Mekorot Reports Q2 2026 Net Profit Rise to 243 Million Shekels

Mekorot, Israel's national water company, announced a net profit of approximately 243 million shekels for the second quarter of 2026, a significant increase from about 62 million shekels in the same quarter last year. This rise is largely attributed to a positive accounting effect on fixed assets due to a drop in interest rates, which influenced the discount rate applied to asset valuation.

Despite the quarterly improvement, Mekorot's net profit for the first half of 2026 was around 110 million shekels, down from 244 million shekels in the corresponding period of 2025. This decline reflects the ongoing impact of regulatory changes implemented at the start of 2026, which altered the company’s operational model, including the recognized return and fixed asset accounting. As a result, Mekorot recorded a net impairment loss of about 83 million shekels in the first half of 2026, following a 1.4 billion shekel impairment in 2025.

The company’s revenue for Q2 2026 stood at roughly 1.43 billion shekels, nearly unchanged from 1.44 billion shekels a year earlier. The slight decrease was partly due to a 9.5% drop in agricultural water consumption during the first half of the year, attributed to a rainy March. Operating profit rose to approximately 138 million shekels from 99 million shekels in Q2 2025, and EBITDA increased by 16% to about 447 million shekels.

Mekorot invested around 851 million shekels in the first half of 2026 in water infrastructure development and renewal projects, maintaining its annual development plan budget of about 1.6 billion shekels. However, the company’s water sector liabilities, including deferred regulatory accounts, surged by 65% over the past year to approximately 2.1 billion shekels. Its leverage ratio increased to 71.5% from 65.8% the previous year. Cash flow from operating activities declined to about 113 million shekels in the first half of 2026, compared to 325 million shekels in the same period last year.