Mattei Hadar: Why The 2025 FFO Does Not Mean What It Seems To Mean
Mattei Hadar’s FFO jumped to NIS 25.5 million in 2025, but NOI stayed at just NIS 1.035 million and cash flow from operations remained negative at NIS 1.391 million. The reason is that the metric stripped out the revaluation gain, but did not strip out the NIS 29.934 million of other income from Beit Dagan.
Why The FFO Line Needs Its Own Follow-up
The main article argued that 2025 looked like a peak year, but that the recurring rent base remained very small. This continuation isolates the FFO line, a profit metric widely used in income-producing real estate, because at Mattei Hadar it can easily look like proof that the company has already moved from land events and revaluations into recurring yield economics. That is the wrong read.
The numbers are blunt. FFO attributable to shareholders jumped to NIS 25.533 million in 2025, after negative NIS 859 thousand in 2024. But NOI, the operating income generated by the yielding assets themselves, amounted to only NIS 1.035 million, versus NIS 978 thousand in 2024, while cash flow from operations remained negative at NIS 1.391 million. In other words, FFO improved by NIS 26.392 million year over year while NOI improved by only NIS 57 thousand.
That gap is not a presentation issue. It explains what actually happened in 2025: FFO cleaned out the real-estate revaluation, but it did not clean out the Beit Dagan event that was booked as other income. That is why it looks more recurring than it really is.
| 2025 metric | Amount | What it really says |
|---|---|---|
| Rental revenue | NIS 1.097 million | The annual rent base of the company |
| Total NOI | NIS 1.035 million | The operating power of the rental layer before corporate overhead |
| Same Property NOI | NIS 1.035 million | Even on a same-property basis, there was no new rental engine here |
| Other income | NIS 29.934 million | The Beit Dagan event, not rent |
| FFO attributable to shareholders | NIS 25.533 million | A metric that stayed high because the Beit Dagan event was not stripped out |
| Cash flow from operations | NIS 1.391 million negative | The core cash line still does not support the headline |
The Bridge Behind The Jump
The FFO reconciliation makes the bridge clear. It starts with net profit of NIS 38.014 million. From there, the company subtracts NIS 16.281 million of investment-property fair-value gains, adds back NIS 43 thousand of depreciation, adds NIS 3.735 million of tax effects related to those adjustments, and adds NIS 22 thousand of associate-related adjustments. That gets to FFO of NIS 25.533 million.
What is missing from that bridge? The NIS 29.934 million of other income. It is not neutralized in the FFO table, so the Beit Dagan event remains at the core of the metric. That is a material distinction. When a reader sees FFO in an income-producing real-estate name, the instinct is to treat it as a cleaner version of rental earnings. Here that is only half true: the metric does strip out the revaluation, but it still leaves in a one-off gain from the land-return event.
So the 2025 FFO is not a bad metric. It is simply measuring something different here: profit after removing revaluations, but before removing the Beit Dagan monetization event. That is a crucial difference.
The Lift Did Not Even Come From The Rental Segment
The segment note makes the point even sharper. In the rental segment, 2025 external revenue was NIS 1.097 million and segment result was NIS 1.035 million. In agriculture, external revenue was only NIS 9 thousand and segment result was a NIS 145 thousand loss. But the NIS 29.934 million of other income was allocated to the agriculture side rather than to the rental segment, meaning to the land-return event rather than to the yielding-assets engine.
That is the heart of the issue. At both the segment level and the FFO-bridge level, Beit Dagan is doing far more work than rent. So it is wrong to read NIS 25.5 million as if it were the earning power of a yielding-property portfolio. The rental layer itself is still tiny, and the report also shows that Same Property NOI was identical to total NOI. In other words, there was no real step-up inside the income-producing portfolio itself during 2025.
Put simply, FFO did not lie. The reader can still mislead themselves if they assume that a high FFO must have come from high rent.
What Cash Says
The cash-flow statement provides the final reality check. If 2025 FFO reflected a genuinely expanded yielding base, one would expect at least some sign of that in operating cash flow. That did not happen. Cash flow from operations remained negative at NIS 1.391 million, almost unchanged from 2024.
The cash improvement came instead through investing cash flow. That section includes NIS 12.707 million of proceeds from the land return and NIS 4.396 million of taxes paid, alongside movements in the securities portfolio. So cash improved through a land event as well, not through rent receipts.
That chart shows why 2025 cannot serve as an easy run-rate into 2026. NOI stayed around NIS 1 million. Operating cash flow stayed negative. Only FFO and net profit jumped, and both jumped through a layer that is not part of the ordinary rental economics.
What This Means For 2026
The analytical implication is fairly simple. At Mattei Hadar, 2025 FFO is not a good starting point for what a normal year in income-producing real estate should look like. It does show that the company managed to pull real value out of the Beit Dagan event even after stripping out revaluations. It does not show that the rent base made a similar move.
So the right 2026 question is not whether the company can “hold NIS 25 million of FFO.” The real question is whether it can do one of two things: either add another monetization event of similar size, or genuinely expand the NOI layer so that the sector’s standard metrics start leaning on yielding activity rather than on land events. Until that happens, FFO will remain a figure that has to be read cautiously at Mattei Hadar, not a clean shortcut to the company’s recurring economics.
Conclusion
Mattei Hadar’s 2025 FFO does not mean that the company suddenly became an income-producing real-estate platform with NIS 25.5 million of recurring earnings. It means something narrower: after stripping out revaluations, the accounts still contain a large profit from the Beit Dagan event, and that profit was not stripped out of the metric.
That is why the reader needs to keep three layers separate here: rent, FFO, and cash. Rent is still very small. FFO was lifted by a non-rent event. And operating cash has still not joined the celebration. Until those three layers line up, 2025 remains a successful monetization year, not a proof year for a new yielding base.
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