Ashtrom Reports 78 Million Shekel Loss Amid Residential Real Estate Slowdown

Ashtrom Group, active in eight business sectors including contracting, industry, and residential development, reported a net loss of 78 million shekels in the second quarter of 2026. The company’s revenues rose 13% year-over-year to 1.3 billion shekels, driven mainly by its contracting sector, which accounts for 58% of quarterly revenues, and its industrial sector, contributing 26%. However, a decline in profitability and increased financing costs weighed heavily on results.

The contracting sector saw a 12% revenue increase to 727 million shekels but experienced a 21% drop in gross profit to 49 million shekels due to a shift in project mix toward lower-margin new projects and the completion of higher-margin projects from the previous year. The residential construction sector’s slowdown also negatively impacted earnings. Conversely, the industrial sector, considered a growth engine, posted a 21% revenue increase to 320 million shekels and a 50% rise in profitability to 54 million shekels, attributed to investments expanding production capacity.

In residential development, Ashtrom Homes (formerly Ashdar) increased revenues by 28% to 215 million shekels but saw profits decline by 25% to 29 million shekels, as sales prices did not keep pace with rising construction costs. The company sold 51 apartments this quarter compared to 63 in the same quarter last year. Earlier in June, Ashtrom signed a binding agreement with Migdal Insurance, which will invest 451 million shekels for a 20% stake in Ashtrom’s rental housing division, valuing the unit at 2.3 billion shekels. Ashtrom currently holds about 1,300 income-generating apartments and approximately 1,000 more under construction, with occupancy expected in 2028 and 2029.

In energy, Ashtrom operates a 400 MW solar project in Texas since late 2024 and recently began constructing an additional 195 MW project, expected to be completed next year. The company is traded at a market value of 6.2 billion shekels, with its stock down 19% year-to-date, underperforming the Tel Aviv Construction Index and the broader TA-125 Index.

Summary: Ashtrom Group reported a 78 million shekel loss in Q2 2026 due to a slowdown in residential real estate and higher financing costs, despite revenue growth driven by contracting and industrial sectors. The company also advanced its rental housing and renewable energy projects.

Points: - Ashtrom posted a 78 million shekel net loss in Q2 2026 despite 13% revenue growth. - Contracting sector revenues rose 12%, but gross profit fell 21% due to project mix changes. - Industrial sector revenues increased 21%, with profitability up 50% from capacity investments. - Residential development revenues grew 28%, but profits dropped 25% amid cost pressures. - Migdal Insurance agreed to invest 451 million shekels for 20% of Ashtrom’s rental housing arm. - Ashtrom operates large solar projects in Texas, expanding its renewable energy portfolio. - The company’s stock declined 19% this year, lagging the Tel Aviv Construction Index.

Topic: economy israel_relevant: true entities: {"people":[],"organizations":["Ashtrom Group","Ashtrom Homes","Migdal Insurance"],"places":["Israel","Texas"]}