M.V. Investments: How Much of 2025 Profit Actually Reached the Cash Box
M.V. Investments ended 2025 with ILS 7.9 million of net profit, but only ILS 1.8 million of free cash sat on hand, while ILS 41.4 million was restricted. This follow-up breaks down the quality gap between appraisal gains and finance income on the one hand, and cash actually available for debt service on the other.
The main article already showed the gap between a growing asset base and liquidity that still depends on financing. This follow-up isolates the more important 2025 question: how much of profit actually turned into free cash, and how much remained accounting profit, a receivable from controlling shareholders, or cash trapped in designated accounts.
Three points stand out immediately.
- Net profit came in at ILS 7.9 million, but operating cash flow was negative ILS 5.9 million.
- Year-end cash and cash equivalents were only ILS 1.8 million, against ILS 41.4 million of restricted cash.
- Finance income was ILS 11.8 million, but roughly ILS 9.3 million of that came from controlling shareholders and related parties, while balances due from them still stood at ILS 91.5 million at year-end.
The relevant lens here is all-in cash flexibility. The question is not how much value was created on paper before cash uses, but how much cash remained after interest, repayments, project investment, and restrictions on available funds. On that basis, 2025 does not look like a profit year that really landed in the cash box. It looks like a year in which accounting earnings bought time, while practical liquidity still relied on collections from controlling shareholders, releases from trustee accounts, and fresh financing moves.
| Layer | 2025, ILS million | What it means |
|---|---|---|
| Net profit | 7.9 | The headline accounting result |
| Operating cash flow | (5.9) | Profit did not convert into operating cash |
| Year-end cash and cash equivalents | 1.8 | This is the free cash box |
| Restricted short-term cash | 41.4 | This is earmarked, not freely deployable cash |
From Profit to Cash Flow, the Real Gap
The core reason for the gap is that 2025 earnings leaned on items that do not hit cash at the same speed. Fair-value gains on investment property reached ILS 26.9 million, far above the entire net profit line. At the same time, the income statement included ILS 11.8 million of finance income, most of it from controlling shareholders. Both items can be fully legitimate under accounting rules, but they are not the same thing as free cash.
The cash-flow statement makes that explicit. The adjustment for fair value on investment property deducted ILS 26.9 million, and the adjustment for net finance income and expense on loans deducted another ILS 11.2 million. Against that, bond finance expense added ILS 31.1 million back through the reconciliation, which means the company is already carrying a very real funding burden on its cash profile. After those adjustments and after working-capital movements, operating cash flow still ended the year at negative ILS 5.9 million.
That does not mean profit was fictional. It means profit quality was weaker than the headline suggests. For a leveraged real-estate name, that distinction matters. Appraisal gains and finance income can support equity and covenant optics, but they do not pay coupons and they do not redeem bond series without a clear path to cash.
The Cash on the Balance Sheet Exists, but Most of It Is Not Free
Another reason profit did not truly reach the cash box is the composition of year-end liquidity. The balance sheet shows ILS 43.2 million of cash and cash equivalents plus restricted cash, but only ILS 1.8 million of that total was free cash. Roughly 95.8% of the visible cash pool sat in restricted short-term cash.
The split inside that restricted balance shows how earmarked it really is. Series D accounted for about ILS 39.2 million held in trust until the required loan-to-collateral ratio is met, which ties directly to planning progress on the Rishon LeZion land. Series B still had about ILS 1.9 million in trust until a building permit is received for Tel Hashomer. Series C still had another ILS 0.2 million in the trust account. So the right way to read the year-end liquidity is not "the company has ILS 43 million in cash." It is "the company has ILS 1.8 million of free cash and ILS 41.4 million locked for specific purposes."
That is the key difference between accounting earnings and financing flexibility. Restricted cash can still be economically relevant, but it is not the same cushion that lets management absorb delays, pay interest, or close an unexpected liquidity gap.
Finance Income Looks Like Profit, but It Sits on Insider Credit
The second line item that needs to be unpacked is finance income. Out of ILS 11.8 million of finance income in 2025, ILS 9.249 million came from controlling shareholders and another ILS 48 thousand came from related parties. In other words, nearly 79% of the line came from internal credit relationships, not from third-party cash economics.
The balance sheet makes that dependence even clearer. Financial assets carried at amortized cost totaled ILS 138.4 million at year-end, and ILS 91.5 million of that amount sat against controlling shareholders. That means about two-thirds of the company's financial-asset base was effectively credit exposure to insiders.
The repayment schedule shows why that matters for earnings quality. Only ILS 9.4 million is scheduled inside the first year. Another ILS 55.9 million sits in year two and ILS 26.3 million in year three. The company is therefore recording finance income today on balances that, in large part, are only meant to come back as cash later.
It is important to keep the nuance. This is not pure paper income. In 2025 the company did collect ILS 14.6 million of loan repayments from controlling shareholders. So some of the accounting profit did meet cash. But that collection did not leave behind a cleaner cash position, because in the same year the company spent ILS 16.0 million on investment property additions, paid ILS 12.6 million of bond principal, ILS 18.5 million of bond interest, ILS 19.4 million of repayments to controlling shareholders, and ILS 6.9 million of repayments to related parties. The cash came in, but it did not stay.
There is also a related-party expense layer around the edges. In 2025 the company booked ILS 2.216 million of legal expenses to a law firm owned by a controlling shareholder, ILS 446 thousand of property operating expenses through the related management company, ILS 430 thousand of salary expense for the controlling-shareholder CEO, and ILS 322 thousand of management fees for the chairman. None of those items changes the thesis on its own, but together they are a reminder that part of the operating and financing wrapper still runs inside the controlling-shareholder circle.
Even After the Balance-Sheet Date, the Fix Was Still Financing
If the reader is looking for a sign that this gap closed immediately after December 31, 2025, the filings do not show it. In January 2026 the company completed a private expansion of Series B with ILS 10.3 million nominal value, for gross proceeds of about ILS 11.021 million. By March 2026, the board had already tied the full early redemption of Series A to a new Series E issuance, with at least ILS 84.343883 million nominal value required for the redemption to go ahead on April 14, 2026.
The structure of that planned issuance tells the same story. For Series E, the company intended to pledge the full ownership rights in the Idelson and Nahmani assets, and it stated that it did not intend to obtain a rating for the new series. So the immediate liquidity response after year-end was not a step-up in internally generated cash. It was another layer of debt, another use of existing collateral, and another refinancing move.
There is a softening point, and it matters. The shareholder credit line approved up to ILS 15 million was fully unused at the end of 2025. That means the company was not standing with an empty cash box and no backstop. But that point still reinforces the same conclusion: the safety buffer remained financing-based and owner-supported, not cash-generative in the cleaner sense.
Bottom Line
The core point is simple: 2025 profit did not reach the cash box at the same speed at which it was recorded. A large share of it came from appraisal gains, another meaningful share came from finance income on balances due from controlling shareholders, and the free cash left at year-end stayed low.
That does not mean the company lacks assets, collateral, or access to funding. It does not. It also does not mean the receivables from controlling shareholders are never collected. They were collected in part, and the cash-flow statement proves it. But if the question is how much of 2025 profit really reached cash that can be used without conditions, collateral locks, or another refinancing step, the short answer is: not much. ILS 1.8 million of free cash against ILS 7.9 million of net profit says more about earnings quality here than the headline line ever could.
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