Malam Team Holdings: What Real Cash Flexibility Looks Like After Leases, CAPEX, and Development
The main article argued that Malam Team's growth still does not reach accessible cash fast enough. This follow-up shows that in 2025 almost the entire operating cash flow was absorbed by reported CAPEX, capitalized development, and lease principal, and once acquisitions and minority cash uses are included the real all-in bridge was roughly flat to slightly negative while most of the cash sat away from the parent shareholder.
What This Follow-Up Is Isolating
The main article made the broader point: Malam Team is still growing, but the real test has moved away from demand and toward how much cash actually remains after all the layers in between. This follow-up isolates that question directly and builds the cash bridge the stricter way, not the comfortable way.
The frame here is all-in cash flexibility. In other words, how much cash is left after the year's actual cash uses: reported CAPEX, capitalized development, acquisitions, lease-principal repayments, and cash paid to non-controlling interests. I am not building a maintenance-CAPEX bridge because the company does not disclose one. Also, the lease figure used here is lease principal repayment of NIS 63.9 million, not total lease-related cash outflow.
That distinction matters. Operating cash flow was NIS 173.9 million in 2025. After reported PP&E spending, capitalized development, and lease principal, only about NIS 19.3 million was left. Once Data Cube, the additional incubator investment, and minority-related cash uses are added, 2025 lands at roughly NIS 6.8 million negative on an all-in basis before new borrowing. Put differently, the cash balance did not rise because the business generated a large free surplus. It rose because the balance sheet rolled itself forward.
The Bridge: Almost All The Cash Was Spoken For
Operating cash flow fell to NIS 173.9 million in 2025 from NIS 250.2 million in 2024. Management itself attributes the main change to working-capital movements, and the statement supports that reading: receivables increased by NIS 52.8 million and inventory by NIS 3.2 million, partly offset by a NIS 115.3 million increase in suppliers and service providers. So this was not an operating-collapse year. It was a year in which more cash stayed trapped inside the cycle.
Even if that working-capital discussion is set aside, the cash bridge is still far from roomy. The group spent NIS 45.7 million on PP&E and equipment, mainly tied to the new data center, and another NIS 45.1 million on intangible assets and capitalized development. Those two items alone consumed NIS 90.7 million. That is the key point: part of the investment burden is not fully visible in current-period earnings, but the cash has already left.
The narrowest version of the bridge, the one that looks only at the existing business before acquisitions and minority cash uses, leads to an uncomfortable conclusion:
| Item | 2025 | Why It Matters |
|---|---|---|
| Operating cash flow | NIS 173.9m | Cash generated before investing and financing |
| PP&E and equipment | (NIS 45.7m) | Mainly spending on the new data center |
| Capitalized development | (NIS 45.1m) | Cash out even if not fully expensed today |
| Lease principal repayment | (NIS 63.9m) | A real recurring cash use that belongs in the bridge |
| Residual after the core business | NIS 19.3m | A very thin cushion for a group of this scale |
That NIS 19.3 million number matters more than the year-end cash balance. It says that even before counting Data Cube, the incubator, or minority-related cash uses, almost the entire operating cash flow was already consumed by infrastructure, development, and leases. This is not a distress picture. It is simply not the picture of a generous cash machine either.
The full all-in view makes the point sharper. Data Cube cost NIS 18.5 million, the additional investment in the technology incubator added NIS 2.5 million, and there were also NIS 3.0 million of dividends paid to non-controlling interests plus another NIS 3.0 million used to acquire non-controlling interests. Once those are included, the year drifts to roughly flat and slightly negative. That is exactly what a reader can miss if they stop at the NIS 500.9 million cash number on the balance sheet.
Cash Rose, But Mainly Because Debt Was Rolled
Year-end consolidated cash did rise to NIS 500.9 million from NIS 468.5 million. On a quick read that looks like stronger flexibility. In substance, most of that improvement came from financing rather than from cash genuinely left over after the year's needs.
The bridge is straightforward. The group raised NIS 290.0 million of long-term liabilities, repaid NIS 288.2 million of long-term liabilities, and increased short-term bank credit by a net NIS 38.5 million. In other words, the banking layer added about NIS 40.2 million net. That is almost the entire difference between the slightly negative all-in bridge described above and the actual increase in cash on the balance sheet.
This is not necessarily a red flag. The covenant table shows that Malam Team is not sitting at the edge of the cliff. It remained comfortably inside its financial tests: about NIS 762 million of equity versus a NIS 320 million minimum, an equity-to-assets ratio of about 29% versus a 20% minimum, and net debt to EBITDA of about 0.60 versus a maximum of 3. In plain language, this is not a story of immediate funding stress or a nervous bank group. It is a different story: the consolidated cash balance is large, but it is not the same thing as free distributable cash.
| Metric | 31.12.2025 | What It Really Says |
|---|---|---|
| Consolidated cash and equivalents | NIS 500.9m | A large number, but not cash sitting freely at the parent |
| Consolidated bank debt | NIS 684.6m | Higher than cash, so the cash balance cannot be read in isolation |
| Lease liabilities | NIS 286.8m | A reminder that leases are both economic debt and recurring cash use |
| Net financial debt | NIS 183.8m | Far from distress, but clearly not a net-cash position |
The maturity profile adds another layer of discipline. The group ended 2025 with NIS 443.2 million of current bank debt and another NIS 241.4 million of non-current bank debt, alongside NIS 51.2 million of current lease liabilities and NIS 235.6 million of non-current lease liabilities. So even with wide covenant headroom, 2026 still starts from a structure that demands funding discipline. That is exactly why the no-dividend decision in March 2026 reads as rational rather than temporary.
How Much Of That Cash Is Actually Accessible To The Parent
This is the most important gap between cash inside the group and cash actually accessible to Malam Team Holdings shareholders. On a solo basis, the parent carries no bank debt, which is a positive. But it also does not carry a large cash box. At year-end 2025 the parent had NIS 11.2 million of cash and equivalents and another NIS 13.2 million of financial assets at fair value, for total current assets of NIS 24.9 million.
Those numbers are not bad for a lean holding company. They are very small relative to the consolidated cash balance of NIS 500.9 million. That is the difference between value that exists somewhere inside the group and value that actually sits at the parent level.
The direction of travel in 2025 matters too. The parent-only cash-flow statement shows no dividend received from held companies during the year. In other words, there was no upstream cash arriving at the parent in 2025. On the contrary, solo operating cash flow was negative NIS 0.8 million and solo investing cash flow consumed NIS 4.6 million, partly because the parent bought more Malam Team shares and made the additional incubator investment.
That also explains the post-balance-sheet dividend decision. On March 12, 2026, Malam Team's board decided not to distribute a dividend for 2025 and not to set a dividend policy for 2026 at this stage, mainly in order to keep reducing net financial debt and finance expense. That statement cuts through the noise: for now, the subsidiary prefers to direct cash toward balance-sheet strengthening rather than upstreaming it.
This is also why the tender offer, important as it may be, is not a cash solution on its own. If completed, it can shorten the structural distance between the operating business and the parent shareholder and remove part of the value leakage through minorities. But it is a share-exchange offer at a ratio of 0.555 parent shares for each Malam Team share, not a cash transaction. It can improve structural access to value. It does not create fresh cash in the near term.
Bottom Line
The thesis of this continuation is simpler than the full-company story, and that is exactly why it matters. Malam Team Holdings is not under funding stress today. It is also not sitting on a large pool of free cash waiting to be distributed. In 2025 operating cash flow was barely enough to cover reported CAPEX, capitalized development, and lease principal, and once acquisitions and minority cash uses are added the all-in bridge is essentially flat to slightly negative.
For parent shareholders, that means the right number is not the NIS 500.9 million of consolidated cash. The right number is the distance between that cash and the layer they can actually reach. At the end of 2025 that distance remained wide: a small solo cash box at the parent, zero dividend received during 2025, and an explicit subsidiary decision to keep cash for debt reduction rather than move it up the chain.
So the 2026 test is not whether the business can grow. It has already shown that. The test is whether anything genuinely accessible starts to remain after leases, CAPEX, and development. Until that happens, structural simplification may improve the picture, but it cannot replace cash itself.