Neto Holdings: How Much of Melinda's Profit Really Reaches Neto Shareholders
This follow-up isolates the minority layer the main article compressed: Neto reported NIS 212.3 million of consolidated net profit in 2025, but only NIS 86.7 million was attributable to its shareholders. Most of the gap sits in Melinda, where minorities received both NIS 120.6 million of profit and NIS 65.7 million of dividends.
What The Main Article Already Established, And What Still Needs Isolating
The main article already pointed to the right reading of Neto: the consolidated number is only a starting point. This follow-up isolates the layer that can look technical but in practice determines how much of the group's profit really reaches the shareholders of the listed company, the minority layer inside Melinda.
That matters because Neto reported NIS 212.3 million of consolidated net profit in 2025. Yet only NIS 86.7 million of that amount was attributable to the owners of the parent, while NIS 125.6 million was attributable to non-controlling interests. More than half of the bottom line did not remain with Neto shareholders.
That is easy to miss on a quick read because the consolidated report still shows the full operating picture: NIS 5.22 billion of revenue, NIS 702.1 million of gross profit, and NIS 324.6 million of profit from ordinary operations after other income and expenses. But the holding structure shows that the path from those numbers to Neto shareholders runs first through Melinda, and that is where the large minority layer sits.
The Gap Opens Already At The Profit Line
The cleanest way to read 2025 is not through consolidated profit alone, but through the bridge between that number and the profit that actually belongs to Neto shareholders.
This is the core of the story. The gap between consolidated net profit and what remains for Neto shareholders is not the result of many small minority layers. It sits almost entirely in Melinda. In the minority-interest note, Melinda alone produced NIS 232.0 million of profit in 2025, of which NIS 120.6 million was attributable to minorities. That explains about 96% of all profit attributed to non-controlling interests in the group.
The issue is also not new. It is getting sharper. Neto shareholders' capture ratio out of consolidated net profit fell from 47.5% in 2023 to 42.5% in 2024 and then to 40.8% in 2025. At the same time, the minority share rose from 52.5% to 57.5% and then to 59.2%.
| Year | Consolidated net profit | Attributable to Neto shareholders | Attributable to minority interests | Neto shareholder capture ratio |
|---|---|---|---|---|
| 2023 | 90.5 | 43.0 | 47.5 | 47.5% |
| 2024 | 191.6 | 81.4 | 110.2 | 42.5% |
| 2025 | 212.3 | 86.7 | 125.6 | 40.8% |
The message is straightforward: consolidated profit improved strongly in 2024 and 2025, but the part that really remained with Neto shareholders rose much more slowly. In a holding company, that is not a footnote. It is the difference between a headline number and value that is actually captured at the listed-company layer.
Melinda Is The Main Minority Layer
The ownership structure explains why the gap is so large. At the end of 2025 Neto held 42.83% of Melinda's equity and 45.18% of the voting rights. At the end of 2024 those figures were 46.32% and 48.86%. During 2025 the company also sold about 3.49% of Melinda's issued capital and about 3.68% of the voting rights for about NIS 100 million, and recorded a pre-tax capital gain of about NIS 45 million directly to equity attributable to shareholders, about NIS 39 million after tax.
That point needs to be read carefully. On one side, Neto still consolidates Melinda even though it holds less than half of the voting rights, because it has the power to determine Melinda's financial and operating policy. On the other side, consolidation does not erase the fact that a large majority of Melinda's economics also belongs to other shareholders. Control explains the consolidation. It does not cancel the haircut for Neto shareholders.
The segment note reinforces that reading. In 2025 segment results totaled NIS 324.6 million. Of that amount, NIS 183.1 million came from import and NIS 111.6 million from the local market, together about 90.8% of segment results. The holding chart shows that the main operating companies sit under Melinda. So anyone reading the group's operating profitability as if it all belongs to Neto shareholders is skipping the most important ownership filter in the structure.
It Does Not Stay At The Accounting Line
Anyone trying to dismiss this as only an accounting issue gets a less comfortable answer from Melinda's minority-interest note. At the end of 2025 the non-controlling interest in Melinda had a book value of NIS 830.1 million, based on net assets of NIS 1.545 billion. That already shows how large the value layer is outside Neto shareholders.
But the more interesting line is cash movement. In 2025 Melinda reported negative cash flow from operating activities of NIS 62.9 million, negative cash flow from investing activities of NIS 13.5 million, and positive cash flow from financing activities of NIS 59.5 million. For the full year its net cash flow was negative NIS 16.9 million. In the same year, dividends paid to the non-controlling shareholders of Melinda totaled NIS 65.7 million.
| The Melinda minority layer, 2025 | Amount |
|---|---|
| Melinda profit | NIS 232.0 million |
| Profit attributable to Melinda minorities | NIS 120.6 million |
| Dividends paid to Melinda minorities | NIS 65.7 million |
| Book value of Melinda minorities | NIS 830.1 million |
| Melinda cash flow from operating activities | Negative NIS 62.9 million |
That means the minority layer in Melinda did not remain only at the reported-profit line. It also received real cash. From the perspective of Neto shareholders, that sharpens the key question: not only how much Melinda earned, but how much of that earning power actually moved upward to the right layer.
That is where another easy-to-misread figure enters. At the Neto parent level, the company reports distributable profits of about NIS 347 million as of December 31, 2025, and says it has no external restrictions on dividend distribution. At the same time, it paid no dividend in 2024 or 2025. That does not mean the company lacks the legal ability to distribute. It does mean that the profit test at the parent and the value-capture test from the subsidiaries are two different questions.
What Needs To Be Measured From Here
If the Melinda minority layer is isolated properly, the checkpoints ahead become fairly clear:
| What to watch | Why it matters |
|---|---|
| The ratio between consolidated profit and profit attributable to Neto shareholders | This is the direct measure of whether value capture is improving or still weakening |
| Melinda's payout policy relative to its cash flow | A dividend to minorities in a year of negative operating cash flow means profit alone is not enough to understand the economics |
| Any further sale of Melinda shares | That can create one-off value in equity, but it can also reduce Neto's future share of Melinda economics |
| The gap between the consolidated-profit headline and what reaches the listed-company layer | This is exactly where the market can read 2025 too optimistically |
That also leads to the right reading of 2025. Neto is not a case where the only question is whether the operating business works. The business does generate profit. The narrower and more important question is who really benefits from that profit, and at which layer.
Conclusion
At Neto Holdings, Melinda's profit is not the same thing as Neto shareholders' profit. In 2025 the group earned NIS 212.3 million, but only NIS 86.7 million remained at the public-shareholder layer. Almost the entire gap sits in Melinda, where minorities received NIS 120.6 million of profit and NIS 65.7 million of dividends.
That is exactly why Neto needs to be read through the holding-company layer, not only through the consolidated report. As long as Melinda remains the main operating engine and as long as its minority layer is this large, the consolidated number will stay higher than the value truly captured for Neto shareholders.
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