Cohen Development: How much of the profit is actually accessible to shareholders?
The main article already showed that Cohen Development's 2025 profit jump came mostly through Avner and a private placement, not through a surge in direct royalties. This follow-up maps what already sat in accessible cash, what remained in equity income or a property cushion, and why the year-end cash pile was not built mainly from inside.
The main article already established that Cohen Development's 2025 profit looked stronger than the direct business itself. This follow-up isolates the next question: how much of that profit was actually accessible to shareholders, and how much remained in layers of equity income, property value, or fresh capital.
To avoid mixing frames, the lens needs to be defined upfront. This article uses an all-in cash-flexibility lens at the listed-company layer. The question is not how much economic value exists inside Leviathan, NewMed, or the Petah Tikva property. The question is how much cash actually reached the layer from which dividends can in principle be paid without leaning again on a capital raise.
The number that should open the discussion is not $31.7 million of net profit, but the gap between that figure and the cash sources that actually moved up. In 2025, cash from operations was $19.0 million, the dividend received from Avner was only $1.155 million, and the dividend paid by Cohen Development to its own shareholders was $21.488 million. At the same time, the cash balance jumped to $35.1 million only after a private placement that brought in a net $31.036 million.
This chart sharpens the core point immediately. The two biggest numbers of the year were net profit and the private placement. Only one of them was cash already sitting in the company. The other large contributor, Avner, was mostly an accounting value layer.
The first cash layer: direct royalties are still real, but they are not the whole story
Cohen Development did not lose its direct cash engine. In 2025 the company recognized $27.674 million of overriding royalty income, and the directors' report says the company actually received $28.636 million of royalty cash during the year. This is still a genuine cash layer. But this is exactly where gross inflow and shareholder-accessible cash begin to diverge.
First, operating cash flow was only $19.032 million. So even before Avner, before the property, and before the private placement, the cash that had already passed through taxes, levy, working-capital movement, and other adjustments was about $8.6 million below the gross royalty cash inflow.
Second, part of the inflow still remained subject to adjustment. At year-end 2025, the company carried a $4.446 million payable in respect of overriding royalties, including $2.926 million related to Leviathan and $1.520 million related to Tamar. According to note 14, this reflects the gap between royalties already received and the income recognized after effective-royalty-rate and price adjustments. So even at the direct-business layer, not every dollar received had already become final shareholder cash.
The implication is straightforward: direct royalties are Cohen Development's highest-quality cash layer, but they are still not the same thing as distributable cash. They first pass through taxes, levy, wellhead adjustments, and working-capital timing.
This is where the real test appears. In 2023, the recurring layer of operating cash flow plus Avner dividends covered the shareholder payout. In 2024 and 2025 it no longer did. Across 2023 through 2025, Cohen Development generated $56.1 million of operating cash flow and another $3.68 million of dividends from Avner, together $59.8 million. Over the same period it paid $61.5 million of dividends. The gap is not dramatic, but it is large enough to explain why a sharp rise in the cash balance cannot be read as if it were built entirely from inside the business.
The second value layer: Avner contributed profit, but barely contributed cash
This is where the biggest gap between attractive earnings and accessible cash sits. The investment in Avner rose to $24.649 million at the end of 2025 from $13.328 million a year earlier. The condensed financial information in note 6 explains why: Avner recorded $31.724 million of net finance income and $24.952 million of net profit in 2025, so Cohen Development's share of Avner profit reached $12.476 million.
But note 6 also adds the more important line for this follow-up. During 2025, Avner distributed only $2.3 million of dividends, of which Cohen Development received $1.155 million. In other words, out of the $12.476 million that entered Cohen Development's income statement through Avner, only $1.155 million actually moved up as cash. The remaining $11.321 million stayed on paper.
That is not an argument that the value is unreal. On the contrary, Avner created real value through its NewMed holdings. But for Cohen Development shareholders it matters enormously whether that value arrived as distributable cash, or as equity income that simply enlarged the investment line on the balance sheet.
This chart may be the most direct answer to the title question. In 2025, Avner was a much stronger earnings engine than cash engine. So anyone reading Cohen Development through the profit line alone will overestimate how much of that value was already accessible at the listed-company layer.
The placement and the property: real cushion, but not a substitute for internally generated cash
If Avner explains why profit rose, the private placement explains why the cash balance rose. Note 13 shows that in December 2025 Cohen Development issued 540,600 ordinary shares for about NIS 100 million, equal to net proceeds of $31.036 million after issuance expenses, and also granted 270,300 warrants for no consideration. The issued shares represented about 7.59% of the company's issued capital after the allocation, and about 10.97% on a fully diluted basis assuming exercise of the warrants.
This is the point that should not be blurred. The most liquid layer added in 2025 did not come from the fields and did not come from Avner. It came from fresh equity capital. That is real cash, but it came with dilution, which means it does not prove that 2025 profit itself had already become accessible.
The Petah Tikva property is also a real cushion, but not one that funds the current payout. Note 8 shows the property is carried at only $5.330 million, while its fair value is estimated at $10.502 million. There is a hidden value cushion of about $5.172 million here. But that fair value is a Level 3 estimate based on a comparison approach combined with a cost approach. It is important balance-sheet support, not cash that already entered the company in 2025.
| Layer | 2025 figure | What it means for shareholders |
|---|---|---|
| Operating cash flow | $19.032 million | This is the cash the direct business generated after taxes, levy, and adjustments |
| Share of Avner profit | $12.476 million | An accounting value layer, not cash already available for distribution |
| Dividend received from Avner | $1.155 million | This is the cash that actually moved up from Avner to the company |
| Net private placement proceeds | $31.036 million | The main cash source of the year, but external and dilutive |
| Investment property | $5.330 million carrying value versus $10.502 million fair value | A value cushion, not a recurring cash engine |
This table puts the map in the right order. There are four very different value languages here: cash generated by the business, equity income, fresh capital, and balance-sheet cushion. Only two of them are actual cash inflows, and only one of them was born inside the direct business.
So how much of the profit is actually accessible
The sharp answer is: not much of it. Not because the profit is "fake," but because the value layers are very different from one another.
The layer closest to shareholder-accessible cash is operating cash flow. In 2025 it stood at $19.032 million. The second layer, the Avner dividend, added only $1.155 million. Together they brought the company almost exactly to the annual dividend level, but not beyond it. So even without talking about growth, CAPEX, or debt, it is difficult to argue that Cohen Development already proved it can comfortably fund the 2025 payout entirely from recurring internal layers.
By contrast, $12.476 million of net profit came from equity income in Avner, and another roughly $5.2 million sits in the gap between fair value and carrying value of the property. These are important value layers. They are simply not the same as cash already sitting at December 31, 2025 in the account from which cash can be distributed without another step.
That is also the correct way to read the year-end cash balance. $35.146 million of cash does improve the company's flexibility materially, but it does not prove that 2025 profit had already become shareholder-accessible. A large part of the new flexibility arrived through capital markets, not through full profit-to-cash conversion.
Conclusion
Cohen Development in 2025 created value, but not all of it reached the shareholder layer at the same speed. Direct royalties remained a real cash engine, Avner improved the bottom line sharply, the property offers a valuation cushion, and the placement supplied immediate liquidity. The problem is that these are four different forms of value.
Anyone looking for the cash that was already accessible to shareholders should focus mainly on two numbers: $19.032 million of operating cash flow and $1.155 million of dividends from Avner. Anyone looking only at $31.714 million of net profit without making that distinction is assigning too much weight to value layers that have not yet become free cash.
That is also what will need to change from here. For profit to become more accessible, Cohen Development will have to show one of three things: that direct royalties generate a meaningfully larger cash surplus than the current payout pace, that Avner starts sending more actual cash upstream rather than mostly equity profit, or that the side cushion, such as the property, moves from balance-sheet value into monetization. Until then, a meaningful part of 2025 profit remains more a proof of value than a proof of accessibility.
Disclosure: Deep TASE analyses are general informational, research, and commentary content only. They do not constitute investment advice, investment marketing, a recommendation, or an offer to buy, sell, or hold any security, and are not tailored to any reader's personal circumstances.
The author, site owner, or related parties may hold, buy, sell, or otherwise trade securities or financial instruments related to the companies discussed, before or after publication, without prior notice and without any obligation to update the analysis. Publication of an analysis should not be read as a statement that any position does or does not exist.
The analysis may contain errors, omissions, or information that changes after publication. Readers should review official filings and primary sources before making decisions.