Yesodot Eitanim: Why much of the value sits above the consolidated report
The main article showed that the consolidated report is smaller than the business behind it. This continuation explains why that still does not translate automatically into shareholder-accessible value: at the end of 2025 the company had ILS 52.8 million tied to equity-accounted holdings, but ILS 30.9 million of that sat as loans, only ILS 0.423 million came back as dividends, and the heavier interest-rate sensitivity sat inside the held entities.
Why This Follow-up Matters
The main article argued that Yesodot Eitanim’s consolidated report is smaller than the business behind it. That was the right first conclusion, but it leaves a second question open: if the business footprint is broader than the consolidated accounts suggest, why is so little of that value immediately accessible to shareholders of the listed company.
The first number that draws attention is ILS 52.811 million. That is the year-end balance of investments and loans to equity-accounted holdings. On a superficial read it looks like a large pool of off-consolidated value. That is exactly where the read can go wrong. Of that balance, only ILS 21.864 million is investment in shares, while ILS 30.947 million is loans to held entities.
The 2025 movement tells the same story. During the year this layer absorbed another ILS 6.332 million of loans and investments, recorded ILS 3.035 million of the company’s share of losses, and returned only ILS 0.423 million as dividends. In other words, by the end of 2025 the layer above the consolidated report was still asking for more capital and financing far more than it was sending cash back up the chain.
That chart is the core of this continuation. It does not show a clean asset pool rising in a straight line. It shows an accounting layer moving through loans, partners, losses, and modest dividends. In a small real-estate holdco structure, that is the difference between economic value and value that can actually reach listed shareholders.
That split matters. Once more than half of the balance sits as loans to held entities, the read has to change. The issue is no longer only asset value. It becomes a question of who is financing the path to that value, at which layer the cash is generated, and when, if ever, it actually travels back to the listed company.
Three Layers That Explain Why the Value Sits Further Away
| Layer | Carrying value at end 2025 | What sits underneath it | Why it is not the same as accessible cash |
|---|---|---|---|
| Groupit | ILS 16.074 million | The company owns 33.33% of Groupit, which at end 2025 had ILS 55.019 million of equity attributable to its shareholders and another ILS 16.092 million attributable to non-controlling interests | There is already a minority layer here before anything even reaches the listed parent |
| Yesodot Tal Migdal HaEmek | ILS 13.808 million | A 50% partnership with ILS 44.534 million of equity, ILS 193.297 million of current liabilities, and ILS 4.774 million of net finance expense in 2025 | Value sits under liabilities, a partner layer, and financing cost before it can become surplus cash |
| Tal Megiddo Income-Producing and Residential Assets | ILS 4.607 million | A jointly controlled partnership that itself holds 74% in another partnership owning the commercial center | Another partner layer sits between the property value and the listed company |
This table is not the full holdings map of the group. It isolates three layers that explain the thesis of this follow-up. The value does not disappear. It simply sits inside a structure where each stop along the way takes part of the economics first: a partner, a minority holder, a shareholder loan, bank financing, or a distribution restriction.
Groupit: Park Kinneret Belongs First to the Structure, and Only Then to the Market
Groupit is probably the clearest example of the gap between economic value and accessible value. Yesodot Eitanim’s carrying value in Groupit stood at ILS 16.074 million at the end of 2025. Inside Groupit itself there were ILS 116.768 million of non-current assets, mainly investment property, ILS 20.522 million of current liabilities, ILS 25.638 million of non-current liabilities, ILS 55.019 million of equity attributable to Groupit’s shareholders, and ILS 16.092 million attributable to non-controlling interests.
That last figure is the key. Even before Yesodot Eitanim’s shareholders get their share, there is already a minority layer inside Groupit. So the simple read of “there is an asset, therefore there is value” misses an entire translation step. The value has to pass first through the rights of others inside Groupit, and only then through Yesodot Eitanim’s one-third holding in Groupit.
Groupit’s 2025 earnings do not change that read. Groupit ended the year with net profit of ILS 0.381 million, of which ILS 0.449 million was attributable to Groupit’s shareholders, and Yesodot Eitanim’s share stood at ILS 0.149 million. The dividend received by Yesodot Eitanim from Groupit was zero. That is a very practical checkpoint. You can have profit, you can have real-estate assets, and you can still finish the year with no cash moving up.
That is where Park Kinneret comes in. Groupit owns 74% of Park Kinneret, the entity responsible for building, leasing, and managing commercial structures on the Ashdot Yaakov land. The structure includes prepaid lease rights through 2028 on one lot, through 2044 on a second lot, and development-rights exposure on a third lot. Under the shareholder arrangement at Park Kinneret, development work, construction, and financing are carried by Groupit, while project marketing is carried out through a corporation controlled by Ofer Zaraf.
That matters because Park Kinneret is not simply a passive asset waiting for monetization. It is a platform with development, financing, marketing, and partners built into it. The fair value of the land in Park Kinneret’s books stood at ILS 112.3 million at the end of 2025, up from ILS 110.8 million at the end of 2024. The unleased land component, roughly 100 dunams, was measured at ILS 1.0 million to ILS 1.1 million per dunam, while the leased gas-station and related commercial component was measured using future cash-flow projections and a principal discount rate of 7.5%.
Those numbers explain why it is easy to get excited about the asset, but also why it is wrong to jump straight from appraisal value to listed-shareholder value. Between ILS 112.3 million of fair value and Yesodot Eitanim’s common shareholders sit at least three filters: Groupit owns only 74% of Park Kinneret, Groupit itself has non-controlling interests inside it, and the listed parent owns only 33.33% of Groupit. That is not a technical footnote. It is the reason why a compelling property value does not automatically become accessible cash.
The financing clause brings the story back to earth. As of December 31, 2025, a financial-institution loan secured by a pledge over the Groupit shares stood at ILS 14.475 million. The loan matures on May 18, 2026, carries interest at prime plus a spread of 6% to 6.5%, and until repayment, any withdrawal of profits, dividends, or shareholder loans from Groupit to the company or the guarantors is first subordinated to payment of the lender. In addition, any transfer of rights in Groupit or Park Kinneret requires the lender’s prior written consent.
That is the heart of the issue. Even if Groupit holds an attractive asset and even if the valuation has improved, this layer is not an open dividend reservoir for Yesodot Eitanim’s shareholders. It is already pledged, financed, and contractually filtered on the way up.
Migdal HaEmek and the Commercial Center: Here Too, Partners Come Before the Stock Market
Migdal HaEmek illustrates the same principle from a different angle. Yesodot Eitanim’s carrying value in the Yesodot Tal Migdal HaEmek partnership stood at ILS 13.808 million at the end of 2025. Under that carrying figure sits a partnership with ILS 155.265 million of residential-project land, ILS 50.070 million of investment property under construction, ILS 32.352 million of other current assets, ILS 193.297 million of current liabilities, and only ILS 44.534 million of partnership equity.
The partnership income statement explains why this is not a quiet pool of distributable value. In 2025 it recorded ILS 42.373 million of revenue from construction work and sale of rights, against ILS 39.637 million of cost, an ILS 2.721 million net loss from revaluation of investment property under construction, ILS 2.385 million of operating expense, and ILS 4.774 million of net finance expense. The result was a loss of ILS 7.144 million attributable to the partners, and Yesodot Eitanim’s share of that loss was ILS 3.572 million before deferred taxes.
So here again, the carrying value in the listed-company balance sheet sits on a more complicated underlying economics: another partner, real liabilities, financing cost, and revaluation effects. A reader who stops at the ILS 13.808 million line may think of value. A reader who looks underneath sees a project engine that still has to pass through financing and execution before it speaks in the language of distributable surplus.
The Tal Megiddo Income-Producing and Residential Assets partnership tells a similar story through the investment-property layer. The company and Yoav Tal each hold 49.5% in the partnership, and the partnership itself holds 74% in another partnership that owns the commercial center and the gas station. The fair value of the commercial center fell to ILS 22.4 million at the end of 2025 from ILS 24.4 million at the end of 2024.
That does not mean the asset lost its reason to matter. It means the fair value never belonged wholly to the listed company in the first place. There is one partner at the first-layer partnership and another partner at the asset layer itself. So even if the commercial center creates value, the route from that value to Yesodot Eitanim’s shareholders still passes through more than one checkpoint.
The Interest-Rate Sensitivity Mostly Sits Outside the Consolidated Layer
The financial-instruments note adds another angle the market may underestimate. At the consolidated-company level, prime-based loans stood at about ILS 58 million at the report date. A 1% increase in rates is expected to add about ILS 0.6 million of annual finance expense at that debt level.
But the held entities carry a heavier layer. The held entities have about ILS 266 million of prime-based loans, and the company’s share in that exposure is about ILS 122 million. A 1% increase in rates is expected to add about ILS 2.7 million of annual finance expense in those entities, of which the company’s share is about ILS 1.2 million.
That chart is not meant to imply that every rate move flows one-for-one in the same period. It is meant to show where the weight sits. Anyone reading only the consolidated finance line misses a larger interest-rate layer inside the held entities, exactly where many readers tend to see only “hidden value.” In this case, the hidden value is also more leveraged than it first appears.
Conclusion
The main article was right that Yesodot Eitanim’s business is broader than the consolidated report. This follow-up adds the second half of the sentence: much of that value is also further away from shareholders than the surface read suggests.
At the end of 2025, the equity-accounted layer stood at ILS 52.811 million, but most of that balance sat as loans to held entities. During the year the same layer absorbed ILS 6.332 million of loans and investments and returned only ILS 0.423 million of dividends. Inside Groupit sit Park Kinneret, minority interests, an ILS 14.475 million loan secured by the Groupit shares, and clear upstreaming restrictions. Inside Migdal HaEmek and the commercial-center structure sit partners, liabilities, and financing costs that come before the public shareholders.
So the right question here is not whether value exists outside the consolidated report. It does. The real question is how much of that value can actually travel up the chain, when, and at what cost. As long as this layer remains more dependent on loans, partners, and financing than on real cash distributions, the gap between economic value and shareholder-accessible value will remain wide.
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