Sugat And The RMI Settlement: How Much Of 2025 Profit Is Accessible Cash And How Much Still Depends On Milestones
The RMI settlement created real economic value for Sugat, but in 2025 only NIS 50 million of it was cash already received. The rest of the value booked in earnings and on the balance sheet still depends on permits, staged evacuation, and offsetting obligations to the RMI.
What This Follow-Up Is Isolating
The main article already established that the RMI settlement is the reason Sugat’s 2025 headline looks much larger than its normal operating profit. This continuation isolates a narrower question: how much of the RMI effect has already become cash that is actually available, and how much still sits as receivables, liabilities, and execution milestones.
That distinction matters because the RMI settlement is not a simple capital gain. It creates real economic value, but that value is split between cash already received, discounted future compensation, lease and permit payments that Sugat will have to pay back to the RMI, and the rebuilding of the operating setup in Ein Evrona. Anyone reading 2025 as if the NIS 91.1 million lease-modification gain is already free cash is reading this line incorrectly.
2025 Profit Was Born In The Fourth Quarter, But Not In Cash
Profit for the period in 2025 was NIS 107.2 million, of which NIS 102.9 million was attributable to shareholders. In the fourth quarter alone, profit reached NIS 82.7 million. The line that explains almost all of that jump is other income, net: NIS 92.4 million for full-year 2025, and NIS 92.6 million in the fourth quarter. In other words, in the quarter that generated the year’s earnings headline, most of the effect came from the RMI settlement, not from a matching step-change in the operating core.
Management’s presentation signals the same point. In adjusted EBITDA, the company neutralizes NIS 90.8 million related to capital gains and the RMI settlement. That matters not because the adjusted metric is the only truth, but because management itself is separating the operating run-rate from the accounting event.
The more important point sits in Note 11. Sugat did not record the settlement as a receipt that will be recognized only as cash arrives over time. It separated two different components: the shortening of the existing Eilat lease, and the new leases in Ein Evrona. For the shortening of the existing lease, the company attributed the entire NIS 50 million cash already received plus the present value of the remaining compensation, NIS 161.76 million. Together that is NIS 211.76 million. Against that amount, it derecognized NIS 116.55 million of right-of-use assets in Eilat and another NIS 4.10 million of leasehold improvements. The remainder, NIS 91.11 million, was recognized immediately in profit or loss.
That is the center of the story. The profit came mainly from the way the old lease was shortened and the new compensation was measured, not from the moment new money actually became available to shareholders.
How Much Cash Actually Arrived, And Where It Sits
In terms of actual cash, the RMI settlement contributed one amount that had already arrived in 2025: NIS 50 million at the time the agreement was signed. No more than that. Even that amount does not appear in operating cash flow. It appears in investing cash flow. That is easy to miss. Anyone trying to connect 2025 earnings with core cash generation has to remember that the RMI receipt did not pass through the operating line.
| Layer | 2025 amount | What it means in practice |
|---|---|---|
| Profit for the period | NIS 107.2 million | The accounting headline of the year |
| Profit attributable to shareholders | NIS 102.9 million | What remained for shareholders in the income statement |
| Lease-modification gain | NIS 91.1 million | The accounting gain created in Note 11 |
| Cash already received from the RMI | NIS 50.0 million | The only settlement cash that had entered by year-end 2025 |
| Long-term RMI-related receivable | About NIS 163.0 million | A future contractual right, not cash in the bank |
| RMI lease and permit liabilities | NIS 48.2 million | The cost already booked against the new rights |
The year-end balance sheet sharpens the gap. On one side, there is a long-term receivable of about NIS 163 million and RMI compensation receivable of NIS 162.6 million. On the other side, there is already NIS 48.2 million of lease and permit liabilities to the RMI. So as of December 31, 2025, Sugat was already carrying both the promise and part of the bill on its balance sheet, but still not most of the cash.
The note also adds that, as part of the accounting for the new Ein Evrona leases, the company recognized a right-of-use asset and a lease liability of NIS 47.79 million. That matters because the settlement did not only close an old dispute. It also opened a new liability layer that was already recorded before the operational move was completed.
How Much Still Depends On Milestones
Under the agreement, the RMI is supposed to pay Salt Haaretz Eilat NIS 240 million in four stages: NIS 50 million already paid at signing, another NIS 50 million upon receipt of a building permit or the start of works in Ein Evrona, whichever is later, NIS 85 million upon completion of the first stage, and NIS 55 million upon completion of the second stage. Inside the second payment there is another important condition: for NIS 30 million of that amount, the company must provide a performance guarantee that will only be returned at the second stage.
At the same time, Sugat is not only receiving. It is also paying. The agreement requires the company to pay the RMI NIS 60 million: NIS 41 million upon completion of the first stage for the lease of 649 dunams in Ein Evrona, NIS 10 million in seven annual payments for usage rights in 251 dunams, and NIS 9 million upon filing for the building permit for the industrial plot on which the new plant will be built.
This chart shows why the settlement is better read as a seven-year funding and execution bridge, not as a pot of cash that opened at once. Out of NIS 240 million of contractual compensation, NIS 60 million goes back to the RMI, and only NIS 50 million had already been received by the end of 2025. That means about NIS 130 million of the settlement’s net economics still depends on milestones that have to happen in the real world.
And that is before bringing in the operating requirement. The investor presentation describes a gradual seven-year transfer of the salt ponds and plant from Eilat to Ein Evrona, including adapting the pond system and building a new plant in the area. So even the future contractual net is not the same thing as free cash. Part of it is meant to finance a real relocation process, not to remain excess capital.
What Shareholders Actually Keep From The RMI Settlement
The right way to read 2025 is not that the profit is fake. That would be too simplistic. The economic value created in the RMI settlement is real, because it regularizes land use, reduces legal uncertainty, and creates a workable path toward Ein Evrona. The problem is different: that value was recognized in the income statement well before it became free cash.
In shareholder terms, the gap is sharp. 2025 shows NIS 102.9 million of profit attributable to shareholders, but only NIS 50 million of cash actually came in from the RMI settlement, while most of the effect was recorded as long-term receivables and as a lease-modification gain. At the same time, Sugat is already carrying new lease and permit liabilities, and it still has to move through permits, work commencement, the first-stage evacuation, and the second-stage completion before the rest of the value turns into contractual cash.
That is why the key question for 2026 and 2027 is not whether the RMI created value for Sugat. The question is conversion speed: how quickly the long-dated receivable moves toward cash, how much of that cash gets absorbed by payments and rebuilding, and whether Sugat’s operating core keeps producing cash while the salt transition is still underway.
Conclusion
The RMI settlement really changed Sugat’s economics, but not in the way the 2025 headline suggests. It created a NIS 91.1 million accounting gain, brought in NIS 50 million of cash already in 2025, and opened a discounted future right worth about NIS 163 million. Against that, it also created new liabilities to the RMI, a long milestone schedule, and an operating transition that continues to consume time and capital.
The cleaner reading is this: 2025 profit arrived ahead of cash. What is already accessible in the bank is far smaller than the headline, and what is still not accessible is much larger than it looks at first glance. For a reader coming to Sugat through the 2025 report, that is the difference between profit already captured in hand and profit that still has to pass through permits, staged evacuation, and execution.
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