Carasso Motors published its second-quarter report. Turnover of more than two billion shekels produces net profit of NIS 42 million, and the reason for that sits in the balance sheet rather than in the income statement.
Errors or inaccuracies are possible. Spotted something that looks wrong? Write to me and I will correct it.
The Quarter
| NIS millions | The quarter | Share of revenue |
|---|---|---|
| Revenue | 2,127.3 | |
| Gross profit | 363.2 | 17.1% |
| Operating profit | 120.8 | 5.7% |
| Pre-tax profit | 68.1 | 3.2% |
| Net profit | 42.0 | 2.0% |
| Basic earnings per share | NIS 0.44 | |
| Balance sheet total | 12,154.5 | |
| Shareholders' equity | 2,325.3 |
The Balance Sheet Is the Story
NIS 12.2 billion of assets, on quarterly turnover of NIS 2.13 billion and equity of NIS 2.33 billion.
And that is not a ratio you see at an importer that only sells.
Importing and selling vehicles, in themselves, is not a balance-sheet-heavy business. Inventory, receivables, and sales sites - and that is roughly all of it.
A balance sheet 5.2 times equity points to something else entirely: leasing and finance. A company that leases out vehicles holds its fleet as an asset and funds it with debt. A company that extends credit for vehicle purchases holds a loan book.
And in both cases the balance sheet grows much faster than turnover - which is exactly the picture here.
The meaning for the reader: Carasso Motors is not only an importer. A substantial part of its balance sheet behaves like that of a finance company, and its profit is as sensitive to the cost of debt as it is to the number of vehicles sold.
And That Is What Shows Below the Operating Line
From NIS 120.8 million of operating profit, NIS 68.1 million was left before tax.
NIS 52.7 million was taken out - 43.6% of operating profit.
That is the price of that balance sheet. A leased fleet and a credit book require debt, and the interest on it falls below the operating line.
So a change in interest rates touches a company like this twice: once through demand for vehicles, and once through the funding cost of its own balance sheet.
Margin Survival: Only a Third
| Gross margin | 17.1% |
| Operating margin | 5.7% |
| Survival | about 33% |
And here the comparison across this week is illuminating.
| Q2 2026 | Gross margin | Operating margin | Survival |
|---|---|---|---|
| Ashdod Refinery | 10.0% | 9.3% | 94% |
| Castro | 63.6% | 17.4% | 27% |
| Carasso Motors | 17.1% | 5.7% | 33% |
Three companies, three completely different structures.
And what the table shows is that the gross margin on its own says almost nothing. Ashdod, with the lowest gross margin, reaches the operating line with the highest.
At Carasso, two thirds of the gross margin disappears along the way. In a business of distributed sales, service and garages - that is the cost of operating, and it is largely fixed.
And the Tax: 38.3%
NIS 68.1 million before tax, NIS 42.0 million after - that is, tax of NIS 26.1 million, an effective rate of 38.3%.
That is 15 percentage points above Israel's corporate rate.
The structured filing does not detail the tax reconciliation, so I do not assert its source. What can be said: had the rate been 23%, net profit would have been about NIS 52.4 million rather than 42.0 - a gap of roughly NIS 10.4 million in the quarter.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
What interests me in this report is how little remains of NIS 2.13 billion.
Of every hundred shekels that came in, two reached the bottom line. And that is not a sign of a bad business - it is the structure of the vehicle import sector, where turnover is large, the margin is thin, and profit is built from volume.
But in a business like that, the margin for error is very small. When the net margin is 2%, a two-percentage-point fall in the gross margin erases most of the profit - and that can happen through a move in the exchange rate, in vehicle taxation or in model mix, without the company doing anything at all.
And the central point I hold is that Carasso Motors is not one business but two: a vehicle importer, and a finance operation. A balance sheet of NIS 12.2 billion against turnover of NIS 2.13 billion says that plainly.
So what I would look for in the full accounts is the split between the two - how much of operating profit comes from selling vehicles and how much from leasing and credit. The two businesses behave entirely differently through a rate cycle, and in the structured filing they appear as a single line.
(It is important to stress: this is my personal opinion only, and nothing herein constitutes a recommendation to take any action.)
