Hamat Construction Products Reports Significant Losses Due to Turkish Operations Closure
Construction products company Hamat reported a net loss of approximately 11.2 million shekels in the second quarter of the year, largely attributed to the cessation of operations by its unprofitable subsidiary in Turkey. While Hamat's revenues remained stable at around 220 million shekels for the quarter, the closure of its Turkish sanitary ware manufacturing subsidiary, MCP, resulted in substantial financial setbacks.
The decision to close the Turkish operation in June stemmed from MCP's ongoing losses, which Hamat explained were due to low demand for its products and difficulties in marketing them within Turkey and internationally. In the first half of the year, the Turkish operation generated only about 2.3 million shekels in revenue but incurred losses of nearly 28 million shekels. This figure includes a 9.2 million shekel loss from asset impairment and an 11.7 million shekel expense related to the reclassification of translation differences accumulated from the operation.
Hamat is now seeking to sell its assets in Turkey, including the subsidiary's factory, land, machinery, and equipment, estimating a recovery of approximately 56.5 million shekels. The company acknowledges that further provisions may be necessary if the assets cannot be sold at the estimated value, though a higher sale price is also possible.
Additionally, Hamat reassessed the value of its Ziv Kitchens division, acquired in 2022, due to weaker-than-expected results. However, external appraisers valued the recoverable assets at about 110 million shekels, exceeding their book value of 82 million shekels.
Looking ahead, Hamat's order backlog for ceramic and sanitary ware retail stands at approximately 252 million shekels, a slight decrease of 2% from the end of 2025. The kitchen division's backlog also saw a minor reduction, standing at about 90 million shekels, down 5% from the previous year. Hamat's stock has fallen about 18% since the beginning of the year, with the company currently valued at approximately 1.4 billion shekels.
