Mivtach Shamir 2025: Menif and Alon Tavor still generate cash, but the real test has shifted to capital, guarantees and execution at Shamir Energy

Getting To Know The Company

Mivtach Shamir is no longer a generic holding company that can be read through one profit line or a theoretical NAV. In practice, it now sits on three very different layers. The first is made up of relatively mature profit and cash engines, mainly Menif, Alon Tavor and parts of the real-estate portfolio. The second is Shamir Energy, where most of the upside sits, but also most of the capital burden, guarantees and execution risk. The third is the technology portfolio, which keeps injecting accounting volatility and at times erases a large part of what the other layers build. That is why the right way to read Mivtach Shamir in 2025 is not only “how much did it earn”, but “where did the earnings come from, how much of them is actually accessible, and what has to be paid on the way for that value to reach listed shareholders”.

What is working now is fairly clear. The group’s current contribution from operating segments reached NIS 121.5 million in 2025, of which Menif alone contributed NIS 92.0 million, real estate NIS 38.7 million, and energy NIS 22.1 million. The company also received dividends in 2025 of NIS 29.8 million from Menif, NIS 45.5 million from Shamir Energy, and NIS 60.0 million from Alon Tavor. At the same time, on a parent-only basis, net debt moved from NIS 66.5 million at the end of 2024 to NIS 47.8 million of net cash at the end of 2025. In other words, the group does have real value engines, and those engines can already push cash up the chain.

But a superficial read misses the active bottleneck. The issue today is no longer parent-level debt. It is the price Mivtach Shamir has to pay to turn Shamir Energy from a promising project stack into value that is actually available to Mivtach Shamir shareholders. After the balance-sheet date, on February 16, 2026, Shamir Energy put in place a sponsor equity guarantee for Kesem of about NIS 280.7 million, backed by a dedicated NIS 140 million deposit. A month later, on March 17, 2026, Poalim Equity invested about NIS 270 million into Shamir Energy for 10% of the equity, and Mivtach Shamir’s stake in Shamir Energy dropped from 79.74% to 71.77%. That is the key point: de-risking is progressing, but it is not free.

That is also why this year matters. On one hand, Mivtach Shamir’s market cap is around NIS 3.7 billion, short interest is low, and the stock is not being treated like a distress story. On the other hand, profit attributable to shareholders fell to NIS 19.8 million in 2025 from NIS 88.4 million in 2024, mainly because of other losses, fair-value hits and financing effects. Anyone reading only the bottom line could conclude the business weakened. Anyone reading only the move to parent-level net cash could conclude the story has cleaned up. Both readings are incomplete. Mivtach Shamir enters 2026 with more flexibility at the parent, but also with more capital still to be committed, more guarantees to carry, and more minority layers that future value has to pass through.

Over the next two to four quarters, investors should focus on four proof points. First, Kesem needs to move through construction without opening new gaps in timing or financing. Second, Synergy needs to move from financial close and availability contracts into actual buildout. Third, Menif needs to keep generating profit and dividends without a deterioration in credit quality. Fourth, the technology portfolio needs to stop erasing the progress made by the cash-generating engines.

This chart gives the right orientation. Mivtach Shamir is still much less of a pure energy story than headline reading might suggest. Today it is a structure where Menif carries recurring profit, Alon Tavor and real estate provide stability, and Shamir Energy carries the future narrative.

Events And Triggers

Shamir Energy got de-risked, but not for free

The biggest late-2025 and early-2026 trigger is the shift of energy projects from narrative to funded execution. At Kesem, on December 10, 2025, the project signed a project-finance package with Bank Hapoalim totaling about EUR 1.1 billion and NIS 300 million. On December 31, 2025, the Electricity Authority confirmed that Kesem had met the conditions for financial close, and on February 19, 2026 the first draw under the facilities, about EUR 191 million, was made. In early March 2026, with lender approval, Shamir Energy received NIS 31.8 million of development fees from Kesem.

On paper, that looks entirely positive. In practice, the line below it matters just as much. Alongside the project financing, Shamir Energy put in place the NIS 280.7 million sponsor equity guarantee backed by the NIS 140 million pledged deposit. The parent also signed undertakings that impose restrictions around changes in structure and control. In other words, engineering and regulatory risk is coming down, but sponsor-level financial exposure is not disappearing. It is just changing form.

The Poalim Equity investment into Shamir Energy on March 17, 2026 sits on the same line. The transaction injects about NIS 270 million, adds a financial sponsor, and makes the project layer easier to fund. But it does so at the cost of Mivtach Shamir’s ownership falling from 79.74% to 71.77%. This is not a simple “value creation” move. It is a de-risking move that buys time, capital and execution capacity, but also hands part of the future upside to minorities.

Synergy moved from permitting into the point of no return

The second major event is Synergy Ramat HaGalil. This is a ground-mounted solar-plus-storage project with 174 MW of solar capacity and 937 MWh of storage, in which Shamir Energy holds 25%. On December 31, 2025 the project signed a 10-year availability-certificate sale agreement for 50 MW with expected aggregate consideration of NIS 300 million to NIS 350 million. On January 5, 2026 it signed another availability-certificate sale agreement for 50 MW over about 3 years, with expected aggregate consideration of NIS 80 million to NIS 100 million.

On February 1, 2026 the project signed an NIS 850 million financing agreement with Discount Bank, structured as roughly NIS 700 million for construction, NIS 42 million for leverage enhancement, and NIS 100 million for ancillary facilities. On the same day it received a building permit, and on February 26, 2026 the Electricity Authority confirmed that the project had met the conditions for financial close. This lowers the probability that the project remains stuck in the permitting phase. But again, the cost of that progress matters. The financing requires a 20% equity and 80% senior debt structure during construction, and Shamir Energy already says that if its stake rises from 25% to 30% under the transaction with Rapac, its expected equity contribution will be around NIS 40 million.

The critical point is that this project is no longer being judged on whether it exists. It will now be judged on how it gets built. The availability contracts, financing, permit, EPC agreement and O&M agreement are already there. From here the market will want to see schedule discipline, budget control and no new equity gap.

This is the chart that explains both why the Mivtach Shamir story matters and why it is still not clean. The energy pipeline is large relative to the size of the group, but most of it still sits outside the operating phase. So from here the market will no longer be satisfied with potential. It will want physical execution.

Higher up the chain, the parent did see real cash come in

Within all of this, 2025 was clearly better for the parent company itself. In November 2025 the company sold 264,412 treasury shares for about NIS 86.7 million. It also received the dividends from Menif, Shamir Energy and Alon Tavor noted above. The dividend it paid its own shareholders in 2025 totaled NIS 100.5 million, across two separate distributions.

This is not a technical detail. It changes the nature of the risk. At the end of 2024 the story could still be read mainly through the question of whether the parent itself would need more leverage. At the end of 2025 the picture is different. The issue now is not whether the parent can refinance its own debt. The issue is how much of this cash will have to go back down into subsidiaries, how fast, and in exchange for what kind of dilution or encumbrance.

Efficiency, Profitability And Competition

Menif is carrying recurring profit, but it cannot be separated from the credit cycle

The strongest operating story in the group in 2025 is Menif. Its current contribution rose to NIS 92.0 million from NIS 75.7 million in 2024. This is the main earnings engine inside Mivtach Shamir, and not by accident the parent also received a NIS 29.8 million dividend from it. After the balance-sheet date Menif also completed its Series D bond issue of NIS 189.3 million par value, extended a NIS 270 million bank loan to January 2028, and obtained a new NIS 250 million credit line through January 2029, all on better pricing.

But this is exactly where a simplistic “strong engine” reading breaks down. Expected credit loss allowance rose to NIS 74.25 million from NIS 55.25 million, and even though the general allowance rate declined to 0.5155% from 0.582%, Menif’s board still decided on February 26, 2026 to keep the additional 25% overlay to the general model. In plain English, Menif is still earning well, funding well and refinancing well, but it is not reading the real-estate credit market as a low-risk environment.

The financing structure itself also says something more useful than just “it meets covenants”. At the report date Menif meets all its financial covenants, and across the bond series its tangible-equity-to-balance-sheet ratio stands around 19.6% to 20.1% versus a 15% minimum, while its coverage ratio stands at 1.83 versus a 1.25 minimum. That is comfortable headroom. It does not point to stress. But it does explain why Mivtach Shamir can currently fund the energy buildout without relying only on external capital.

Alon Tavor shows the gap between a good business and a clean reported bottom line

Alon Tavor offered a particularly good example in 2025 of the gap between operating performance and accounting earnings. Revenue rose to NIS 695.3 million from NIS 648.8 million, and operating profit before depreciation and amortization increased slightly to NIS 286.9 million from NIS 283.1 million. The revenue increase mainly reflected higher electricity generation volumes, both from natural gas and diesel, against the backdrop of stress events in the Israeli power market and maintenance that had been carried out a year earlier.

But Alon Tavor’s net profit fell to NIS 50.1 million from NIS 106.7 million. The reason was not an operating collapse. It was a much noisier financing and derivative layer: net financing expense rose to NIS 103.7 million, and the company booked a NIS 79.0 million derivative loss in 2025. As of December 31, 2025 the embedded derivative liability stood at NIS 106.9 million, and a 10% move in the euro changes profit or loss by roughly NIS 18.1 million to NIS 18.7 million after tax.

This is not a footnote. It is a core analytical point. Mivtach Shamir received a NIS 60 million dividend from Alon Tavor in 2025, while its current contribution from MRC stood at only NIS 23.1 million. In other words, Alon Tavor currently helps Mivtach Shamir shareholders more through cash and dividends than through reported equity earnings. Reading Alon Tavor only through the net-income line misses the economics of the asset.

This chart makes the distortion obvious. The core business remained fairly stable. The bottom line did not.

The technology portfolio is still hurting earnings quality

The technology portfolio again worked against the story in 2025. Fair-value financial assets fell to NIS 262.7 million from NIS 410.9 million. Inside that, there were significant hits in Lendbuzz, Beyeonics Vision, Beyeonics Surgical, Miros and other holdings, with Miros fully written down and Accelario fully impaired during the year.

That means the group’s current earnings base improved far more than the profit attributable to shareholders suggests. This does not mean the technology losses are not real. It does mean that the key question for 2026 is whether this layer keeps dictating the headline, or whether the cash engines finally start to dominate the reported picture.

This is the core of the 2025 story. The recurring base is not weak at all. What crushed the reported bottom line was the combination of other losses, financing and tax. So the right read of Mivtach Shamir in 2025 is not “weak business”. It is “good underlying engines, still obscured by outer layers that eat too much of the benefit”.

Cash Flow, Debt And Capital Structure

The right framework here is total cash flexibility first, then the parent-only layer

For Mivtach Shamir, the analysis needs two separate frames. The first is all-in cash flexibility at the consolidated level, meaning how much cash is left after all real uses of cash across the group. The second is the parent-only layer, meaning how much flexibility actually remains at Mivtach Shamir itself after dividends, the treasury-share sale, and its own expenses.

On the consolidated view, 2025 was still a heavy year. Cash flow from operating activities was negative NIS 288.2 million, investing cash flow was negative NIS 411.6 million, and only financing cash flow was positive, at NIS 658.2 million. At the same time, cash and cash equivalents fell to NIS 282.7 million from NIS 327.0 million. This is not the cash-flow profile of a harvesting story. It is the cash-flow profile of a group still funding growth, mainly through Menif and through the energy buildout.

What really matters in this chart is not only that operating cash flow is negative. That is familiar in a structure where Menif is expanding its lending book. What matters is that 2025 already added a very heavy investing layer on top. Projects in construction jumped to NIS 404.0 million from NIS 8.3 million a year earlier. That number alone explains why 2026 is not a harvest year. It is an execution year.

At the parent level, the picture is already different

And that is where the critical distinction comes in. On the solo balance sheet, debt fell to just NIS 4.0 million against NIS 51.8 million of cash, cash equivalents and deposits. In other words, net debt moved to negative NIS 47.8 million, versus positive NIS 66.5 million at the end of 2024. That improvement came from a mix of dividends, treasury-share monetization and the lack of heavy direct debt at the parent.

But this picture cannot be presented as though it were the whole story. Part of the improvement came from a non-recurring source, the NIS 86.7 million treasury-share sale. And that cash sits above a project layer that still needs capital. So the more accurate conclusion is that the risk has moved. It has not disappeared.

Menif is more leveraged, but capital markets are still open to it

Inside Menif, total bank facilities stood at NIS 2.48 billion at the end of 2025, of which NIS 1.865 billion were medium-term lines and another NIS 615 million were short-term lines that renew as needed. In addition, in June 2025 Menif signed a NIS 300 million non-recourse framework with a financial institution, of which about NIS 235 million had been utilized by year-end. After the balance-sheet date, the company added the Series D bond issue and two additional bank facilities at better pricing.

For investors, the meaning is two-sided. On one hand, Menif continues to demonstrate real access to both banks and debt markets in a complex environment. On the other hand, that same reliance makes it highly sensitive to any change in credit quality, housing-market conditions or lender appetite. So Menif is both a moat and a risk.

At Kesem and Synergy, the test moves from debt to sponsor obligations

Kesem is not interesting today because of EBITDA or NOI. It is interesting because of the commitment structure around construction. The base availability tariff is 3.81 agorot per kWh, and it could rise further if construction is completed during 2029. But the road to that point includes project finance, equity injections, the NIS 280.7 million guarantee, the NIS 140 million deposit, pledged Kesem shares and minimum coverage ratios of 1.05. Synergy, for its part, is already running on a 20% equity and 80% senior debt structure, with a bridge-financing guarantee expected to rise to about NIS 40 million if bridge financing is expanded through March 2026.

That is the group’s central friction point. There is no shortage of financing today. There is no shortage of positive milestones either. What is still unresolved is how much more equity, sponsor support and minority protection will be required along the way.

Outlook

Four non-obvious takeaways heading into 2026:

• The parent company is no longer the main financial bottleneck. The bottleneck has shifted to the subsidiary level, mainly in energy.
• Alon Tavor currently creates more accessible value through dividends than through the accounting earnings line that Mivtach Shamir reports.
• Every de-risking step at Shamir Energy since early 2024 has arrived together with another outside capital layer, another minority layer or another sponsor commitment.
• 2026 looks like a bridge and proof year, not a harvest year. Cash should continue to come up from Menif and Alon Tavor, but the core story will be decided by whether Kesem and Synergy move from commitments to execution.

This is a bridge and proof year, not a harvest year

If 2026 needs one label, this is it. The company is no longer in a place where the main task is to extract value from one mature asset or refinance stressed parent debt. It is in a place where the old cash engines are expected to fund part of the journey of the new growth engines. That is an important distinction.

At Kesem, what must happen next is no longer financial close. It is execution. The agreements are already signed, the regulator has already approved the financial close, and the first draw has already taken place. From here the market will want to see contractors, suppliers and lenders remain aligned, schedules hold, and no fresh equity gap open up. The 3.81 agorot per kWh base tariff is an important anchor, but it is not a substitute for delivery.

At Synergy, what must happen next is the move from paper to site work. There is already financing, a permit, a conditional generation license, EPC and O&M contracts, and two availability agreements. What is still missing is proof of execution. From here, any meaningful regulatory, engineering or financing delay will be read as a deterioration in quality, not as routine development noise.

At Menif, the real question is growth quality. If Menif keeps delivering earnings, maintains the 1.83 coverage ratio, extends funding and lowers funding costs, it remains the engine that helps finance the group. If, instead, provisions start to rise faster or credit conditions worsen, the reading on the whole group can change quickly.

This chart sharpens another point. Even in the fourth quarter, when the group looked better overall, listed shareholders captured only a small part of the picture. So what the market will look for in the next reports is not only better total profit, but also a cleaner convergence between total profit and the profit that actually remains at the listed layer.

In the short to medium term, four things are likely to shape market interpretation. First, Kesem has already crossed the funding threshold, so any sign of physical progress should be read positively. Second, the Poalim Equity injection simultaneously supports execution and reminds investors that the energy option no longer belongs entirely to Mivtach Shamir. Third, continued funding-cost improvement at Menif can support the recurring-profit layer. Fourth, additional technology write-downs could keep distorting the headline even if the underlying business picture improves.

Risks

The first and most material risk is accessible value risk. In Mivtach Shamir this is structural, not incidental. A large part of the value sits in subsidiaries, leveraged projects, associates and assets where cash release depends on time, lenders, partners and minorities. So even real business improvement does not necessarily translate quickly into value available to listed shareholders.

The second risk is execution and financing risk at Shamir Energy. Kesem requires capital, guarantees, contractors, regulation and schedule discipline. Synergy requires buildout, compliance with financing terms, and smooth conversion of availability agreements into actual operations. Any meaningful deviation in either project can create either another equity need, another delay in cash accessibility, or another dilution round.

The third risk is Menif itself. At the report date Menif looks well funded and comfortably within covenants. But provisions are up, and the model still includes an overlay driven by judgment. This is classic credit-vehicle risk: as long as the market stays stable, the engine looks strong. If housing conditions or the financing environment weaken, the same engine can quickly shift from profit driver to pressure point.

The fourth risk is FX, derivatives and regulation at Alon Tavor. Euro exposure and the embedded derivative already proved in 2025 that their impact on the net-profit line can be far larger than the change in operations. Even where hedge revaluation has limited cash impact, the accounting headline can still move sharply. That sits on top of broader electricity-market regulatory risk, including the treatment of complementary tariffs and SMP market conditions.

The fifth risk is that the technology portfolio remains a drag. As long as that layer does not stabilize, it will be harder for the market to look through Mivtach Shamir as a cash-generating holdco with a cleaner energy option.

Conclusions

Mivtach Shamir exits 2025 as a stronger parent-level holding company, but a more complex group-level story. Menif, Alon Tavor and real estate provide a real base of profit, dividends and flexibility. On the other hand, most of the future upside now sits inside Shamir Energy, and the path to that value runs through capital, guarantees, partners and execution.

That means the real 2026 test is not whether the group owns good assets. It does. The real test is whether those good assets can keep funding the buildout layer without turning into another long and expensive capital bridge.

Current thesis: Mivtach Shamir now looks less like a holdco under parent-level debt pressure and more like a holdco with a decent cash base whose next phase depends on turning Shamir Energy from an investment engine into accessible shareholder value.

What changed: The center of risk moved from the solo balance sheet to the question of value accessibility and sponsor obligations at the energy layer. In 2024 the story could still be read mainly through funding needs. In 2025 the funding, equity and partners are already there. Now the market needs to see execution.

Counter thesis: It is possible that Mivtach Shamir is already in the best position it has been in for years: Menif is well funded, Alon Tavor keeps sending up cash, Kesem has secured financing, Synergy has permit and financing in place, and Poalim Equity brought in fresh capital. If that is the right read, the market may be overemphasizing dilution and underemphasizing how much risk has already come out of the story.

What could change market interpretation: fast physical progress at Kesem, a clean construction start at Synergy, additional funding-cost improvement at Menif, and a quieter technology line.

Why this matters: At Mivtach Shamir the key question is not just whether value is being created. It is where it is being created, who is paying for it on the way, and at which layer it actually becomes available to listed shareholders.

Over the next two to four quarters, three things need to happen for the thesis to strengthen. Kesem has to convert financing into execution without opening another equity hole. Synergy has to move from financial close into real buildout. And Menif has to keep showing that profitability holds up when credit quality is tested, not only when growth is measured. If those three things happen together, Mivtach Shamir will start to look like a group where upside is becoming more accessible. If not, it will remain a group with good assets but too much value still stuck on the way up.