Ramot Ba'ir 2025: Stage C Reached Delivery, But 2026 Still Depends on Collections and Refinancing

Getting To Know The Company

Ramot Ba'ir is now a bond-listed residential developer, not a classic yielding real-estate company. Its near-term engine sits in Halutz Ramat Hasharon Stage C, the next execution layer sits in Project Mofet, and the longer-dated optionality sits in Halutz Stage D, the Hahagana land in Tel Aviv, the Nitzanim land in Haifa, and the Prague activity. That is why the right way to read 2025 is not to ask whether the company has land and projects. It does. The real question is how much of that value is already on its way to cash, and how much is still trapped inside permits, marketing, financing, and planning disputes.

What is working now is clear enough. Revenue rose to NIS 229.6 million, Halutz Stage C reached Form 4 in January 2026, Prague already generated NIS 43.2 million of revenue in 2025, and equity rose to NIS 162.9 million. In other words, the company is not stuck at the concept stage. It has one project ready for delivery, another layer already in execution, and additional assets that may create real value later on.

But this is not a clean picture. Gross profit fell to NIS 70.5 million from NIS 100.6 million, finance expenses jumped to NIS 49.2 million from NIS 29.0 million, and net profit almost disappeared to just NIS 3.8 million. Operating cash flow remained negative at NIS 84.3 million, and year-end cash fell to NIS 24.9 million. Put differently, the company completed the construction phase of its main project before it completed the funding-pressure phase.

That is the heart of the story. Anyone reading 2025 only through the rise in revenue will miss that the company has already moved from “can it build” to “can it collect, deliver, and roll the debt until the next layer matures.” The tradable security here is a bond, not an equity share, so that is also the practical reading frame: the real test is not theoretical paper value, but whether the company can hold its financing structure together, pull surplus cash out of projects, and avoid leaning too long on debt extensions.

Ramot Ba'ir’s economic map at the end of 2025 looks like this:

That chart puts the story in the right order. Most of Ramot Ba'ir’s future profit still sits in Mofet and Halutz Stage D, not in the project that already reached delivery. That is exactly what makes 2026 a bridge year: the cash that is supposed to carry the system in the near term comes mostly from Halutz Stage C, while the larger earnings layers still sit further out on the timeline.

Events And Triggers

Halutz Stage C, construction is over, the collections test is only starting

The nearest earnings event happened after the balance-sheet date. On January 6, 2026, the company received the completion certificate and Form 4 for Halutz Ramat Hasharon Stage C, a 171-unit building of which 123 units were allocated to the company, and by that date it had already sold 114 of them. This is an important turning point, because the annual report shows only NIS 16.4 million of revenue still expected to be recognized from the project in 2026, against NIS 263.3 million of customer payments and advances still expected to be collected in 2026. So the next phase is no longer about large new accounting recognition. It is about collections.

That point matters because the company openly says that 2025 marketing in this project also relied on concessions. Six buyers, about 5% of the buyers, received contractor-financed loans. About 90 buyers, around 79% of buyers in the project, received exemption from construction-input indexation, across contracts totaling about NIS 295 million excluding VAT. In addition, 79 units, around 70% of the units sold, were sold under payment structures with 15% to 25% at signing and the balance close to delivery. The company stresses that no transactions were cancelled apart from one apartment, but the quality of those sales now depends on a smooth move from sale to handover to final payment.

There is another detail that is easy to miss if one stops at the headline. The project’s estimated total gross margin fell to 40% in 2025 from 41% in 2024 and 2023, and the company explains that the decline was driven mainly by a discount given to a buyer that purchased a block of 30 apartments or more, alongside higher construction-input costs. In other words, even in the company’s most mature project, part of the marketing outcome was preserved through economic concessions, not only through clean demand.

That chart sharpens the thesis. In the next report, the market will not be looking for another big revenue jump from Halutz Stage C. It will be looking for proof that the customer money actually came in.

Mofet, the next profit layer is still soft

If Halutz Stage C is the collections layer, Mofet is the future earnings layer. The project is 90%-owned by the company, execution started in the first quarter of 2025, completion stands at only 5%, and estimated total gross profit on a 100% basis reached NIS 175.8 million at the end of 2025, or about NIS 158.3 million on the company’s share. At first glance, that looks like a major engine moving into place.

But Mofet is still not funding the company. As of the report date, only 12 apartment-sale agreements had been signed, and the down payments under those agreements were below 65.5%. That is why the company itself says those contracts do not qualify as “binding sale agreements” under the relevant proposed disclosure framework. It is a small note with large meaning: there are sales, but not yet the kind of contract layer that lets investors read the project as if it had already closed its funding gap.

Growth quality here also needs caution. In Mofet, the first payment was made either as one payment or as several payments, and all eight of the first buyers received easier payment terms. So for now, Mofet is an earnings engine on paper, not a cash engine in practice.

Halutz Stage D, attractive on paper, but still not a funding project

Halutz Stage D looks good on paper. The company expects NIS 357.7 million of revenue, NIS 95.1 million of gross profit, and a 27% gross margin. But there are still no sales, and the company admits that it has not yet injected the full equity required to open the construction financing, NIS 51.5 million, and has not yet sold the first 15 apartments totaling at least NIS 64 million excluding VAT as required under the financing agreement.

The yellow flag here is not an immediate breach. The lender knows where the project stands and has not approached the company. The yellow flag is different: Halutz Stage D still sits in the option layer while the company already needs it as part of the next-step story.

Hahagana, value exists, but the path from value to cash is still closed

The Hahagana project in Tel Aviv may be the most tempting asset in the report, but it is also the most dangerous one for a shallow reading. The value stayed at NIS 204 million at the end of 2025, the same as in 2024 and 2023. The company holds 90% of the asset through Ramot Office, and the land is leveraged with a NIS 130 million loan. On the surface, this looks like a strong balance-sheet anchor.

But behind the stable number sits a much less settled picture. The principles document with Ichilov, signed in March 2023, still has not become a full binding agreement even though the original dates have expired. The company says it believes it will be able to extend it, but in the same breath says it intends to reassess the cooperation in light of the legal proceeding over the permitted uses of the land.

There is a particularly important paradox here. The appraisal gives no value to the Ichilov cooperation, which is conservative. But it does assume that assisted-living and student-housing uses can be taken into account, even though the company itself is suing the Tel Aviv municipality and local planning committee for around NIS 200 million precisely over alleged misrepresentations regarding the main permitted uses at the site. In other words, the valuation does not include the Ichilov upside, but it does rest on a planning interpretation that is still unresolved.

That does not make the valuation wrong. It does mean Hahagana should be read through the word “conditional,” not through the word “realized.”

Efficiency, Profitability, And Competition

The core insight in 2025 is that the company managed to grow revenue without preserving the same earnings quality. The comparison needs some care because the company retrospectively applied Staff Position 11-6 on urban-renewal transactions, so prior periods were restated as well. But even on the restated basis, the direction is clear: revenue rose, gross profit fell sharply, and financing consumed almost all of the improvement.

Revenue rose to NIS 229.6 million from NIS 218.0 million, but gross profit fell to NIS 70.5 million from NIS 100.6 million, and operating profit declined to NIS 53.8 million from NIS 87.6 million. Finance expenses climbed to NIS 49.2 million from NIS 29.0 million, and profit before tax dropped to just NIS 8.9 million. That is not a random weakening. It is the result of a business that grew into more expensive capital layers while the next development layers still did not provide a matching cash-generating profit engine.

That chart shows the paradox better than any formula. In 2025, revenue still rose, but the fastest-moving line is the financing line.

Where growth is real, and where it is already getting diluted

Out of the NIS 229.6 million in revenue, NIS 186.4 million came from Israeli development and NIS 43.2 million came from overseas development in Prague. Israeli development still generates most of the money, but even there the quality of recognition depends heavily on the payment structure. In Halutz Stage C, the company has already recognized almost everything, and from here the story becomes collections. In Prague, it already recognized NIS 43.2 million of revenue, but the project’s total expected gross profit is only NIS 4.9 million, a 6.2% gross margin. That adds activity and some cash support, but it does not resolve the broader question of profit quality.

Mofet is the reverse image. The expected margin is attractive, 26%, but the sales layer is still not hard enough to serve as a financing anchor. So the company now holds, at the same time, one project that is ready for handover, one promising project under construction, and another project, Halutz Stage D, that has not started selling yet. That mix creates a lot of potential, but it also creates a lot of overlap between financing layers.

The real competitive signal is not price alone, but terms

The housing market in this report should not be read through apartment counts alone. It should be read through terms. Ramot Ba'ir explicitly says that in a market shaped by high rates, war, and only partial recovery, it offers contractor loans, indexation waivers, and more flexible payment terms. That is not automatically a failure. It simply means the right question is not whether demand exists, but who is financing it.

That is exactly the difference between ordinary growth and growth that buys time. In Halutz Stage C, the company reached a 90% sell-through rate, but a meaningful share of that sell-through came with concessions. In Mofet, there are transactions, but the deposits are still too low to create a binding backlog in funding terms. So even if the sales numbers look good at first glance, they still do not translate one-for-one into cash quality.

Cash Flow, Debt, And Capital Structure

The right way to read Ramot Ba'ir’s cash flow this year is through an all-in cash flexibility frame, meaning how much cash remained after all actual cash uses, not just after accounting profit or before debt. On that basis, 2025 was still a net cash-burn year.

The company started 2025 with NIS 46.0 million of cash and cash equivalents and ended with NIS 24.9 million, a net decline of NIS 21.0 million. That happened despite NIS 65.8 million of net financing cash inflow, including, among other items, the net issuance of Series D bonds for about NIS 62 million, a refinancing and increase of the Hahagana loan by about NIS 18 million, net credit drawdown of about NIS 10 million in Halutz Stage C, and NIS 10 million of capital notes from controlling shareholders. In other words, even after a fresh financing layer, the company did not generate more cash. It only slowed the burn.

What matters here is the persistent gap between profit and cash. Even after moving from NIS 46.0 million of net profit in 2024 to NIS 3.8 million in 2025, the company still did not turn operating activity positive. The negative cash flow mainly reflected payments to the Halutz Stage C contractor, payments on additional urban-renewal projects, and interest payments on bonds and loans, partly offset by customer receipts.

The working-capital deficit fell, but that is not the same thing as cash comfort

The consolidated working-capital deficit did improve sharply, to NIS 43.2 million from NIS 200.8 million in 2024. That is a meaningful accounting relief. But the company itself does not read it as a problem solved. On the contrary, it devotes an entire section to a forward cash-flow bridge and a 2026 sources-and-uses map, which is a clear sign that the analytical center of gravity remains on funding.

The company explicitly lays out that its 2026 bridge relies on several heavy assumptions:

1. Extension of the Mofet land loan, NIS 179 million, until construction financing opens.
2. Extension of the Nitzanim loan, NIS 30 million, for another year.
3. Extension of the Ganei Dan Ashkelon loan, NIS 70 million.
4. Use of Prague sales and Halutz Stage C surplus cash to repay the institutional loan.
5. An additional NIS 30 million capital-note issuance from controlling shareholders and or companies under their control.

None of that means the company is heading into an immediate default event. It does mean that the 2026 story is not “another normal contractor year.” It is a story in which collections, construction financing, and debt extensions all have to work together.

That chart explains why the right word here is “refinancing,” more than “covenant.” The company has collateral, it has projects, and it states that it remains in compliance with its financial tests. But the 2026 work plan is still very crowded.

Covenants are not the immediate issue, the execution wall is

It is important to be fair on this point. In the report and the notes, the company says it is in compliance with the bond and loan covenants, and that to the best of its knowledge there are no immediate-acceleration grounds. Even in Halutz Stage D, where the preconditions for opening financing have not yet been completed, the lender knew the situation and did not approach the company.

That matters because it clarifies the type of risk. The immediate risk is not a technical covenant edge. The risk is execution and funding congestion: too many layers that must happen on time, with too little room for error.

Outlook

The four most important takeaways for 2026 are not obvious:

First takeaway: Halutz Stage C has shifted from a construction engine to a collections engine. The company already recognized NIS 372.1 million of revenue there through year-end 2025, and only NIS 16.4 million remains to be recognized in 2026. The large number still ahead is cash, NIS 263.3 million of customer payments expected in 2026. So the next reading of the company will focus far more on delivery pace, buyer quality, and final collections than on revenue.

Second takeaway: Mofet carries most of the future earnings power, but still does not provide a matching financing layer. Expected gross profit stands at NIS 175.8 million on a 100% basis, but the first 12 deals still do not qualify as binding contracts in the way the company itself highlights. So this project has not yet replaced Halutz Stage C as a source of liquidity.

Third takeaway: Halutz Stage D still has not moved from “potential” to “execution.” The expected margin is attractive, 27%, but there are no sales, no full equity injection, and no 15 presales to open financing. So it cannot yet serve as a liquidity backstop for 2026.

Fourth takeaway: Hahagana is an asset that may one day drive a step change, but for now it is more a planning and legal test than a liquidity solution. The appraisal has not lifted the value above NIS 204 million for three straight years, the Ichilov document is still not binding, and the lawsuit against the Tel Aviv authorities is still at an early stage.

Taken together, those four points make 2026 look very clearly like a bridge year with a collections-and-refinancing test, not a clean breakout year.

The company itself hints at that through its macro framing as well. On one hand, it says inflation moderation has already led to rate cuts and may lead to further cuts that could help both financing costs and housing activity. On the other hand, its own discussion of the housing market still describes a slowdown, high unsold inventory, and sales volatility against the war backdrop. That matters because it shows management is not reading 2026 as an easy selling environment.

At the same time, there are several triggers that could improve the reading:

If Halutz Stage C collects well, pressure should ease

This is the first trigger. The company has a completed project, 114 sold units, and project surplus that should start to unlock. If handovers proceed smoothly, and if buyers meet the final payment stage, that will be the most important proof point of 2026.

If Mofet turns from soft sales into financing-supportive sales, the thesis gets stronger

Mofet is the heart of the next phase. If the company can improve deposit quality and convert initial interest into a contract layer that supports financing and working capital, the market will be able to see a real engine there, not just an attractive projected profit table.

If Hahagana stays stuck, the value stays mostly a number

The Tel Aviv asset matters a great deal, but as long as there is no clear solution to the permitted-use dispute, and as long as Ichilov remains only an expired principles document rather than a full agreement, that value will stay distant from both investors and bondholders. More than that, the appraisal itself assumes uses that are still disputed, so even valuation stability is not the end of the story.

Prague helps, but it cannot rescue the year on its own

The company assumes NIS 10 million of cash return to the parent in 2026 from sales in the Zelene Mesto project, and by the report date it had already sold 49 units there and returned about NIS 7 million. That is a useful addition, but not one that solves the 2026 wall by itself.

Risks

The first risk is collections quality. In Halutz Stage C, the company reached a high sell-through rate, but a material share of those sales relied on indexation waivers, contractor-financed loans, and deferred payment structures. If the handover stage runs into buyer weakness, what looks today like project surplus may move slower than expected.

The second risk is refinancing. There are too many 2026 funding tests, the Mofet loan, the institutional loan, Series B, Nitzanim, and Ganei Dan, not to treat this as the active bottleneck. The company does not look close to an immediate technical breach, but it does look dependent on continuity in funding markets and lender cooperation.

The third risk is trapped value. Hahagana and Nitzanim are meaningful assets, NIS 204 million and NIS 79.4 million respectively, but both still depend on planning, permits, or use interpretation. That is value that exists, but not yet in liquid form.

The fourth risk is execution in the next project layers. Mofet is still only 5% complete, Stage D has not opened financing, and the company itself highlights higher construction costs. If the next stage slips, the company may find itself with one project delivered but with the rest of the balance sheet still demanding cash.

The fifth risk is governance and layering of interests. In several of the central assets, Mofet, Hahagana, and Prague, the company’s share is 90%, not 100%. That does not negate the economics of those projects, but it does mean project-level numbers always need to be translated through the partner layer.

Conclusions

Ramot Ba'ir finished 2025 in a position that is complicated but readable. It has one main project that already reached delivery, another project with large future profit potential, and several meaningful option assets. What supports the thesis now is that the company is no longer at the dream stage, but at the point where Halutz Stage C is supposed to start bringing cash back. What blocks a cleaner thesis is that the next layer is still not mature enough, and the whole system still depends on collections, financing, and debt extensions.

Current thesis: 2025 closed the execution phase of Ramot Ba'ir’s main project, but 2026 will be judged mainly by the company’s ability to turn delivery into cash and to fund the bridge until Mofet and the option assets become more than projected earnings.

What changed versus the previous read of the company? It used to be easier to read Ramot Ba'ir as a developer still on the way. After 2025, that is no longer accurate. Halutz Stage C is done, Prague is already selling, and the likely point of failure has shifted from construction to the conversion of profit into cash.

Counter-thesis: If Halutz Stage C handovers and collections work well, if the Mofet land loan is extended until construction financing opens, and if Mofet begins to convert soft sales into a real financing layer, then 2025 will look in hindsight like a necessary transition year rather than a year of erosion.

What may change the market’s reading in the short to medium term? The pace of collections in Halutz Stage C, the extension of 2026 debts, the quality of sales in Mofet, and any sign that Hahagana is moving from dispute and valuation into a clearer use path.

Why does this matter? Because at Ramot Ba'ir the value has already been created across several balance-sheet layers, but what will decide 2026 is whether the company can turn that value into accessible value instead of simply rolling it forward again.

Over the next 2 to 4 quarters, the thesis strengthens if Halutz Stage C collections come through cleanly, debt extensions are arranged in time, and Mofet moves from soft sales into financing-supportive sales. It weakens if the company remains dependent on another bridge layer without real progress in Mofet and Stage D.