The plowing neighborhood pushed Shafir to the highest net profit in its history

Shafir Engineering, controlled by the Shapira family (60.4%), concludes 2020 with a line of net profit that crosses the NIS 300 million threshold for the first time. The net profit of the infrastructure and construction company, which was put on the list of centralized entities in the economy this month, increased by 13% and amounted to NIS 328 million, compared with a net profit of NIS 291 million in 2019. Accordingly, and according to its policy, the company decided to distribute a dividend of NIS 70 million to shareholders.

To a large extent, the project responsible for the peak results is a “team” project that Shafir Engineering is building in plowing. This is a project in which the company is building an entire neighborhood from scratch in the city, with 1,500 apartments (900 of which are being built as part of a price-per-tenant program), as well as its infrastructure and public institutions.

Shafir Engineering won a tender from the Israel Land Authority for the construction of the Harish neighborhood in December 2017, and it is required to complete the project within 40 months, which are currently being completed. Despite the commitment, so far, the company has completed 78% of the project, which is expected to yield it NIS 1.4 billion in total.

Thanks to this project, as well as another project in Modi’in, the company’s revenues from the residential real estate sector jumped by almost 90% and stood at NIS 693 million, compared to revenues of NIS 366 million in 2019. Which also include industry, infrastructure and franchising.

The residential real estate sector led the increase in revenues, but there was also an improvement in the infrastructure and manufacturing sectors, so that the company’s revenues increased by 19% and amounted to NIS 3.4 billion in 2020. In absolute amounts, this is an increase of NIS 559 million, 60% of this amount comes from an increase in the residential real estate sector.

In 2020, Shafir Engineering sold 645 apartments, an increase of 42% compared to 2019, when the company sold 454 apartments. Most of the apartments sold, 404 apartments, were sold plowing. This is a decrease compared to 2019, when the company sold 578 apartments in Harish.

The decrease in the number of apartments sold plowing in 2020 by Shafir Engineering does not affect the company’s financial results, because according to international accounting standards, income in the residential industry must be recognized according to the progress of construction.

In addition, plowing reports indicate that there is a trend of price increases. In 2019 and the first quarter of 2020, the average price per square meter in plowing was NIS 8,200, reflecting a price of NIS 880,000 (before VAT) for a typical apartment; while in the quarter Fourth, the average price per square meter was NIS 9,400, which reflects a price of more than NIS 1 million (before VAT) for a typical-sized apartment.

Shafir Engineering Chairman Yehuda Segev told Calcalist that “thanks to the traffic restrictions imposed following the Corona epidemic, infrastructure projects were promoted at a relatively rapid pace, and this had a positive effect on the industry that supplies the raw materials.”