Inter Industries Follow-Up: How Much Of Konstantin Actually Belongs To Shareholders

Why Konstantin Needs To Be Isolated

The main article established that services are now what holds Inter together, while projects still consume too much margin and cash. This follow-up isolates one layer only: how much of the value created around Konstantin actually remains with the listed shareholders, and how much still sits with minorities, on the balance sheet, or inside a future payment obligation.

That matters because it is very easy to look at Inter's service engine and assume all of it belongs to shareholders automatically. The report itself shows a more complicated picture. The trade and services segment delivered NIS 331.4 million of revenue and NIS 18.2 million of operating profit in 2025, while service and maintenance alone already account for 46% of group revenue and about 70% of service-and-maintenance contracts are multi-year recurring arrangements. But the same report also says that this activity is carried out mainly through Konstantin, that Inter owns only 70% of it, and that a CALL/PUT option over the remaining 30% has already turned into a NIS 21.785 million financial liability.

So there are three very different layers here, and mixing them leads to the wrong conclusion. One layer is segment economics, which clearly improved. The second is Konstantin's own economics on a 100% basis. The third, and this is the shareholder layer, is what remains after the 30% minority interest, after the purchase liability, and after the harder question of how much cash has actually moved upstream.

Where The Segment Ends And The Shareholder Begins

The first number that draws attention is NIS 18.171 million, the operating profit of the trade and services segment. It matters, but it is not shareholder economics. First, the segment contains more than Konstantin alone. Second, even within Konstantin itself, Inter owns only 70%. Anyone who takes the segment profit as if it all belongs to listed shareholders skips two important filters.

In the table for material subsidiaries, Konstantin posted profit of NIS 15.742 million before tax and NIS 11.760 million after tax in 2025. That is already much closer to the asset itself. But even here, not all NIS 11.760 million belongs to Inter's shareholders. Based on the current ownership level, their economic share is only about NIS 8.232 million, equal to 70% of net profit. The remaining roughly NIS 3.528 million belongs to the holders of the other 30%.

The report adds an even more important data point: up to the reporting date, Konstantin paid NIS 4.2 million of dividends. That is no longer 100% accounting profit inside the subsidiary. It is cash that actually moved up the chain. Once that number is placed next to NIS 11.760 million of net profit and a balance-sheet liability of NIS 21.785 million, the gap between value created inside the subsidiary and value already accessible to listed shareholders becomes very clear.

What matters here is not merely that services have become the earnings anchor. That was already established in the main article. What matters here is that the move from segment profit to shareholder value involves a sharp narrowing. Even if Konstantin is indeed the heart of the service story, Inter's shareholders do not currently own 100% of it, and the path to 100% already comes with an accounting and financing price tag.

The CALL/PUT Already Sits On The Balance Sheet

This is the point that separates a neat story about recurring services from a more serious accounting read. The report does not present the remaining 30% of Konstantin as a distant theoretical option. It explicitly states that the company and the sellers hold a CALL/PUT option for the purchase or sale of the remaining shares, and at the same time it already records a financial liability for the purchase of subsidiaries of NIS 21.785 million, up from NIS 20.171 million a year earlier.

The point becomes sharper in the liquidity table. There, this obligation does not appear at its carrying value but on a contractual undiscounted basis, and by the end of 2025 the amount already stands at NIS 25.909 million, entirely due within one to two years. So anyone looking only at the NIS 21.8 million balance-sheet number is already looking at a discounted present value, not the full future payment.

This is also where the financing layer starts to matter. In the cash flow statement and in the financing-expense note, the company recorded NIS 1.614 million of financing expense in 2025 related to the liability for the purchase of subsidiaries. That is not a cost created by weak operating performance at Konstantin itself. It is the accounting cost of carrying the obligation to buy the rest.

The report also discloses the interest-rate sensitivity, and this is a particularly useful detail: a 1% increase in interest rates would have reduced annual financing expense by about NIS 0.5 million, because the liability is presented at the present value of the exercise price. In other words, part of the financing expense around Konstantin is not driven by service demand, customer quality, or gross margin. It is driven by the discount rate. So even when the asset performs well, the ownership layer can still move because of a financial parameter.

That is the heart of this continuation. Konstantin does not only generate recurring service revenue. It also generates an ongoing shareholder-level obligation that already costs money today. The right question is therefore not merely whether services are profitable, but whether the operating surplus created inside Konstantin is large enough to cover the cost of the missing ownership stake.

The Impairment Test Supports Value, Not Accessibility

It is important not to swing too far the other way. The fact that there is a liability on the remaining stake does not mean Konstantin is a weak asset. On the contrary, the goodwill impairment test presents a fairly solid operating picture. Out of total goodwill of NIS 25.529 million, NIS 23.737 million is allocated to the cash-generating unit acquired in 2021. The recoverable amount of that unit was estimated at about NIS 86 million versus a net carrying amount of about NIS 58.9 million, so no impairment was required.

The assumptions are not especially soft either. The valuation was based on value in use, with a pre-tax discount rate of 17.7%, a 2026 budget as the base year, forecast years through 2030, and no further growth after that. The representative gross margin was set at 9.2%. These are not assumptions that erase risk, but they do say something simple: at the full asset level, Konstantin is still treated as a unit worth more than its book value.

But this is exactly where it becomes important not to confuse four different types of value. The first is operating value, which looks reasonably healthy. The second is accounting value, also supported by the absence of impairment. The third is Inter's value inside Konstantin, which is already only 70%. The fourth, and this is the one that actually matters to listed shareholders, is what remains after taking into account both the purchase obligation and the pace at which cash actually moves from the subsidiary to the parent. Those are two very different tests.

That is why the impairment test, important as it is, does not answer the question in the headline by itself. It helps say there is a valuable asset. It does not say all of that value already belongs to ordinary shareholders, and it does not say that this value is accessible without paying another NIS 21.785 million on the balance sheet, or NIS 25.909 million on a contractual cash-flow basis.

Bottom Line

Konstantin is probably the main reason Inter's service layer now looks like a real engine rather than a supporting activity. It is an asset with a broad service book, exposure to multi-year contracts, and NIS 11.760 million of net profit in 2025. But Inter's shareholders do not currently own NIS 11.760 million, and they certainly do not own the full NIS 18.171 million of trade-and-services segment profit. What is closer to their layer is about NIS 8.232 million, equal to 70% of net profit, and even that sits next to a NIS 21.785 million balance-sheet obligation on the path to full ownership.

That is the difference between a good asset and accessible value. Konstantin looks like a good asset. The value accessible to shareholders is still narrower, slower, and more expensive than the segment numbers alone imply. So if services are the positive part of Inter's story, ownership of Konstantin is where investors need to test how much of that story actually remains with listed shareholders.