Y.H. Dimri published its second-quarter report. One ratio in it stands out against everything we read this week.
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 | 398.9 | |
| Gross profit | 129.7 | 32.5% |
| Operating profit | 105.0 | 26.3% |
| Pre-tax profit | 78.7 | 19.7% |
| Net profit | 63.8 | 16.0% |
| Attributable to shareholders | 63.8 | |
| Basic earnings per share | NIS 2.79 | |
| Balance sheet total | 10,083.3 | |
| Shareholders' equity | 4,163.6 |
The Ratio That Stands Out: 81% Survival
From NIS 129.7 million of gross profit, NIS 105.0 million of operating profit was left. Only NIS 24.8 million was taken out.
That is, about 81% of the gross margin survives to the operating line.
And that is among the highest we saw this week - and among the highest in any sector that sells something to an end customer.
| Q2 2026 | Gross margin | Operating margin | Survival |
|---|---|---|---|
| Ashdod Refinery | 10.0% | 9.3% | 94% |
| Dimri | 32.5% | 26.3% | 81% |
| Carasso Motors | 17.1% | 5.7% | 33% |
| Electra Consumer | 29.7% | 4.9% | 16% |
Only a refinery sits above Dimri in this table - and there the explanation is entirely different: a single facility with no distribution network and no headcount that grows with turnover.
And here too the explanation is structural rather than managerial.
In residential construction, almost all the cost sits in the project itself - land, materials, subcontractors, construction finance - and all of it is above the gross line.
What remains beneath it is head office and the sales operation, and they are small relative to turnover. There is no branch network, no logistics for thousands of items, and no after-sales service running for years.
The conclusion: at Dimri, the gross margin is almost the operating profit. And at Electra Consumer, which starts from a similar gross margin, a sixth of it remains. The same figure on one line, an entirely opposite business structure.
And the Balance Sheet: 25 Times Revenue
| Balance sheet total | NIS 10,083.3 million |
| Shareholders' equity | NIS 4,163.6 million |
| Leverage ratio | 2.4 to one |
NIS 10.1 billion of assets on quarterly revenue of NIS 398.9 million.
And that ratio looks extraordinary until you understand what sits on a developer's balance sheet.
Most of the assets here are not equipment or buildings - they are inventory: land acquired, projects under construction, and completed homes not yet handed over. They accumulate on the balance sheet for years before becoming revenue.
And revenue recognition arrives only at a late stage - by percentage of completion or on handover, depending on the contract.
The practical meaning: at a developer, the balance sheet tells you about the future and revenue tells you about the past. A weak revenue quarter can reflect nothing more than the handover schedule, rather than actual sales.
So leverage of 2.4 to one at a developer is not like leverage of 2.4 at an operating company. Here it is largely the financing of inventory intended to be sold.
And Financing and Tax
From NIS 105.0 million of operating profit, NIS 78.7 million was left before tax - NIS 26.3 million was taken out, which is 25.1%.
A moderate share, consistent with relatively low leverage.
And the effective tax rate is 18.9% - below Israel's corporate rate of 23%. The structured filing does not detail the tax reconciliation, so I do not assert its source.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
What I take from this report is the comparison, not the figures.
Dimri and Electra Consumer filed on the same day, both with a gross margin around 30% - and one reaches the operating line with 26.3% and the other with 4.9%. That is the whole difference between selling a product somebody else made and making the product yourself.
And the central point I hold is that in residential construction, profit is determined at the land-acquisition stage, years before it is recorded. This quarter reports on decisions taken five years ago, not on what is happening in the market today.
So a single quarter teaches less here than in any other sector. What teaches is the inventory: NIS 10.1 billion of assets is the figure that describes the coming quarters.
And what I would look for in the full accounts is the number of units sold and not yet handed over, and the average price per unit. That backlog, not revenue, is what decides.
(It is important to stress: this is my personal opinion only, and nothing herein constitutes a recommendation to take any action.)
