Lesico (LSCO) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 2025 grew 22.7% year-over-year to ₪243.9 million, driven by increased activity in Israel and abroad.

• Net income attributable to shareholders was ₪20.5 million, up sharply from ₪0.8 million in Q1 2024.

• Gross margin declined to 7.4% from 8.0% year-over-year, mainly due to lower profitability in the construction segment in Israel and increased losses abroad.

• The company maintains a strong liquidity position with cash and equivalents of ₪86.0 million as of March 31, 2025.

Financial highlights

• Operating profit rose to ₪28.8 million from ₪1.5 million in Q1 2024.

• EBITDA for the quarter was ₪40.9 million, compared to ₪4.8 million a year earlier.

• Net cash from operating activities was negative at ₪(51.3) million, reflecting working capital changes.

• Total assets stood at ₪679.5 million, with equity attributable to shareholders at ₪224.0 million.

Outlook and guidance

• Management expects continued uncertainty and potential slowdown in project execution due to the ongoing Iron Swords war and macroeconomic conditions.

• Despite challenges, the company sees potential for increased infrastructure demand post-war, supported by new government tenders.

• Inflation and interest rate trends are not expected to materially impact results, as most debt is not CPI-linked and subcontractor costs are typically back-to-back with revenues.