Gad Dairy Boosts Q2 Profit 46% Thanks to Euro Weakness and Strategic Acquisition

Gad Dairy, controlled by Ezra Cohen, reported a significant profit increase in the second quarter of 2026, benefiting from the weakening of the euro, the main currency for its raw material purchases abroad. The euro's decline from 3.9 shekels in the second half of 2025 to 3.5 shekels in the second half of 2026 saved Gad 3.5 million shekels in raw material costs, enhancing the dairy's profitability. The company posted a net profit of 17 million shekels in Q2, a 46% rise compared to the same quarter last year, and declared a dividend payout of 30 million shekels.

Alongside the euro depreciation and a drop in the target milk price, Gad raised prices of regulated products by 1.05% in May, following an automatic mechanism set by the Finance Ministry to settle past state debts with dairies. The target milk price was reduced by 0.6% in March to 2.42 shekels per liter and further decreased by 5.15% in June. Due to these price and currency declines, Gad decided to forgo a planned 1.9% price increase on unregulated products in June. The target milk price directly affects dairy components like milk powder, cream, and butter, which constitute about 45% of Gad's annual raw material costs.

Another key development was Gad's completion of acquiring a 51% controlling stake in Weiler Farm for approximately 43 million shekels. Weiler became a subsidiary, contributing around 5 million shekels to Gad's revenues and net profit in Q2. Gad's revenues rose 9.9% in the quarter to 210 million shekels, with improvements in both retail and institutional sectors. According to StoreNext data, Gad's market share increased to 6.9% from 6.4% year-over-year.

The euro's depreciation improved Gad's gross profit margin to 30.5% of sales, up from 29.1% in the previous year’s quarter. The sales growth boosted gross profit by 15% to 64 million shekels and operating profit by 34.6% to 22.8 million shekels.