Mega Or: how much of the growth leap still sits on the parent balance sheet
At Mega Or's parent company, 2025 operating cash flow came in at only NIS 150.0 million, against NIS 428.6 million of loans to held companies and NIS 181.8 million invested in equity-accounted holdings. That means the Data Centers leap still relies materially on securities monetization, bonds, and commercial paper at the parent, rather than on ring-fenced project finance.
The main article already argued that Mega Or's 2026 question is not core-asset quality, but whether the company can move the Data Centers build-out from a valuation engine into a cash engine without putting more and more pressure on the funding layer. This follow-up isolates the point that remained too compressed there: how much of the new growth platform is really standing on project finance, and how much of it still sits on the listed parent.
The right framing here is not FFO and not the consolidated balance sheet. The right framing is the parent's all-in cash flexibility. In other words, how much cash Mega Or Holdings itself produced and retained after the year's real cash uses. On that test the picture is sharp. At parent level, 2025 net profit was NIS 844.3 million, but operating cash flow was only NIS 150.0 million. In the same year, the parent extended NIS 428.6 million of loans to held companies, invested NIS 181.8 million in equity-accounted holdings, and paid NIS 130 million of dividends.
That is not a technical footnote. The report also states explicitly that Mega D.C is funding its activity through shareholder loans from Mega Or, while alternative options for financing the projects are still being examined. Put differently, as of the reporting date the Data Centers leap is not yet presented as a platform that funds itself separately. It still sits on the parent's treasury.
That is the core point. In 2025, the gap between what the parent generated internally and what it sent downward was closed mainly through securities activity and debt moves at parent level: a net NIS 822.6 million cash inflow from securities measured at fair value through profit or loss, NIS 809.0 million of bond issuance, NIS 589.4 million of commercial-paper issuance, and NIS 198.7 million of new long-term loans and other liabilities.
Parent Cash Flow: What Came Back Up Did Not Cover What Went Down
To understand how much of the growth story still sits on the parent, it helps to start with the simplest parent-level cash bridge. The parent produced NIS 150.0 million of operating cash flow. It also received NIS 121.8 million of loan repayments from held companies. But in the same year it sent NIS 428.6 million back down as fresh loans to held companies, deployed NIS 181.8 million into equity-accounted companies, and paid NIS 130 million of dividends.
That chart sharpens what is easy to miss in a quick read of the consolidated statements. Even after NIS 121.8 million came back up from held companies, the parent still shows a negative cash bridge of NIS 468.6 million before even counting the NIS 564.4 million invested in investment property and investment property under development. So yes, some cash does move upward inside the group. But it still moves up at a slower pace than the cash moving down from the parent into held companies and the broader investment layer.
That is exactly why 2025 should not be read through the parent's net-profit line. The accounting number looks strong. The funding picture looks very different. The parent did not finance the growth leap out of its own recurring cash generation.
What Closed The Gap: Parent Treasury Work, Not Ring-Fenced Project Finance
This is where the real analytical distinction appears. If Mega D.C were already standing mainly on ring-fenced project finance at asset level or at the dedicated-company level, the filings would be expected to show less dependence on the listed parent's treasury and a clearer separation between project funding and parent funding. That is not what the report shows.
In practice, the parent's main cash sources in 2025 were these:
| Parent-level funding source or use | 2025 | What it says |
|---|---|---|
| Net securities monetization | NIS 822.6 million | The securities portfolio became a real funding source, not just a valuation layer |
| Bond issuance | NIS 809.0 million | The parent kept direct access to the bond market |
| Bond repayment | NIS 730.7 million | Part of the new issuance also went into refinancing existing debt |
| Commercial-paper issuance | NIS 589.4 million | A short-term funding layer was also built at parent level |
| Commercial-paper redemption | NIS 189.5 million | This is active treasury management, not fully free cash |
| New long-term loans and liabilities | NIS 198.7 million | Another debt layer was added |
| Repayment of long-term loans and liabilities | NIS 73.9 million | Even this layer is being rolled, not only opened |
That table is the heart of the distinction between a growth story and a funding story. Yes, Mega Or kept impressive access to capital markets in 2025. Yes, it ended the year with NIS 852.8 million of cash at the parent. But the same report also shows how that position was built: not only from operating cash flow, but from a mix of securities monetization, bond issuance, commercial paper, and additional borrowing.
That makes the more accurate description of 2025 not "Mega D.C is already funded separately," but the parent is still acting as the funding bridge for the leap. Even as the group progresses in contracts and delivery, the funding layer has not yet truly separated from the listed parent balance sheet.
One more small but important detail supports that reading. In the parent's separate balance sheet, year-end cash stood at NIS 852.8 million, but current tradable financial assets fell to only NIS 58.3 million, down from NIS 159.4 million at the end of 2024. Alongside NIS 19.5 million of fair-value investments classified as non-current, that suggests that part of the year-end flexibility was built through active monetization and management of the securities layer, not only through recurring cash production from operations.
Exposure To Held Companies Rose, While The Mega D.C Split Stays Partial
Once the parent-only balance sheet is isolated, the link between the parent and the held companies clearly did not shrink. It expanded. Long-term receivables from held companies, included within investments in held companies, rose to NIS 1.469 billion at the end of 2025 from NIS 915.6 million at the end of 2024. At the same time, guarantees in favor of held companies rose to NIS 509.1 million from NIS 329.8 million a year earlier.
Those numbers do not prove that the full increase belongs specifically to Mega D.C, and that caution matters. The separate note does not break down how much of the NIS 1.469 billion is specifically tied to the Data Centers platform. So it would be wrong to assign the entire balance automatically to Mega D.C.
But the economic direction is still clear. On one side, the company states explicitly that Mega D.C is funding its activity through shareholder loans and that other financing options are still under review. On the other side, the parent-level statements show a sharp rise in exposure to held companies. So even without a full subsidiary split, 2025 is hard to read as the year in which the new activity already moved off the parent balance sheet.
The second side of the picture also matters. The parent is not only a one-way funding pipe. In 2025 it recorded NIS 59.5 million of financing income from held companies and NIS 5.9 million of management-fee income. So there is an internal compensation layer for the financing and services it provides. But that is still not the same as external ring-fenced project finance. It is intra-group pricing, not proof that the projects already stand financially on their own.
What This Means For 2026
The takeaway from the separate statements is not that Mega Or is under stress. If anything, the parent ends 2025 with high cash, open debt-market access, and a proven ability to raise and recycle funding. The point is different: the growth leap still sits on the parent far more than the headline of signed Data Centers capacity might imply.
That changes the read of 2026 because the real test is not only how many MW were signed and how many facilities get delivered. The test is also how quickly the funding burden starts to move away from the parent's cash, securities portfolio, and debt stack, and toward more dedicated funding at project level or toward cash that starts flowing back up from the new activity itself.
The three key checkpoints from here are straightforward. First, whether dedicated project finance or separate bank funding appears at Mega D.C or at individual Data Centers assets, instead of continued reliance mainly on shareholder loans. Second, whether the parent's balances and guarantees to held companies keep climbing sharply even after delivery begins. Third, whether cash starts to move back up from the new activity, rather than 2026 becoming another year of securities sales, bond issuance, and commercial paper at the parent.
Until those three things happen, the more conservative read is also the more accurate one: Mega Or's legacy real-estate core gives the group the credibility and market access to fund the leap, but the Data Centers growth platform still relies materially on the listed parent. That does not cancel the value being created. It simply means that the value is not yet separate from the funding burden that supports it.
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