Lesico In Ghana: The Invoices Are Approved, But Collection Is Not Closed
Lesico has 11 approved Ghana progress bills totaling about EUR 59.2 million, yet approved debt of roughly EUR 15.8 million is still not included in receivables. That makes Ghana a collection-and-funding test, not a minor accounting footnote.
What This Follow-up Is Isolating
The main article argued that profit came back at Lesico, but the cash case was still open. This follow-up isolates the most sensitive link inside that argument: the Ghana project. Not the whole Ghana story, but the gap between what the customer has already approved, what has actually been paid, and what the company was willing to carry in the financial statements.
The core message is straightforward. The invoices are approved, but collection is not closed. By the end of December 2025, the subsidiary had submitted 11 approved progress bills totaling about EUR 59.2 million, equal to 69.55% of the contract value. At the same time, approved debt of about EUR 15.8 million, roughly ILS 59.2 million, was not included in receivables. That creates a material gap between approved economic progress and what actually shows up on the receivables line.
What matters is that this gap does not come from a project that is already losing cash. The company states explicitly that actual receipts from the project exceed actual project costs to date, meaning project-level cash flow is positive. So Ghana is not currently evidence of a cash hole that has already opened. It is evidence that Lesico chose a more conservative recognition profile in 2025 while the funding and collection route was still not fully back on track.
| Key metric | End of 2025 | Why it matters |
|---|---|---|
| Cumulative approved bills | EUR 59.2 million | The customer has already approved most of the work progress accumulated so far |
| Share of contract approved in bills | 69.55% | Approved progress is already above the completion rate |
| Completion rate | 61.92% | The project still advanced in 2025, it did not fully stop |
| Outstanding approved debt | EUR 15.8 million | This is the heart of the collection risk |
| Receivables and retentions on the books | About ILS 28.6 million | The accounting balance is far more conservative than the approved billing position |
| Project cash profile | Actual receipts exceed actual costs | This is not, for now, a cash-burning project |
This is not a random accounting number. According to the note, project receivables and retentions of about ILS 28.6 million are equal to the remaining advance balance that has not yet been netted. In other words, the balance sheet is largely reflecting what has already been covered by cash in advance, not the full amount of work that has already been approved.
Revenue Recognition Stopped Even As The Project Advanced
This is the least intuitive part of the filing. Project completion moved up from 54.37% at the end of 2024 to 61.92% at the end of 2025. Yet cumulative revenue recognized on the project stayed at ILS 184.0 million at both year-end 2024 and year-end 2025. That is not a technical accident. It is a presentation choice.
Management explains that the 2025 decline in revenue was driven in part by the decision to recognize revenue in the foreign project based on actual receipts. In plain terms, as long as the payment mechanism did not fully normalize, Lesico did not turn engineering progress into accounting revenue just because the work had been performed and the bills had been approved. That is a more conservative posture, and in this case it explains why Ghana looks weaker in the reported numbers than the economic progress on site might suggest.
That discipline was not limited to the revenue line. The company also says the sharp fall in other income came mainly from deferring interest income related to payment delays in the Ghana project, in line with company policy. Lesico did not only slow revenue recognition. It also avoided inflating profit through late-payment interest. That does not remove collection risk, but it does show that the Ghana gap is first a gap between approved billing and cash received, not a gap created by aggressive accounting.
What does that mean economically? The 2025 filing is probably more conservative than the engineering picture, but not necessarily more conservative than the cash picture. If the approved bills are collected, that conservatism will look like a quality control mechanism in hindsight. If collection keeps dragging, the same conservatism simply highlights how large the unresolved gap still is.
Not A Cash Sink, But Not A Closed Collection Story Either
It is easy to read Ghana through two imprecise extremes. The first is to treat the EUR 15.8 million as almost cash because the bills are approved. The second is to read the project as if it were already stuck from a cash perspective. The filing supports neither view.
On one side, during June and July 2024 the subsidiary received several payments that totaled about EUR 9.6 million, paid in the local currency. The company also says that substantial amounts were later transferred to the Italian subsidiary's bank account, and that after those payments the project completed the significant pipe-laying stage. This matters. There is real payment evidence here, and there is also a direct link between cash received and execution progress.
On the other side, the same section says the remaining parts of the project are being executed at a significantly slower pace than originally planned, in coordination with the customer's representatives. The critical reason is that the drawdown period from the financing bank has already ended, and as of the reporting date no formal update had been received from the customer regarding continued project financing under the original structure or a new one. That is the real risk. The argument is no longer about whether the customer accepts the work. It is about how and when the funding chain resumes payment.
The filing also shows where management's optimism comes from. The company stresses that the project has national importance and high economic and social impact, and therefore expects it to receive budget and completion priority, whether through dedicated financing or through the country's own resources. On that basis, management says it assesses the collection prospects of the approved invoices as highly likely. That is a legitimate management judgment, but as of year-end 2025 it is still not the same thing as closed collection. What is missing is not another explanation. It is a formal funding route and cash in the bank.
What The Market Needs To See Next
The first trigger is obvious: actual collection of part of the EUR 15.8 million. Not more theoretical progress and not another explanation about national importance, but cash that starts closing the gap between approved billing and the accounting balance.
The second trigger is a renewed financing framework, or at least an official update on the next payment route. As long as the company says it still has no formal customer update on continued financing, the market is likely to keep discounting the approved invoices. The logic is simple: a state infrastructure project can be important, approved, and still advance, yet remain slow for a long period if the financing chain itself is unresolved.
The third trigger is a return to a less constrained execution pace without Lesico's own balance sheet having to carry the bridge period again. The filing actually shows discipline here: revenue was tied to receipts, late-payment interest was deferred, and the project remains cash-positive so far. But for that thread to move from a conservatism test to a value driver, execution, funding, and collection need to start moving together again.
Conclusion
Ghana is not evidence that Lesico got the project economics wrong. It is better read as evidence that Lesico was not willing in 2025 to turn approved progress into full accounting profit while the collection path remained partial. That distinction matters. The approved invoices support the existence of a real economic claim. The conservative recognition reminds investors that the claim has not yet closed into cash.
This follow-up therefore does not change the main article's core thesis. It sharpens it. We already saw a sign of life in Lesico's profitability. In Ghana we also saw a project that the customer continues to approve and that has already proven it can generate receipts. What we still have not seen is full closure: recurring collection, a clear funding framework, and a smaller gap between what is approved and what enters the accounts. Until that happens, Ghana will remain much more of a collection-and-funding test than a question of accounting optimism.
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