Shikun & Binui Boosts Net Profit and Credit Rating Following Energy Unit Sale

Shikun & Binui reported a significant rise in net profit and an improved credit rating after selling its energy subsidiary, Shikun & Binui Energy, to Generation Fund for 4.45 billion shekels. The company, controlled by Nati Saidoff and managed by Amit Birman, primarily operates in construction in Israel, with additional activities in the US, residential real estate development in Israel and Europe, franchising, and energy. The energy sector will now be under Generation's control following the sale agreement.

In the second quarter of 2026, Shikun & Binui sold its remaining construction operations in Nigeria, ceasing reporting on that segment. Despite a 4% revenue decline to 2.3 billion shekels and a sharp drop in gross profit by 67% to 150 million shekels, the company posted a 45% increase in net profit attributable to shareholders, reaching 141 million shekels. This improvement was mainly due to a 323 million shekel tax income from utilizing carry-forward losses linked to the expected profit from the energy unit sale. The company expects net cash flow from the deal to be between 2.7 and 2.9 billion shekels, with after-tax profit ranging from 1.6 to 1.9 billion shekels.

The transaction also significantly reduces Shikun & Binui's debt, which stood at 12.1 billion shekels at the end of June 2026, above the target of under 10 billion shekels. The company anticipates lowering debt to 5.9 billion shekels by Q3 2027, with 90% of the reduction attributed to the energy sale. Credit rating agency S&P Maalot responded by upgrading four of the company's unsecured bond series to A+.

In Israel's construction sector, revenues increased 17% year-over-year to 1.38 billion shekels, driven by progress on military and residential projects. The real estate development segment in Israel grew 43% to 311 million shekels. However, US construction revenues fell 25% to 382 million shekels due to project completion and a stronger shekel. European real estate sales also declined, impacting income and profits. Shikun & Binui sold 309 housing units in Israel during the quarter, a tenfold increase from the previous year, mostly under the "Price for Residents" program, with an average price of 1.46 million shekels per unit, down from 3.35 million shekels previously. The company's market value is 9.8 billion shekels, with its stock down 9% year-to-date while the TA-125 index rose 10%.