El Al Israel Airlines (TASE: ELAL) has notified the Tel Aviv Stock Exchange (TASE) that it has received state approval to resume distributing dividends to investors in 2025, one year earlier that the agreement it signed with the state during the Covid pandemic.
However, El Al will not be able to distribute dividends on the record profits it earned in 2023-2024. In 2024, due to the war, which made it the dominant airline in Israel's skies, as foreign carriers stopped flying to Israel, especially on the profitable routes to the US, El Al reported record profits of $545 million, an almost five-fold jump from 2023, on record revenue of $3.4 billion, up 37% from 2023, which was itself a record.
Distributing the profits
El Al has now announced that it will be able to distribute up to 30% of net profit in 2025 and up to 40% in 2026-2028. After that, there will be no more restrictions on dividend distribution.
El Al also stresses that the state agreed to amend the agreement (cancelation of the dividend restriction clause), after El Al "completed repayment of all loans the state provided to the company, totaling $45 million, in the fourth quarter of 2021."
El Al also notes that as of today, "No decision has been made about distribution of a dividend for the 2025 profits, and if such a decision is made, it will be published in a proper manner."
In January, "Globes" revealed that the state and El Al had agreed a deal in which the airline would increase its share of security expenses and in return, the state would allow the company to bring forward distribution of the dividend by a year, due to the unprecedented boost in the company's business. The state pays 97% of the airline's security expenses.
According to the original agreement between the state and the company, following the Covid pandemic, it could not distribute a dividend at all until the end of 2025, and then could only distribute 30% of its profits until the end of 2028.
El Al market cap has become the 14th most valuable on the TASE
Last month, as part of the deal for state approval, El Al announced that it would increase its share of security costs on its flights by $5 million to $10 million per year, so that the state will bear 95% of security expenses in the coming year and drop to 29.5% by 2029 (compared with 97% of the company's security expenses today).
In the past three years, El Al's stock has jumped by almost 270% and is currently trading at a value of NIS 5.4 billion. The jump in the stock has made El Al the 14th largest company in terms of market cap of stocks listed on the Tel Aviv 90 index.
Published by Globes, Israel business news - en.globes.co.il - on April 14, 2025.
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