El Al Israel Airways (TASE: ELAL) has turn into one of the crucial worthwhile listed corporations in Israel prior to now few years, due to its dominance at Ben Gurion Airport and its worthwhile routes to North America. Final 12 months, El Al posted a document revenue of $541 million, following a revenue of $113 million in 2023. The pattern continued within the first half of 2025, with a revenue of $155 million; in accordance with the corporate’s estimate, have been it not for the struggle with Iran, the quantity would have been $100 million increased. The present quarter can also be anticipated to be sturdy.
Regardless of the excessive income, El Al remains to be not paying tax. In actual fact, “Globes” has discovered that the corporate has paid no tax because it was privatized in 2003.
The rationale for that is the corporate’s heavy cumulative losses from earlier durations, mainly from the Covid pandemic interval in 2021-2022, when it was on the purpose of collapse and needed to acquire monetary support from the state. The help consisted of lots of of tens of millions of {dollars} in loans, alongside an injection of capital by Kenny Rozenberg, who turned the controlling shareholder at the moment. El Al’s losses in these two years amounted to about $1 billion, on prime of losses of about $250 million from earlier years.
Near protecting the loss
Since then, nonetheless, the skies have cleared for El Al. The outbreak of the Swords of Iron struggle and the abandonment of Israel by international airways, excessive fares, and intensive streamlining, haven’t solely led to income such because it has by no means seen earlier than, but additionally to reimbursement of the state loans. The following step is to begin distributing dividends of 30% of its income, a transfer that the state authorised earlier this 12 months.
And what about paying tax? El Al states in its most up-to-date financials that it is just $11 million away from protecting the large loss from the pandemic interval. This doesn’t imply, nonetheless, that it’ll begin paying taxes quickly. In its quarterly financials El Al doesn’t specify the present measurement of its tax defend, however in its annual report for 2024 it talked about tax losses of $166 million.
Since El Al is liable to pay corporations tax on the common fee of 23%, on the premise of the year-end determine, it nonetheless wants to acknowledge income of $722 million earlier than it begins paying tax, of which it has acknowledged over $160 million in 2025 up to now, which leaves about $567 million that it must earn to achieve the tax threshold.
Regardless of its tax losses, El Al can distribute dividends. It is because the Firms Legislation (part 302) states that an organization might make a distribution of “a revenue stability or income accrued within the final two years, whichever is the bigger.” An extra criterion is that “there isn’t any cheap suspicion that the distribution will preserve the corporate from assembly its present and anticipated obligations after they fall due.”
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“There two take a look at: revenue, and solvency,” explains Adv. Leor Nouman of S. Horowitz & Co. “The concept is to permit a distribution of income by corporations that which have cumulative losses from a few years prior to now, however are presently worthwhile and might meet the revenue criterion and likewise pay their collectors.”
As talked about, El Al is managed by Kennny Rozenberg, who has invested some NIS 840 million within the firm since he took it over. El Al’s share value has risen by 380% prior to now three years, giving the corporate a market cap of NIS 7.7 billion, in order that his shares are presently price NIS 3.5 billion, giving a web acquire on paper of NIS 2.7 billion.
Revealed by Globes, Israel enterprise information – en.globes.co.il – on September 2, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.
