Rimon: The Backlog Is Large, But Who Is Funding The Road To Cash?
Rimon's 2025 bottleneck was not demand but the financing of the bridge to cash. Revenue and backlog grew quickly, but receivables and accrued income expanded to NIS 573.8 million and operating cash flow fell to negative NIS 112.8 million.
The Backlog Is Here, The Cash Is Not
The main article already made the basic point: the debate around Rimon is not whether demand exists. It does. Revenue rose to NIS 1.47 billion, EBITDA reached NIS 221.2 million, and backlog stood at roughly NIS 2.99 billion around the reporting date, with about NIS 1.20 billion slated for 2026. This follow-up isolates the part of the thesis that now matters most: the move from execution and reported profit to cash.
The number that captures the whole issue is the gap between NIS 91.2 million of net profit and negative NIS 112.8 million of operating cash flow. That is not a small quarterly mismatch. It is a sign that 2025 growth did not fund itself. Rimon had to finance a long bridge between work performed and cash collected.
The good news is that credit quality does not appear to be the core problem for now. About 45% of receivables and accrued income at the end of 2025 were owed by the State of Israel and other public-sector bodies, and the group did not record an expected credit loss allowance. The less comforting point is duration. Customer credit terms range from net 60 to net 150, and part of the project portfolio is billed by milestones. That means the company can execute, recognize revenue, and even show profit well before the cash arrives.
Where The Cash Gets Stuck
By the end of 2025, receivables and accrued income had swollen to NIS 573.8 million, up from NIS 379.0 million a year earlier. This was not a routine increase in activity. Inside that balance were NIS 164.3 million of open trade receivables and another NIS 408.6 million of accrued income. In other words, most of the build sat in the most cash-sensitive area: work that had already found its way into the income statement, but had not yet reached the bank account.
The report also shows where that build came from. Management attributes it mainly to ongoing progress in the infrastructure execution segment, milestone progress in Global Solutions, and the first-time consolidation of Pach Taas. That matters because the very engines that support the growth narrative are also the engines that pull working capital upward. Backlog is not only a revenue engine. It is also a cash consumer.
Contract assets also rose, from NIS 8.6 million to NIS 13.4 million. That is still small relative to receivables and accrued income, but it points in the same direction: more execution running ahead of billing. At the same time, other receivables climbed to NIS 141.6 million from NIS 86.1 million. So even if one takes comfort from the likelihood that receivables will eventually be collected, the broader picture remains the same: the pressure does not sit only in trade receivables. It runs through the entire working-capital envelope.
| Item | 2024 | 2025 | Change |
|---|---|---|---|
| Receivables and accrued income | 379.0 | 573.8 | 194.8 |
| Contract assets | 8.6 | 13.4 | 4.9 |
| Supplier credit | 99.4 | 183.3 | 84.0 |
| Customer advances | 19.0 | 117.3 | 98.3 |
That table exposes an important point: suppliers and customers are already helping to finance the bridge. Supplier credit rose to NIS 183.3 million, with typical terms of net 60 to net 120. Customer advances jumped to NIS 117.3 million from NIS 19.0 million. The board commentary attributes most of that increase to advances brought in with Pach Taas on first consolidation, plus a further increase in customer advances in the infrastructure execution segment. That means Rimon's cash deficit would have been deeper if the operating chain itself had not financed part of the gap.
That is the heart of the story. If suppliers and customers are already carrying part of the funding load, then 2026 will not be judged only by how much work gets executed. It will be judged by whether this funding model remains stable. If any one of the three pillars weakens, slower collections, tougher supplier terms, or weaker customer advances, the backlog will look materially less comfortable.
Who Is Funding The Road Until Cash Arrives
Once the cash-flow statement comes into view, the picture sharpens further. Non-cash adjustments added about NIS 116.2 million in 2025, but working-capital changes consumed NIS 267.7 million, and that gap alone wiped out the year’s reported profit. After net interest and tax cash payments, the result was negative operating cash flow.
From there the next question is obvious: who filled the hole. The answer is a mix of banks, the bond market, suppliers, and customers that prepaid. Short-term bank credit reached NIS 296.0 million. Total bank and other credit-provider debt rose to NIS 518.2 million, up from NIS 388.0 million a year earlier. Total credit lines available to the group stood at NIS 437.8 million, of which NIS 308.5 million were used at year-end. By the report date, used credit had already increased to NIS 333.7 million, which means unused headroom fell from about NIS 129.3 million to roughly NIS 104.2 million.
There is another layer here that a cash-only view misses. Rimon is an infrastructure contractor, so financial flexibility is measured not only by cash and committed credit lines, but also by guarantee capacity. By the end of 2025, total guarantees posted by the group stood at NIS 387.6 million, of which NIS 288.3 million were performance guarantees. For a project contractor, that is not a footnote. It is part of the funding machine behind the backlog.
That said, it is important not to overstate what the filings actually support. This does not currently read like a group-level covenant squeeze. The company says it is in compliance with its financial covenants, and its Series A bond metrics still look comfortable, with covenant-defined equity of NIS 610 million and an equity-to-net-balance-sheet ratio of 35%, versus a minimum threshold of 20%. So Rimon’s bottleneck today is not an immediate default event. It is a more business-driven and more important question: can growth begin to fund itself.
In all-in cash flexibility terms, the picture stays tight even before bringing in acquisitions or other longer-horizon strategic uses of cash. After negative operating cash flow of NIS 112.8 million, the company spent NIS 76.6 million on property and equipment, paid NIS 17.8 million of lease principal, repaid NIS 20.2 million of long-term bank debt, and repaid NIS 8.75 million of bond principal. That means the year’s internal cash margin was negative even before testing broader growth initiatives. External funding did the heavy lifting.
What 2026 Has To Prove
This is exactly where backlog comes back into the story. Around the reporting date, backlog stood at NIS 2.99 billion, with about NIS 1.20 billion intended for 2026. That is a strong figure, but it cuts both ways. If milestones turn into collections quickly enough, 2026 can become the year in which backlog starts releasing cash. If execution once again runs ahead of collections, that same visibility will become an even heavier financing requirement.
There is a credible counter-thesis. The company is not currently dealing with obviously weak customers, a large part of the exposure is public-sector, and it already received support through customer advances and supplier credit. Management also says that, aside from short-term on-call funding for routine operations, it does not expect to require new sources to cover ongoing operating needs over the next year. That is not something to dismiss.
But for that claim to become economic reality rather than a sentence in a filing, four things need to happen in practice. First, receivables and accrued income have to stop growing faster than revenue. Second, customer advances and supplier credit need to hold without a meaningful deterioration in terms. Third, unused credit headroom needs to stop shrinking. Fourth, at least one of the coming reporting periods has to show a clear recovery in operating cash flow.
Bottom Line
Rimon’s backlog is large, its growth engines are clear, and demand for projects is not the central debate. The real debate is who carries the bridge period. In 2025 the answer was banks, suppliers, and customers that brought cash forward. That can still work in 2026, but this is no longer a clean growth thesis. It is a funded-growth thesis.
So the next test for Rimon is not whether it can report another strong backlog or another strong revenue number. The test is whether the company can start proving that its backlog can turn into cash without tightening credit lines further, without leaning harder on guarantees, and without deepening the working-capital gap. Until that happens, profit is only the first stop in the story.
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