Netto Melinda Reports Sales Growth but 12.5% Drop in Net Profit in Q2 2026
Netto Melinda, the Israeli food importer controlled by Dudi Ezra and David Matsa, reported an 8.6% increase in revenues to 1.3 billion shekels in the second quarter of 2026. However, the company’s net profit declined by 12.5% to 44.3 million shekels. This profit drop was mainly due to higher selling and marketing expenses and a sharp rise in financing costs, largely driven by currency exchange rate differences. Following the earnings release, Netto Melinda’s shares fell over 10% on the Tel Aviv Stock Exchange.
Managed by Ofer Lev and Oren Avni, Netto Melinda operates in three sectors: the local market (marketing and distribution of kosher fresh poultry and meat), import and marketing, and its manufacturing plants, including Tivon Wil, Villiger Industries, Delidag, the Three Bakers, Palace Industries, and Rich Industries. The company noted that the sales increase occurred despite Passover falling in Q1 this year, unlike last year when Passover shopping extended into Q2. The comparison was also affected by lower sales in Q2 2025 due to the "With the Lion" war and an outbreak of foot-and-mouth disease in Europe, which reduced fresh meat imports.
Despite revenue growth, Netto Melinda’s gross profit rose only 8.4%, with gross margin stable, while selling and marketing expenses surged 13.4% to about 88 million shekels, attributed mainly to higher cooling storage, vehicle maintenance, and transportation costs. Operating profit increased modestly by 1.5% to 65.7 million shekels, with operating margin falling from 5.3% to 4.9%. A one-time capital gain of around 3 million shekels from selling its stake in subsidiary Delidag Eitan helped lift operating profit to 69 million shekels. For the first half of 2026, operating profit declined 1.5% to 153.4 million shekels, with margin dropping from 6.2% to 5.3%.
Financing expenses more than doubled to 11.2 million shekels in Q2 2026, while financing income fell sharply to 350,000 shekels, resulting in net financing expenses rising fifteenfold to 10.9 million shekels. This surge was mainly due to currency exchange rate differences and reduced pre-tax profit by 13.5% to 57.7 million shekels.
Segment performance varied: the import sector was the main growth driver with sales up 29.4% to 533 million shekels and segment profit rising 24% to 39.4 million shekels. The local market segment saw a 2.2% sales increase to 623 million shekels but a 5.6% profit decline to 25.4 million shekels. The manufacturing plants segment experienced the sharpest decline, with sales down 15% to 171 million shekels and segment profit plunging 44% to just 4.2 million shekels.
Alongside the earnings report, Netto Melinda announced an 18 million shekel dividend distribution, following dividends declared earlier in the first half of the year.
