Rapac's MRC Stake: EBITDA Is Stable, But How Much Actually Reaches the Parent
MRC ended 2025 with NIS 286.9 million of EBITDA and NIS 229 million of operating cash flow, but Rapac only recognized NIS 8.3 million in equity-method profit and NIS 15 million of dividends received. That gap reflects ownership, derivative noise and the fact that 100%-basis plant economics are not the same thing as parent-accessible cash.
What This Follow-Up Is Isolating
The parent piece argued that Rapac already owns a real energy asset that works, but that the path from asset value to parent cash is still not clean. This follow-up isolates MRC because this is where the gap is easiest to see: a power asset can show stable EBITDA and meaningful operating cash flow, yet still leave the parent with a much smaller contribution in both earnings and cash.
Three layers drive the result. First, MRC itself remained a strong operating asset in 2025. Second, the bridge from that operating layer to net profit ran through a very heavy financing line, especially an embedded euro derivative and economic hedging derivatives. Third, even after stripping that noise out conceptually, Rapac only holds 16.67% of the asset, so it cannot be read as if MRC's full EBITDA were parent cash.
The easy mistake is to stop at MRC's NIS 286.9 million of EBITDA and almost instinctively assign that number to Rapac. That is the mistake. At Rapac level, the read has to pass through ownership share, MRC's financing line, actual dividend decisions, and the credit-agreement constraints that sit at the plant level. Only after those filters does it make sense to ask how much really reached the parent.
What MRC Produces At 100%, And What Is Left For Rapac
MRC ended 2025 with NIS 695.3 million of revenue, NIS 286.9 million of EBITDA and NIS 229 million of cash flow from operating activities. In 2024, EBITDA was NIS 283.1 million, so the broad operating picture stayed relatively stable. Even the fourth quarter on its own was stronger, with MRC's EBITDA rising to NIS 97.8 million from NIS 76.5 million in the comparable quarter.
But Rapac is not the controlling owner of MRC. It holds 16.67% of the rights, through a dedicated SPV that is owned equally by Rapac and Powergen and that holds one-third of MRC. So on a simple economic-share basis, NIS 286.9 million of EBITDA translates into roughly NIS 47.8 million for Rapac, and NIS 229 million of operating cash flow translates into roughly NIS 38.2 million. These are only mechanical calculations, but they matter because the shareholder-relevant starting point is 16.67%, not 100%.
From there, the numbers get much smaller. Rapac recognized only NIS 8.3 million as its share of MRC's profit in 2025, versus NIS 17.8 million in 2024. At the same time, the dividend Rapac actually received from MRC was NIS 15 million in 2025, exactly the same as in 2024. Put differently, even with stable asset-level EBITDA, Rapac did not get a clean upward line in either reported profit or parent cash.
Where Derivatives Break The Path From Operating Profit To The Bottom Line
The core story in 2025 is not that the plant stopped working. The core story is that MRC's financing line is both heavy and noisy. MRC moved from NIS 286.9 million of EBITDA to NIS 169 million of operating profit, but from there it fell to only NIS 65.3 million of profit before tax because net financing expense reached NIS 103.7 million.
Out of that amount, NIS 47.8 million came from revaluation of the embedded derivative and NIS 31.2 million from revaluation of economic hedging derivatives. Interest expense on loans added another NIS 42.3 million. Rapac's own annual report makes the point even sharper: in MRC's 100%-basis accounts, the euro embedded derivative cut 2025 results by about NIS 36.8 million after tax, while the same component contributed about NIS 62.2 million of income in 2024. So a large part of the gap between stable EBITDA and weak net profit is not operational at all.
The source of the noise is also clear. MRC separated a euro embedded derivative from its agreement with Noga and measures it at fair value through profit or loss. Alongside that, it holds economic hedging derivatives for foreign-currency exposures. At year-end 2025, MRC carried derivative liabilities of NIS 106.9 million for the embedded derivative and NIS 2.9 million for the economic hedges. KPMG flagged derivative fair value as a key audit matter precisely because the valuation depends on forward prices and discount rates.
The implication for Rapac shareholders is straightforward: Rapac's share of MRC profit is not a clean snapshot of plant performance. It is a number that passes through financing structure and fair-value accounting. The noise also remains live after year-end, since a 5% move in the euro would have shifted MRC's profit or loss and equity by about NIS 10 million after tax.
Why MRC Cash Flow Does Not Automatically Equal Cash At Rapac
NIS 229 million of operating cash flow is strong, and it should be read as strong. But it is not the same thing as the all-in cash that is truly available to owners. In 2025, MRC spent NIS 273.8 million on investment, paid NIS 80 million of interest, repaid NIS 225.5 million of bank principal and paid NIS 126.5 million of dividends, while also drawing NIS 477 million of new bank loans. So even at MRC level, operating cash flow is not a simple proxy for free owner cash.
Once the read moves one floor up, the gap becomes even sharper. MRC itself showed NIS 126.5 million of dividend payments in 2025, and during December 2025 it also declared a NIS 96.5 million dividend out of 2024 and 2025 profits. But in Rapac's own statements, the dividend actually received from MRC during 2025 was only NIS 15 million. That is not an accounting contradiction. It is the combination of partial ownership, receipt timing, and the simple fact that a distribution at the plant level does not necessarily land in the parent's cash line at the same time and in the same amount.
There is one more filter that matters. MRC's credit agreements include dividend-distribution restrictions and 1.05 coverage-ratio tests. MRC met those tests at the end of 2025, but the existence of those restrictions means Rapac's access to cash from the asset is also constrained by covenant architecture at the plant level, not just by the quality of the underlying operation.
In other words, MRC is an asset that creates value, but not every shekel of value becomes a shekel of accessible cash at Rapac in the same period. Anyone who jumps from NIS 286.9 million of EBITDA straight to a parent-cash conclusion is skipping three critical stations: partial ownership, a derivative-heavy financing line, and distribution access limits.
Bottom Line
This is the heart of it. MRC is one of Rapac's strongest economic assets, but the path from MRC up to Rapac runs through three clear filters: 16.67% ownership, a heavy financing line with derivatives, and a distribution pace that is shaped by both timing and covenants.
So the right 2025 reading is not that MRC stopped working. Quite the opposite, EBITDA stayed stable. The right reading is that the distance between plant economics and what actually reached Rapac remained wide. After all the filters, 2025 translated at Rapac level into NIS 8.3 million in earnings and NIS 15 million of dividends received.
It is still an important asset. It is just important for the right reason: it should be measured not by MRC's 100%-basis EBITDA, but by what remains after ownership, derivatives and real access to cash.
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