Israel’s national water company Mekorot reported a sharp increase in net profit in the second quarter of 2026, although results for the first half of the year continued to reflect the impact of regulatory changes that took effect at the beginning of the year.
Mekorot’s net profit reached approximately NIS 243 million in the second quarter, compared with approximately NIS 62 million in the same quarter last year. The increase was partly attributed to a positive accounting effect from the revaluation of fixed assets following a decline in interest rates and its impact on the discount rate used to value the company’s assets.
For the first half of 2026, however, net profit stood at approximately NIS 110 million, compared with approximately NIS 244 million in the corresponding period last year.
The company said the first-half results continued to reflect regulatory changes approved at the end of 2025 and implemented at the start of 2026. The changes altered Mekorot’s operating model, including the return recognized by the company and the way its fixed assets are accounted for.
As a result, Mekorot recorded a net decline in the value of its assets of approximately NIS 83 million during the first half of 2026. This follows a decline of approximately NIS 1.4 billion recorded in the company’s 2025 financial statements.
Revenue remains largely unchanged
Mekorot’s revenue in the second quarter totaled approximately NIS 1.43 billion, compared with approximately NIS 1.44 billion in the corresponding quarter last year. The slight decline was attributed, among other factors, to a decrease in the volume of water sales.
Water consumption for agriculture fell by approximately 9.5% during the first half of the year, which the company attributed to the rainy winter, including rainfall in March.
Despite the largely stable revenue, operating profit increased to approximately NIS 138 million in the second quarter, compared with NIS 99 million in the same period last year.
EBITDA also rose by approximately 16%, reaching approximately NIS 447 million, compared with approximately NIS 387 million in the second quarter of 2025.
NIS 851 million invested in infrastructure
During the first half of 2026, Mekorot invested approximately NIS 851 million in the construction, renewal and development of water facilities and infrastructure across Israel.
The company said it remains on track with its annual development program, which has a total scope of approximately NIS 1.6 billion.
At the same time, the total liabilities of the water sector to Mekorot, recorded as deferred regulatory accounts, increased by approximately 65% over the past year to approximately NIS 2.1 billion.
The company’s leverage ratio also increased, reaching 71.5%, compared with 65.8% in the corresponding period last year.
Cash flow from operating activities during the first half of 2026 totaled approximately NIS 113 million, down from approximately NIS 325 million in the corresponding period last year.