Israel Canada Reports Mixed Sales and Losses Amid Hotel Sector Challenges in H1 2026
Israel Canada released its financial results for the second quarter and first half of 2026, revealing mixed performance across its real estate projects and significant losses in its hotel operations. In the Rainbow project at Tel Aviv's Shde Dov district, the company sold 3 apartments in Q2 and 7 in the first half of 2026, compared to 59 sold in 2025 and 99 in 2024. Overall, 275 of 459 apartments have been sold in this project. The average price per square meter for the Q2 sales was 80,500 shekels, down from 83,200 shekels in the previous quarter and 85,600 shekels in 2025. Israel Canada lowered the expected profit margin for Rainbow to 19%, down from 23% in 2024 and 20% in 2025.
At the Midtown Jerusalem project, 12 apartments were sold in Q2 and 29 in the first half of 2026, compared to 48 sold in 2025 and 88 in 2024. To date, 284 of 695 apartments have been sold. The average price per square meter in Q2 was 72,000 shekels, slightly higher than Q1 but below the 2025 average of 78,200 shekels. The expected profit margin was adjusted to 21%, down from 22% in Q1 2026.
Across all projects, Israel Canada sold 142 apartments in the first half of 2026, totaling approximately 771 million shekels in revenue. Q2 sales accounted for 56 apartments and 322.3 million shekels, down from 86 apartments and 448.8 million shekels in Q1. The company recognized a financing component of about 6 million shekels related to favorable payment terms granted to buyers, with a total exposure of roughly 146 million shekels, though it currently cannot assess the realization risk.
The company reported a net loss of about 36 million shekels in H1 2026, primarily due to its hotel operations suffering from the security situation and seasonal factors. Hotel operating costs rose sharply to 243.6 million shekels from 168.4 million shekels in the prior year period. Following the outbreak of Operation "Roaring Lion," cancellations and occupancy declines forced Israel Canada to close some hotels and place employees on unpaid leave. However, Q2 showed improvement with a net profit of approximately 22 million shekels, although hotel activities continued to weigh on results.
Regarding the merger with Acro, announced in February 2026, Israel Canada plans to finance the cash portion of the deal through a combination of internal cash, bank financing, asset sales, and debt issuance. The merger values the combined company at about 10 billion shekels, with 60% paid in shares and 40% in cash. Both companies have unused credit lines totaling around 470 million shekels, and additional cash flow of approximately 600 million shekels is expected in 2027-2028 through asset disposals or bringing in partners.
Israel Canada noted that hotel operations have resumed full activity by the report date, with occupancy expected to recover in Q3. The company also negotiated rent adjustments with some hotel property owners due to the impact of the recent security events.
