Neto Malinda published its second-quarter report. It is read alongside another report filed the same day, and both state exactly the same revenue.
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The Quarter
| NIS millions | The quarter | Share of revenue |
|---|---|---|
| Revenue | 1,327.6 | |
| Gross profit | 173.0 | 13.0% |
| Operating profit | 69.0 | 5.2% |
| Pre-tax profit | 57.7 | 4.3% |
| Net profit | 44.3 | 3.3% |
| Attributable to shareholders | 43.4 | |
| Non-controlling interests | 0.9 | |
| Basic earnings per share | NIS 2.19 | |
| Balance sheet total | 2,422.9 | |
| Shareholders' equity | 1,600.2 |
The Report That Is Read in Pairs
On the same day Neto Holdings also filed a quarterly report, and its revenue line is identical: NIS 1,327.6 million.
| Q2 2026 | Neto Malinda | Neto Holdings |
|---|---|---|
| Revenue | 1,327.6 | 1,327.6 |
| Gross profit | 173.0 | 172.9 |
| Operating profit | 69.0 | 71.9 |
| Net profit | 44.3 | 44.2 |
| Attributable to shareholders | 43.4 | 19.6 |
| Share reaching shareholders | 98.1% | 44.2% |
| Earnings per share | NIS 2.19 | NIS 5.86 |
And this comparison explains both reports together.
Neto Malinda is the operating company, and so almost all of its profit - 98.1% - reaches its shareholders. The minority share is negligible: NIS 0.9 million.
Neto Holdings holds a stake in it, and therefore consolidates the full results but sets aside 55.8% of the profit for partners. Its own shareholders are left with NIS 19.6 million of exactly the same profit.
The meaning for the reader: the same activity, two listed companies, and two materially different outcomes for the shareholder - according to how far they sit from the activity.
And that is why "net profit" is a meaningless figure for comparing the two. Both recorded about NIS 44 million. Only the line beneath it says whose it is.
And Why Earnings Per Share Is Higher at the Parent
Neto Holdings shows earnings per share of NIS 5.86, and Neto Malinda NIS 2.19 - a factor of 2.7 in the parent's favour, even though its shareholders receive less than half the profit.
And that looks contradictory until you break the calculation apart.
Earnings per share is profit attributable to shareholders, divided by the number of shares. Both variables differ between the two companies.
So higher earnings per share does not mean the company is more profitable - it can simply reflect a smaller share count.
This is one reason I do not compare companies by earnings per share. The figure depends on capital structure, and capital structure is a company decision rather than a result of the business. For comparing two companies, ratios like margin and return on equity say far more.
The Rest of the Report
From NIS 69.0 million of operating profit, NIS 57.7 million was left before tax - NIS 11.3 million was taken out, 16.4% of operating profit. A low share, consistent with balance-sheet leverage of 1.5 to one - NIS 2,422.9 million of assets against equity of NIS 1,600.2 million.
The effective tax rate, 23.2%, is almost identical to Israel's corporate rate.
And the gross margin, 13.0%, is characteristic of food distribution: large turnover, thin margins, and profit built from volume. For comparison, Castro in fashion retail showed 63.6% yesterday - ostensibly the same kind of business, an entirely different economic structure.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
Of the two companies, this is the simpler one to read - and that is precisely the point.
Neto Malinda shows what happens in the business: NIS 1,327.6 million of revenue, a 13.0% gross margin, 5.2% operating, and 98% of the profit reaching shareholders. There is no layer between the activity and the investor.
And what I take from this pair is that when a group trades at two levels, the operating level is the one whose accounts describe the business, and the level above it describes how ownership of that business is divided. Two different things, both legitimate - provided they are read as what they are.
And what I would look for in the full accounts is a revenue breakdown: food distribution is a business of segments - own brands against distribution for others, retail against institutional - and each carries a different margin. A blended margin of 13.0% is an average of different things.
(It is important to stress: this is my personal opinion only, and nothing herein constitutes a recommendation to take any action.)
