Israeli Government Companies Pay Only 1.6 Billion Shekels in Dividends, Far Below 8 Billion Target

When Roee Kahlon took office as head of the Israeli Government Companies Authority, he announced a goal to collect 8 billion shekels in dividends from state-owned companies in 2025. Nearly two years later, the companies declared dividends totaling only 1.6 billion shekels, a significant shortfall from the original target. However, this amount still represents an increase compared to previous years, with 1.1 billion shekels expected in 2024 and 648 million in 2023. The Authority remains optimistic that efforts will yield better results next year.

Among the largest dividend declarations were Israel Aerospace Industries with 772 million shekels and Rafael Advanced Defense Systems with 263 million shekels. However, these companies have not yet paid the dividends due to outstanding debts owed by the Ministry of Defense. Ashdod Port Company distributed 300 million shekels, and Israel Natural Gas Lines (NATGAS) paid 120 million shekels.

The report also highlights salary costs within government companies, with an average gross salary of 19,000 shekels. Israel Ports Company, with 395 employees, has the highest average salary at 39,000 shekels, followed by Rafael (34,600 shekels), Ashdod Port (34,000 shekels), Israel Electric Corporation (30,000 shekels), and Israel Aerospace Industries (29,000 shekels). The lowest average salaries are at Amidar (16,400 shekels) and the Community Centers Company (5,185 shekels). Senior executives at Rafael and IAI earn the highest gross salaries, approximately 85,170 and 81,687 shekels respectively. The largest wage gap between executives and workers is at the Community Centers Company, exceeding 15 times.

Regarding workforce composition, Ethiopian Israelis represent 2.9% of employees, higher than their 1.75% population share. Employees with disabilities constitute 3.5%, with the highest rate (10%) at the Transportation Company (TSA). Arab Israelis are underrepresented, except at the Environmental Quality Services Company (13%) and at Amidar, Netivei Israel, and the Electric Company (3%). Women hold the highest senior management representation at Netivei Ayalon (48%), followed by Amidar (39%), the Ports Company (37%), and the Tel Aviv Light Rail (34%).

Financially, the government companies earned total revenues of about 113 billion shekels in the reporting period, up from 102 billion in 2024, mainly due to increased sales in defense companies. Operating profit rose to 9.5 billion shekels from 5.8 billion. Net financing expenses decreased to 0.4 billion shekels from 1.3 billion, largely due to lower interest costs at the Electric Company linked to currency exchange rates on defense deals.

The report also notes a significant impairment loss of approximately 1.367 billion shekels at Mekorot, Israel's national water company, due to new regulatory compensation models. Mekorot filed a petition with the Supreme Court over concerns about its financial stability and credit rating. The Government Companies Authority oversees 70 companies employing about 58,000 workers and manages financial targets, debt issuances, structural changes, and company mergers.