Azrieli Group (AZRG) Q2 2025 earnings summary

Executive summary

• Record Q2 NOI of NIS 648 million, up 17% year-over-year; net profit attributable to shareholders rose 105% to NIS 320 million.

• FFO excluding senior housing increased 7% to NIS 417 million; total FFO was NIS 425 million, down 1%.

• CEO Ron Avidan informed the chair and Board of his wish to step down for personal reasons; interim leadership was planned, pending shareholder approval.

• Data center expansion and office growth drove performance, while Operation Rising Lion weighed on retail and malls.

Financial highlights

• Same-property NOI rose 4% year-over-year to NIS 576 million.

• Q2 revenues reached NIS 949 million, up from NIS 781 million; H1 2025 revenues totaled NIS 1,887 million.

• H1 2025 net income rose 25% to NIS 777 million; basic EPS for Q2 was NIS 2.64, versus NIS 1.29.

• Comprehensive profit was NIS 258 million, down from NIS 413 million, impacted by currency translation losses.

• NIS 800 million dividend distributed in May 2025, equivalent to NIS 6.60 per share for 2024.

Outlook and guidance

• Development pipeline includes 10 projects totaling 687,000 sqm; NOI and FFO are expected to rise after development and lease-up.

• Frankfurt data center project expected to begin generating income in Q4 2026; German 36-MW capacity estimated to generate average annual NOI of ~€51 million, with a 50% share.

• Closing of the ZMH Hammerman merger was expected by the end of Q3 2025 after shareholder and Competition Commissioner approvals.

• Store sales for 2025, excluding war-impacted days, were expected to align with market averages.

• Macroeconomic forecasts indicated GDP growth of 3.3% in 2025 and 4.6% in 2026, with inflation moderating.