Effi Capital Real Estate published its financial reports for 2024, presenting a complex picture: The company sold 1,018 housing units during the year – an all-time record for the company – but gross profit and net profit actually declined compared to 2023.
According to the reports, net profit stood at approximately NIS 32 million, compared to about NIS 49 million in profit from ordinary activities. For comparison, in 2023 the gross profit totaled around NIS 103 million, while in 2024 it dropped to only NIS 77 million. The decrease, according to the company, stems from rising input costs, a shortage of manpower in the industry due to the “Swords of Iron” war – and from the fact that in five projects where significant sales were recorded, revenue recognition had not yet begun according to accounting rules.
Alongside this, Effi Capital reports a significant strengthening of its equity, which reached approximately NIS 495 million – a 28% increase compared to the end of 2023. This is due, among other things, to a successful stock issuance at the beginning of the year. Another prominent move made by the company after publishing the reports was the raising of approximately NIS 241 million through an unsecured bond issuance – a move that enabled it to repay an expensive debt of about NIS 133 million.
Urban Renewal and a Surge in Israel Land Authority Tenders
Effi Capital continues to expand its land reserves – and in 2024, it won land for the construction of 1,628 housing units as part of the Israel Land Authority’s “Target Price” tenders, with a total volume of NIS 637 million. These are projects expected to launch in Kfar Saba, Beit Shemesh, Kiryat Ata, and Kiryat Ekron.
In total, the company currently holds a portfolio of about 8,150 housing units at various stages (execution, marketing, planning, and urban renewal), alongside approximately 124,500 square meters of commercial, employment, storage, and logistics space.
In the field of urban renewal, the company reports 17 projects in which a majority of apartment owners have already been secured – allowing the process to begin advancing. Fifteen of them even have valid zoning plans, with a profit potential of about NIS 170 million (the company’s share).
"The Market Was Shaken – But We Knew How to Maneuver"
The company's CEO, Effi Shkedi, summarizes 2024: “It was a very challenging year, both on the national level in which the State of Israel had to deal with the Swords of Iron war that lasted throughout the entire year and had a direct and significant impact on the real estate sector in Israel, which is dealing with operational difficulties due to a shortage of workers in execution companies, rising labor and raw material costs, and the interest rate crisis which significantly increased financing costs for real estate companies in Israel. Since Effi Capital carries out all its projects with its own execution companies, we knew how to maneuver and minimize damage – but it can be seen that even for us, despite in-house execution, the war impacted the results. The company sold a record number of apartments, but the gross and net profit was lower compared to last year because the execution pace was lower than what characterizes us.”
“The company managed to carry out two important strategic moves in 2024. First, we went for a public stock issuance in order to strengthen the company's equity and cash flow, and second, we issued unsecured bonds for the first time at an attractive interest rate, which helped repay more expensive debts. Our goals for 2025 are to continue participating in Israel Land Authority tenders and expand our long-term land reserves, create strategic partnerships with strong partners, accelerate execution progress across all projects, and place significant focus and investment in the field of urban renewal,” he concludes.