Ashtrom Group Reports 115 Million Shekel Loss Amid Housing Market Slowdown
Ashtrom Group announced a net loss of 115 million shekels in the first half of 2026, with investors reacting sharply as the company's stock dropped 5.5%, falling over 23% since the start of the year. The losses were mainly driven by heavy financing costs and operational deficits in two key sectors: rental housing and franchising. While other sectors like construction and infrastructure saw declining profit margins, they remained profitable.
The rental housing sector generated a gross profit of 53 million shekels but still recorded a segment loss of 7 million shekels. The company is actively seeking partners to support this segment. The franchising sector, involved in national infrastructure and energy projects, posted a 3 million shekel loss despite a 5% revenue increase to 1.35 billion shekels. Profit margins in this sector dropped from about 10% last year to 7% in the first half of 2026, partly due to new project startups and challenges related to the ongoing war.
Ashtrom's residential division reported revenues of 215 million shekels and a segment profit of 23 million shekels in Q2, but profit margins fell sharply from 24% in Q2 2025 to 14% this year. The company sold 52 apartments across 21 projects nationwide, with very low sales in flagship projects such as those on Einstein Street, Alterman Street, and in Ramat Gan.
Oren Nosbaum, Ashtrom's deputy CEO and controlling shareholder, attributed the reduced profits to rising construction costs and stagnant sales prices. He expressed optimism about a market recovery in 2027, highlighting the company's preparation with approximately 4,300 housing units ready for marketing, expected to generate 14 billion shekels in revenue and 2.4 billion shekels in gross profit in the coming years.
Nosbaum predicted a significant market rebound by late 2026 or early 2027, fueled by continued interest rate cuts and political stabilization following upcoming elections. He emphasized confidence in renewed growth and demand in Israel’s housing sector moving forward.
