bottom line
Hachshara Hitachdashut is proving that there is demand. It has not yet proved that the demand is arriving on terms that are friendly to shareholders. The NIS 355 million headline by the presentation date looks good, but it is concentrated in two projects, part of it includes marketing and purchase requests, and the collection schedules on the key projects show that most of the cash arrives much later.
In the meantime, the balance sheet is carrying the gap: inventory is up by more than sixfold, operating cash flow was negative NIS 67.6 million, cash fell to NIS 32.7 million, and construction costs remain much more indexed than the sales side. So the right question for 2026 is no longer whether Hachshara Hitachdashut can sell. It already proved that it can. The real question is whether it can convert those sales into cash without another layer of economic concessions, bridge financing, and delivery-day risk.
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