Arit Industries Plans Unusual 530 Million Shekel Dividend Despite Weaker Quarter

Arit Industries, a manufacturer of mortars and military equipment, reported a significant decline in its second-quarter revenues and net profit compared to last year but announced plans to distribute an exceptional dividend of approximately 530 million shekels to shareholders. The dividend payout partly stems from profits made on the sale of shares in its subsidiary, Reshef Technologies, last year.

In the second quarter, Arit's revenues fell by about 36% year-over-year to 56.3 million shekels, partly due to shipment delays caused by external transport issues that postponed deliveries worth 11.9 million shekels to the third quarter. For the first half of the year, revenues totaled around 133 million shekels, down 14% from the same period in 2025. Net profit plunged 85% in the quarter to 9.7 million shekels and declined 45% to 52.4 million shekels for the half-year. The company attributed the profit drop mainly to unrealized losses of 25.5 million shekels on securities investments, which have since reversed due to an increase in the value of its securities portfolio.

Looking ahead, Arit forecasts 2026 revenues of about 340 million shekels, a 42% decrease from 2025. As of the end of Q2, the company had accumulated orders worth approximately 671.8 million shekels, including a conditional order of about 50 million dollars. The planned dividend includes an immediate payment of 317.4 million shekels next month, with the remaining 211.6 million shekels contingent on court approval related to the profit distribution from the sale of 11% of Reshef shares at the end of 2025. This follows an earlier dividend distribution of about 104 million shekels this year.

CEO Haim Shtapler highlighted recent strategic moves, including acquiring land for a large manufacturing plant in the U.S., obtaining key export licenses, signing a memorandum of understanding in Eastern Europe, and expanding operations in India. He emphasized the upcoming completion of a mortar for infantry units expected in Q4, which will open significant international markets with exceptional business potential.

Arit operates mainly through Reshef Technologies, developing and marketing mortars, artillery, and weapons systems for the defense sector. Despite a more than 1,000% surge in its stock price over the past three years, the share has lost over 50% of its value since the start of the year and currently trades at a market capitalization of about 2.1 billion shekels.