Wilifood International: How Much Profit Really Comes From Operations and How Much From the Securities Book
The main article already showed that Wilifood’s operating business improved in 2025. This follow-up shows why the bottom line only reads correctly after separating operating earnings from securities-book revaluation and from the cash sources that also supported distributions.
The main article already established that Wilifood’s operating business improved in 2025. This follow-up isolates the one question that the headline profit obscures: how much of the year’s earnings came from importing and distributing food, how much came from the securities book, and what that means for payout capacity.
This is not a technical distinction. In 2025 operating profit rose to NIS 74.4 million, but net finance added another NIS 42.2 million. When the finance line equals about 57% of operating profit and about 36% of profit before tax, the net-income line cannot be read as if it were purely an operating result.
Four points frame the picture:
- The core business really did improve, but it does not explain NIS 90.4 million of net income on its own.
- The finance line was far too large to treat as noise, at NIS 42.2 million net, of which roughly NIS 33.0 million came from fair-value changes and revaluation.
- The securities book is not just passive excess cash, but a major asset pool of its own: NIS 173.7 million of financial assets at fair value through profit or loss, including NIS 124.6 million in Level 1 and NIS 49.1 million in Level 3.
- Payout capacity also leaned on that book, because on an all-in cash-flexibility view, operating cash flow did not fully cover capex, lease-principal payments and dividends, and the gap was almost closed through net securities sales.
Operating profit is not the whole story
The annual bridge is unusually clear. The business itself generated NIS 74.4 million of operating profit, but net finance lifted profit before tax to NIS 116.6 million, leaving NIS 90.4 million of net income. Put differently, more than a third of profit before tax came from finance rather than from operations.
That does not make the operating business irrelevant. Sales reached NIS 610.6 million, gross profit reached NIS 174.8 million, and operating profit improved versus the prior year. But it does mean that Wilifood’s 2025 bottom line was built by two different engines: a food-distribution business that improved, and a financial portfolio that added a very meaningful earnings layer on top of it.
That distinction matters because a reader looking only at net income could easily assume that the bottom line simply tracked the operating trend. It did not. Operating profit is the business foundation, but it is not the full read of 2025.
The finance line is too large to dismiss as noise
Note 9 breaks the finance line down almost all the way to the molecule level. Finance income reached NIS 44.8 million and finance expenses NIS 2.6 million, leaving NIS 42.2 million of net finance. But the composition of that line is the core of the thesis.
| Finance-line component | 2025 | Why it matters |
|---|---|---|
| Fair-value changes in financial assets | NIS 31.9 million | The largest component, tied to markets rather than food operations |
| Revaluation of a long-term financial asset | NIS 1.1 million | Also accounting profit, not operating profit |
| Interest from deposits, dividends, debenture interest and other interest | NIS 11.7 million | More recurring financially, but still not profit from the food business |
| Finance expenses | NIS 2.6 million | Fees, portfolio management, FX and other items |
| Net finance line | NIS 42.2 million | A very material share of total annual earnings |
In plain terms, about 78% of the 2025 net finance line came from fair-value changes and revaluation rather than from current yield on cash. That is not a semantic issue. It is the difference between profit created by the operating food-distribution platform and profit created by exposure to capital markets.
The quarterly bridge in the investor presentation makes the same point with even less room for interpretation. In Q2 the finance line stood at NIS 20.0 million, almost identical to operating profit of NIS 20.6 million. In Q4 it still stood at NIS 10.3 million against operating profit of NIS 15.6 million. That is no longer a minor tailwind. It is a layer that can change the character of an entire quarter.
Q4 is also a warning label on how the market should read the company. Gross profit rose 11.0% year over year, yet the finance line fell 29.7%, operating profit fell 3.0%, and net income fell 17.8%. So even when the core business does not break, the finance line can still dictate the direction of the headline result.
Note 3 shows that this is not just a passive treasury book
This is where Note 3 sharpens the story. At year-end 2025 financial assets at fair value through profit or loss stood at NIS 173.7 million, compared with NIS 171.0 million a year earlier. That closing number looks calm enough, but it sits on top of a portfolio that is larger than the company’s cash balance of NIS 124.2 million.
| Item from Note 3 | 2025 | Why it matters |
|---|---|---|
| Financial assets at fair value through profit or loss | NIS 173.7 million | A major financial book, larger than cash |
| Level 1 | NIS 124.6 million | Direct exposure to quoted market assets |
| Level 3 | NIS 49.1 million | About 28% of the book is not based on quoted market prices |
| 10% move in the securities portfolio | NIS 9.9 million | Large enough to move quarterly profit on its own |
The implications are twofold. First, not all of the book sits in plain-vanilla quoted securities. Almost a third of it is classified as Level 3, and the company explicitly says the non-tradable participation units are measured using the asset value method. Second, the company itself quantifies the market sensitivity: a 10% move in the securities portfolio would move profit and equity by about NIS 9.9 million. That is roughly half of Q4 net income.
There is another layer here as well. In Level 1 alone, 2025 included purchases of NIS 45.3 million, disposals of NIS 76.1 million and gains of NIS 32.2 million. In other words, this book did not just sit on the balance sheet and fluctuate on paper. It generated earnings, served as a liquidity source, and still ended the year at roughly the same size. That is exactly where profit quality and payout capacity meet.
It is also important not to oversimplify in the opposite direction. This is not “fake” profit. Part of the finance line comes from deposit interest, dividends and interest on debentures held for trading, and the company does hold real liquidity. But anyone trying to judge earnings quality has to separate yield on excess liquidity from profit created by the food business itself.
What this means for payout capacity
This is the right place to use an all-in cash flexibility frame. The company does not disclose a maintenance-capex number, and the dividend was already paid in cash during the year. So the right question is not what might theoretically have been distributable, but how much cash was actually left after the year’s real uses.
The math is straightforward. Operating cash flow was NIS 58.8 million. Against that stood NIS 34.0 million of investment in property, plant and equipment and construction, NIS 1.9 million of lease-principal payments and NIS 49.9 million of dividend distribution. Before bringing securities sales into the picture, that leaves a gap of about NIS 27.0 million.
That gap was almost closed through NIS 29.8 million of net securities sales. This is why 2025 payout capacity cannot be read correctly from net income alone, or even from operating cash flow alone. In practice, the operating business contributed, but the financial book also acted as a liquidity reservoir that funded part of the year’s cash uses.
The presentation adds two more layers to that logic. The first is a payout policy of at least 40% of net income. The second is cumulative distributions of NIS 237 million to shareholders since 2021. That does not contradict the critical read. It reinforces it. It means the financial portfolio is not decorative. It is part of the company’s liquidity architecture and part of how it preserves dividend capacity.
That is also why the right conclusion is not simply “low-quality earnings.” The more accurate read is narrower and sharper: Wilifood now has a more profitable food business than before, but above it sits a large, market-linked and partly Level 3 financial portfolio that affects both reported profit and real distribution room. Anyone assuming that the dividend is funded entirely by operations is missing the other half of the story.
The bottom line
At Wilifood in 2025, net income is not one engine. It is the sum of two. The first is the import-and-distribution business, which did improve. The second is the securities portfolio, which added NIS 42.2 million through the net finance line, including roughly NIS 33.0 million from fair-value changes and revaluation.
That matters not only for earnings analysis, but also for payout analysis. On a full cash view, operations alone did not cover capex, lease principal and the 2025 dividend. The financial book nearly closed that gap through net securities sales. So the right read is not that Wilifood’s profit is artificial. It is that the profit has to be split: how much comes from the business, and how much comes from the company’s capital-allocation decision.
As long as the financial book remains large, partly Level 3, and sensitive enough to move almost half a quarter’s net income on a 10% market move, both the earnings read and the dividend read will remain tied not only to import margins and sales, but also to capital-market conditions.
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