Queenco 2025: Rhodes Is Carrying Earnings, Cambodia Still Needs to Turn Land Into Cash

Company Overview

Queenco is not really an Israeli operating company with several equal legs. It is a listed holding company that owns QLI, and through it two core operating assets: a casino and hotel in Rhodes, and a casino and hotel in Sihanoukville, Cambodia. Beyond that, it has two asset layers that drive much of the attention: wholly owned land in Cambodia, where parcels have already been sold, and a much larger jointly held land position through Vesanta, whose value is still far from practical realization.

The central issue in 2025 is the gap between the headline and the underlying economics. On the one hand, net profit almost doubled to NIS 35.6 million, equity rose to NIS 153.4 million, and liquidity looks much stronger with NIS 40.7 million of cash and another NIS 29.6 million of short-term investments. On the other hand, much of that jump came from two items that are not part of the recurring operating base: a capital gain of about NIS 17 million from selling land in Cambodia and recognition of an indemnity asset of about NIS 9.4 million in Rhodes.

What is working now is Rhodes. Segment net revenue rose to EUR 19.0 million, gaming revenue rose to EUR 20.57 million, average revenue per visitor rose to EUR 97.5, and operating profit jumped to EUR 8.8 million. There is also a real balance-sheet improvement: total bank debt fell to NIS 3.7 million at year-end 2025, and after the balance-sheet date the Rhodes loan was prepaid in full, about EUR 512 thousand. That is not just accounting presentation. There is a real operating engine here.

The problem is that Cambodia still is not clean. Segment revenue did not collapse, but its quality weakened. Direct gaming revenue fell about 18%, gross margin fell to 31.9% from 34.9%, operating margin fell to 18.6% from 23.4%, the workforce rose to 770 from 684, and a 5% VAT on gaming revenue applied in 2025, with the rate expected to rise to 10% from 2026. So the right way to read Queenco now is not “a tourism company that has recovered,” but a holding company whose earnings engine is Rhodes, while Cambodia still proves value more through land than through casino operations.

That matters now for the market read as well. Market value is around NIS 267 million, and short interest is effectively negligible. This is not a stock read through a fight between shorts and longs. It is read through discrete events: a land sale closing, a Rhodes lease renewal, a tax ruling, or the first sign that Cambodia is returning to real operating growth. In other words, the market is testing proof quality, not just the multiple.

• Profit jumped, but the core did not jump nearly as much. Other income in 2025 totaled NIS 26.4 million, nearly half of reported operating profit.
• Rhodes genuinely improved, but not at the pace implied by the headline. Even after stripping out the one-off, there is real improvement, but it is much more moderate than the jump from EUR 4.0 million to EUR 8.8 million in operating profit suggests.
• Cambodia is proving land value faster than operating profitability. Revenue growth came mainly from table rentals and food and beverage, while direct gaming revenue weakened.
• The hidden assets are still not free cash for shareholders. The shared land is stuck, the privately owned land is pledged, and upstreaming profits from Greece or Cambodia comes with tax friction.

Events And Triggers

The core point is that Queenco’s triggers are no longer only operating. The company is now at a stage where asset decisions, financing structure, and control issues can change the picture almost as much as casino results themselves.

Rhodes: Real improvement, but also a claim turned into a commitment

First trigger: Rhodes delivered a much stronger year. Gaming revenue rose to EUR 20.57 million from EUR 18.73 million, visitor count rose to 211 thousand from 208 thousand, and average gaming revenue per visitor rose to EUR 97.5 from EUR 90. These are operating data points, not just valuation noise.

But this is also where one of the report’s biggest reading traps begins. Rhodes recognized an indemnity asset of about EUR 2.4 million, or about NIS 9.4 million, after the municipality’s appeal was rejected in cases concerning excess municipal taxes. In exchange, under the draft lease now being finalized, Rhodes is expected to waive collection of that amount and receive a fixed annual rent structure of EUR 625 thousand through the end of 2056, together with a commitment to invest EUR 6 million in hotel renovations.

So what looks like a one-off gain is really an exchange of a legal claim for a long-dated contractual position. That may be rational if it secures operating certainty for another 30 years, but it also means the accounting gain in 2025 is not the same thing as free cash.

Second trigger: the removal of Rhodes bank debt. At the end of 2025 the loan balance still stood at NIS 1.9 million, and the company admitted that Rhodes was not in compliance with certain financial covenants, partly because a required deposit had not been placed. In January 2026 the loan was prepaid in full. That is a real balance-sheet de-risking, but it shifts the focus away from the banks and toward the lease economics and the ability of Rhodes to generate recurring earnings without one-offs.

Cambodia: Land has become more important than the casino

Third trigger: land monetization is no longer theoretical. In May 2025 the company completed the sale of a roughly 6-dunam parcel from the land acquired in 2008 for USD 5.9 million. Net proceeds after selling expenses were about USD 5.5 million, or NIS 19.5 million, and pre-tax gain stood at about NIS 17 million.

Fourth trigger: a larger sale was signed after year-end. On February 24, 2026, Rose signed an agreement to sell another roughly 10 dunams, about 12.65% of the remaining land, for USD 12.9 million before commissions and taxes. A USD 500 thousand deposit was paid at signing, and the remainder is due in two stages upon land registration. The company estimated the registration process should take up to 3 months, but as of the report approval date the deal had not yet closed.

This is the heart of the story. Queenco has now proven that the land has a market and that there is a very large gap between historical carrying cost and realized value. But it still has not proven that this value can move upward fully, quickly, and freely. The remaining land, about 79 dunams, is still pledged against the Cambodia loan.

Fifth trigger: corporate control and governance. In December 2025 a court ruling was issued in a long-running lawsuit against Yigal Zilka, under which the plaintiffs were found entitled to be registered as partners and shareholders in portions of his direct and indirect holdings, at 18% and 12.6%. The company itself is not a party to the case, but it explicitly stated that if the holdings are transferred as ruled, this could affect Zilka’s classification as a controlling shareholder. Zilka said he intends to seek a stay and appeal. This is not an earnings engine, but it is clearly an event that can pull the story back toward control.

Efficiency, Profitability, And Competition

The right reading of profitability is not “the group improved,” but “Rhodes and Cambodia are moving in opposite directions.” That matters because similar revenue is no longer producing similar earnings quality.

Rhodes: Better volume, better spend per visitor, and operating leverage

Rhodes ended 2025 with gross revenue of EUR 23.6 million versus EUR 21.2 million in 2024. Net revenue rose to EUR 19.0 million, and gross profit rose to EUR 9.6 million. The improvement was driven not only by a slightly higher visitor count, but mainly by greater player spend: average segment revenue per visitor rose to EUR 112 from EUR 102, while average gaming revenue per visitor rose to EUR 97.5 from EUR 90.

What really matters is the operating leverage. Labor cost rose only modestly to EUR 5.25 million, depreciation fell to EUR 1.83 million from EUR 2.07 million, and selling and marketing expense actually fell to EUR 1.53 million. So even without the EUR 2.423 million of other income, Rhodes would still have posted a clear improvement. Adjusted for that one-off, operating profit would have been around EUR 6.4 million, still meaningfully above EUR 4.0 million in 2024.

That matters because it means the Rhodes core is genuinely stronger and not just dressed up by a one-time recognition. But it also means the reported 46.2% operating margin is not the right starting point for 2026.

The competitive read in Rhodes is relatively constructive. The company says that even now there are no legally operating competing casinos on the island, and that the effect of OPAP gaming machines on Rhodes Casino revenue has been marginal over time. In addition, Rhodes visitors rose by about 5.5% between 2014 and 2025, while the rest of the Greek casino market saw a decline of more than 21%. That does not eliminate regulatory risk, but it helps explain why Rhodes is now the key earnings anchor.

Cambodia: Better mix on paper, weaker quality underneath

In Cambodia the picture is the reverse. Gross revenue rose to USD 19.24 million from USD 18.99 million, and net revenue rose to USD 18.35 million from USD 17.76 million. But the mix changed: gaming table rental rose, food and beverage revenue rose, while direct gaming revenue itself fell by USD 2.5 million, about 18%.

That matters because it changes the quality of growth. If revenue is being held through streaming activity, table rentals, or supporting services, that is not necessarily the same as normal growth in the core casino business. At the same time, gross margin fell to 31.9% from 34.9%, and operating profit fell to USD 3.4 million from USD 4.15 million. Net profit fell to USD 2.6 million from USD 4.0 million.

The other side of the equation is the cost base. Labor cost rose to USD 5.66 million from USD 4.42 million, and headcount jumped to 770 from 684. When a business with weaker gaming revenue adds labor and faces a harsher tax environment, the quality of the improvement has to be read much more carefully.

The company itself says that the Cambodia casino is still somewhat affected by the changing outcomes of high-value players, because it does not yet meet the threshold conditions of gaming volume and duration that would produce a more stable win rate. That is an important disclosure. It means the business still lacks depth in its operating base.

Cash Flow, Debt, And Capital Structure

This is where the framing has to stay disciplined. The Queenco thesis today is a thesis about financial flexibility and value access, so the right bridge is all-in cash flexibility: how much cash actually remains after real uses of cash, not just how much profit was booked.

On that basis, 2025 looks better than the past but less clean than the headline. Cash flow from operations was NIS 32.4 million, essentially flat versus NIS 32.3 million in 2024, even though net profit rose to NIS 35.6 million. The reason is straightforward: the land gain of about NIS 17 million is non-cash inside the P&L, offset by depreciation and amortization of about NIS 12 million. In other words, operating cash flow held up, but it did not surge with the bottom line.

Once the full cash picture is laid out, it becomes clear who funded the liquidity increase. In 2025 the company invested NIS 7.3 million in fixed assets, placed a net NIS 12.3 million into deposits, bought about NIS 3.3 million of marketable securities, repaid NIS 7.5 million of bank debt, and repaid NIS 1.9 million of lease liabilities. Against that stood about NIS 19.5 million of proceeds from the Cambodia land sale. So the NIS 17.1 million increase in cash and the NIS 31.8 million increase in liquid assets did not come only from the operating business. They came from a combination of decent operating cash flow and asset monetization.

By the end of 2025 the group had NIS 40.7 million of cash and another NIS 29.6 million of short-term investments, against only NIS 3.7 million of bank debt. That is a much stronger picture than in the past. But low bank debt should not be confused with fully open financial flexibility.

Where the cash actually sits

Cash generated in Rhodes and Cambodia is not the same thing as cash freely available at the listed-company layer. Rhodes did not distribute dividends in 2022 through 2025 and up to the report date, and the company notes that Greek law and the old debt arrangement still constrain distributions until conditions are fully met. In Cambodia, upstream distributions to Israel are subject to 14% withholding tax, so the total tax burden on distributed profits reaches 31.2%.

Beyond that, the remaining privately owned Cambodian land is still pledged against the Cambodia loan, and the shared land through Vesanta is carried via the equity method at only NIS 18.9 million after losses and FX effects, while the company itself says near-term realization is difficult because registration and expropriation are incomplete and real-estate transactions in the area are sparse.

That is exactly the distinction between value created and value accessible. Queenco created both profit and cash this year, but part of the value still sits in layers where the path to ordinary shareholders is neither immediate nor frictionless.

Outlook

2026 looks like a double proof year, not a clean breakout year. On one hand, Queenco enters it with a stronger balance sheet, lower debt, and another land sale already signed. On the other hand, it still has to prove that the improvement is not one-off heavy and that Cambodia can stand on its own under a tougher tax and cost base.

Rhodes has to prove recurring profitability

The first test is Rhodes without the one-off tailwind. In 2025 Rhodes benefited from both better player activity and the indemnity asset recognition. In 2026 the market will look for the recurring number: can the island maintain operating profit materially above 2024 even without the EUR 2.423 million of other income.

At the same time, the draft lease looks constructive because it extends operating certainty until 2056, but it is clearly not free. Fixed annual rent of EUR 625 thousand and a EUR 6 million renovation commitment are real obligations. Anyone who reads 2025 only as de-risking will miss that the new lease also raises the execution bar.

Cambodia has to prove that the value is not only in land

The second test is Cambodia. The sale signed in February 2026 could be a material positive trigger because the company expects about USD 11 million of pre-tax gain. But until the deal is registered and completed, that remains an event that still needs to happen, not cash that has fully arrived.

Beyond that, Cambodia has several pressure points converging into 2026:

• VAT on gaming revenue is expected to rise to 10% from 5% in 2025.
• Monthly rent on the operating property was increased after year-end to USD 50 thousand from USD 40 thousand.
• The current license is valid until December 31, 2026, and while the company says it sees no grounds for non-renewal, that is still a meaningful checkpoint.
• The venture already increased its registered capital to USD 25 million in March 2025 and deposited USD 1.25 million for the license, so continuing operations requires tied-up capital, not only growth.

That is why 2026 is not a year in which another land deal alone will be enough. It is a year in which the market needs to see whether the casino and hotel operation itself is stabilizing, or whether Cambodia remains primarily a land story.

The shared land remains an option, not the base case

The third test concerns the shared land through Vesanta. As long as expropriation and registration are incomplete, and as long as the company itself says realization is difficult in the near term, this asset should be read as a long-dated option rather than near-certain future cash. It may be the most tempting hidden asset in the story, but right now it is also the least accessible.

In that sense, what the market is likely to measure over the next few quarters is simple: how much cash actually comes in, how fast, and what remains after taxes, lease obligations, debt service, and reinvestment.

Risks

Earnings quality. NIS 26.4 million of other income created a large part of the gap between a very strong headline and a more moderate underlying business reality. That is not a flaw, but it does mean 2026 comparisons could turn quickly if no new one-off items arrive.

Cambodia. Weaker gaming revenue, higher headcount, higher VAT on gaming from 2026, and the higher post-balance-sheet rent all raise the bar. In addition, the new hotel wing remains on hold, and although the valuation concluded a recoverable amount of USD 4.2 million, this is still an asset waiting for demand rather than an operating growth project.

Greece. Rhodes has improved, but it still carries legacy issues. The company holds provisions for older tax assessments: about NIS 5.8 million for 1999-2000, about NIS 7.5 million for 2007-2011, about NIS 0.9 million for 2012-2013, and another about NIS 11.5 million for open years from 2020 onward. A Supreme Court hearing on the 2012-2013 case is scheduled for March 2026.

Value accessibility. The shared land is still not close to realization, the privately owned land is pledged, and upstreaming profits from Cambodia or Greece comes with another layer of tax. So even if the group creates value, not every shekel of value becomes shareholder value immediately.

Governance and FX. The court ruling against Zilka could affect control classification if implemented, even though the company itself is not a party to the claim. In addition, 2025 again showed how meaningful translation effects are here: other comprehensive loss reached NIS 15.4 million, mostly from translating foreign operations. The company also states that it does not use derivatives for hedging.

Conclusion

Queenco looks better today than it did a year ago, but not because all of its businesses are now clean and balanced. Rhodes genuinely improved, debt came down, and the Cambodia land sale proved that the balance sheet contains real value. The central blocker remains the gap between profit generated by recurring operations and profit created by asset sales or accounting recognition, and in the short to medium term that is exactly what will shape the market read.

Current thesis: Queenco is now a holding company with one clear and strong operating engine in Rhodes, while Cambodia still needs to convert land value and licensing into clean operating earnings and accessible cash.

What changed: The last year moved Queenco beyond a pure defense story. Rhodes genuinely improved, the Cambodian land proved its monetization value, and bank debt almost disappeared. But at the same time, Cambodia’s operating weakness became much clearer.

Counter-thesis: One could argue that the market is still too conservative, because the company has now proven both stronger Rhodes profitability and the ability to monetize Cambodian land at values far above book cost, so the combination of low debt and hidden assets could still unlock value faster than expected.

What could change the market read: Closing the February 2026 sale and receiving the cash, reporting Rhodes results without the one-off support, and clarifying the final lease terms in Rhodes are the first three items the market is likely to measure.

Why this matters: Anyone looking only at net profit sees a company that has stabilized. Anyone who breaks down the layers sees that a large part of the value still has to pass tests of accessibility, repeatability, and capital discipline.

What has to happen next: Over the next 2 to 4 quarters Queenco needs to complete the additional Cambodia sale, show that Rhodes can hold profitability even without one-offs, and prove that Cambodia can absorb higher tax and rent without another earnings slide. If one of those three breaks, the read on 2025 can quickly shift from recovery to one-off peak.