Ramot Bair in the first quarter: Collection arrived, but Mofet became the harder test
Ramot Bair opened 2026 with a small loss and weaker gross profitability, but that is not the main event. The quarter proved that Halutz Phase C is starting to turn into cash, while Mofet and Phase D still need pre-sales, equity and construction financing before they can replace the cash source that is running off.
Ramot Bair passed the first test flagged in the 2025 annual coverage: Halutz Ramat Hasharon Phase C began turning sold apartments into collected cash. Operating cash flow of NIS 216.5 million, a sharp drop in customers and accrued income, and full repayment of the project construction loan show that the main risk is no longer only execution. Still, the quarter does not clean up the story. Most of the cash that came in immediately moved into restricted project accounts, debt repayments and the post-quarter redemption of Series B bonds, while Mofet and Phase D now need to meet much harder financing conditions: pre-sales, equity and construction lending. The NIS 3.7 million quarterly loss matters less than cash timing, but it also shows that high finance costs remain before the next project starts recognizing revenue. The current read is that Halutz Phase C reduced real pressure, but has not yet created a new liquid growth layer. The next two quarters will be judged mainly by the remaining Halutz collections, Mofet's ability to meet lending conditions, and whether new sales can move forward without relying even more on soft payment terms.
The Quarter Proved Collection, Not Earnings
The company is a residential developer focused on urban renewal, but right now its economics look more like a working-capital and funding machine than a normal earnings machine. Halutz Phase C received Form 4 in January 2026, so the question moved from construction to delivery, collection and debt repayment. That is what happened in the quarter: operating cash flow was NIS 216.5 million, compared with negative NIS 70.8 million in the parallel quarter, mainly because Halutz apartments were delivered and buyers paid.
The gap between the income statement and the cash picture is large enough that the quarter should not be read only through the bottom line. Revenue was NIS 39.4 million, slightly above NIS 37.8 million in the parallel quarter, but gross profit fell to NIS 9.6 million from NIS 13.6 million. Gross margin fell to about 24.5%, partly because apartments sold in Prague carry lower profitability. After net finance expenses of NIS 10.5 million, the company posted a NIS 3.7 million loss.
The more important number is on the balance sheet: customers and accrued income fell from NIS 247.3 million at year-end 2025 to NIS 60.6 million at quarter-end. That is evidence that buyer debt at Halutz is being closed. At the same time, restricted deposits jumped to NIS 105.9 million, because part of the buyer collections entered project accounts and was used for repayments. So the all-in cash picture is not "the company generated NIS 216 million and kept it." It collected cash, but most of that cash already had a debt-closing job.
The chart captures the correct framing: on an all-in cash-flexibility basis, the quarter released pressure rather than built a wide cash cushion. Unrestricted cash rose to NIS 46.6 million, but that increase came alongside NIS 100.5 million used in investing activity, mainly through project accounts and restricted deposits, and another NIS 94.3 million used in financing activity. After quarter-end, the company fully redeemed Series B bonds with NIS 97.5 million par value, at about NIS 98.5 million plus roughly NIS 1 million of accrued interest.
Mofet and Phase D Are the Next Balance-Sheet Test
Halutz Phase C reduced uncertainty, but its new contribution is nearing the end. At quarter-end, 115 of the 123 apartments marketed by the company had been sold, and the marketing rate was 91%. By the signing date of the financial statements, 100 apartments had been delivered to buyers and another 43 to landowners. Eight apartments remained unsigned at quarter-end, and one more contract was signed after the period. In other words, the project still matters for collection and clean-up, but it is no longer a major growth engine for the coming years.
Mofet is the next story, and the quarter shows only partial progress there. At quarter-end, 12 sale agreements had been signed, covering about 1,546 equivalent square meters and consideration of about NIS 60.3 million excluding VAT. By the report publication date the number rose to 15 agreements. The company has not yet recognized revenue from Mofet, excavation and shoring works are nearing completion, and the completion rate excluding land is 5%. The expected construction completion date is the first quarter of 2029.
Mofet's financing terms sharpen the bottleneck. After quarter-end, the NIS 175 million land loan was extended to April 30, 2027, and the construction credit facility was updated to up to NIS 100 million. But opening construction financing requires at least NIS 95 million of equity and pre-sales of at least NIS 117 million excluding VAT, assuming the change permit is received. Against that, even after the move to 15 agreements, the company refers to about NIS 79 million of purchase contracts excluding VAT. That is progress, not condition satisfaction.
| Focus | What Advanced | What Is Still Missing |
|---|---|---|
| Halutz Phase C | Form 4, deliveries, collection, full repayment of the project loan | Sale of the remaining apartments and release of remaining proceeds |
| Mofet | 15 sale agreements by report date, excavation and shoring nearing completion, land-loan extension | Financing conditions: at least NIS 95 million equity and at least NIS 117 million of sales |
| Halutz Phase D | Demolition, excavation and shoring permit after quarter-end, new plan for 44 added units deposited for objections | Opening financing requires about NIS 51.5 million equity and 15 pre-sales worth about NIS 64 million |
| Hahagana | Fair value of NIS 204 million remained unchanged | No binding Ichilov agreement and no construction or leasing timetable |
Halutz Phase D also advanced, but it remains far from revenue. A demolition, excavation and shoring permit was received in April, and in May a plan for 44 additional apartments without extra rights was approved for deposit for objections. On the other hand, opening Phase D financing requires equity of about NIS 51.5 million and 15 pre-sales worth at least NIS 64 million. At quarter-end the full required equity had not been injected and no apartments had been sold in the project.
Sales Terms Still Keep a Yellow Flag On
The quarter proves that collection at Halutz has started to work, but it does not eliminate the sales-quality question. To preserve sales pace, the company sometimes allows buyers to pay 15% to 25% near signing and the remaining consideration close to delivery. At quarter-end, that benefit applied to 79 apartments, about 70% of all apartments sold in Halutz Phase C, and to all 15 buyers in Mofet. In addition, all 15 Mofet buyers received an exemption from linkage to the construction-cost index, on purchase contracts totaling about NIS 79 million excluding VAT.
This is not a technical accounting issue. The company does not itself underwrite apartment buyers when granting these benefits, so the risk is cash and funding related: the buyer commits today, a large part of the cash is deferred, and the company continues to finance land, planning and works until a later stage. At quarter-end and by the report date, there had been almost no cancellations, except for one apartment in Halutz Phase C. That supports the read that the risk remains under control. Still, in Mofet the soft terms appear exactly when the project needs sales to become a financing anchor.
The environment is not helping. The company describes slower sales at the start of 2026, industry pressure from high interest rates, higher construction costs and the security situation. On the other side, Prague is advancing: in Q1 the company recognized about NIS 17 million of revenue from the sale of 13 apartments in Zelene Mesto, and by report date 49 of the 57 acquired apartments had been sold. That activity contributed cash and reduced inventory, but it does not replace Mofet and Phase D as the next main engines in Israel.
The company is still compliant with its financial covenants. Consolidated equity attributable to owners is NIS 165.3 million, compared with a NIS 70 million minimum under Series C and D bond deeds. The debt-to-collateral ratio for Series C is 43%, with NIS 82.1 million of net Series C debt backed by NIS 190.0 million of expected Mofet surplus. Net debt to CAP is 77.17%, below the 87% ceiling. These are relatively comfortable figures, but they rely on a project that is still early in financing, sales and revenue recognition terms.
Conclusion
The first quarter improves Ramot Bair's risk picture, but in a more precise way than the cash headline alone suggests. Halutz Phase C proved that cash is starting to arrive, Series B was redeemed after quarter-end, and the project construction loan was repaid. On the other hand, accounting results remain weak, the consolidated working-capital deficit is about NIS 70 million, and the company still depends on Mofet and Phase D moving from plans and first sales into full construction financing.
The current read is more positive than at year-end 2025, because the first collection test closed in practice and not only on paper. The counter-thesis is that the company is still pushing part of the 2026 risk forward: Mofet needs stronger sales and full financing terms, Gani Dan and Nitzanim still require extensions, and Hahagana remains an illiquid accounting value. What will shape the market read in the coming quarters is less net profit and more three signs: whether the remaining Halutz proceeds are released without delay, whether Mofet reaches the sales and equity threshold required for construction financing, and whether new sale terms improve instead of continuing to rely on deferred payments and index-linkage exemptions.
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