Iron Dome and Iron Beam maker Rafael sees 39% jump in new orders, reaching NIS 6.9 billion
Yoav Turgeman sharply criticizes the Finance Ministry over delayed payments to the company, warning that Rafael is being forced to take out loans to meet its obligations to suppliers.
Rafael CEO Yoav Turgeman is sharply criticizing the Finance Ministry over the state's delay in payments to defense companies. Over the past year, the Defense Ministry has accumulated a debt of approximately NIS 15.5 billion to Rafael, Israel Aerospace Industries, and Elbit Systems for contracts and orders already approved, of which approximately NIS 7 billion is owed to Rafael.
"The Finance Ministry represents the state budget, and in the past approved the signing of contracts with us but is not paying on them — and in my opinion, is in violation of the agreement and in violation of the law," Turgeman said in a conversation with Calcalist.
"We have hundreds of suppliers all across the country, most of them from the north, and we make every effort to pay them on time, even though I'm not receiving money from the state," Turgeman added. "In the meantime, we get empathy from the Finance Ministry but not solutions. This is a matter that requires an urgent solution, and it's appropriate for the finance minister to get involved too. The State of Israel is our biggest customer, and when it doesn't pay us, we're forced to take out loans."
Turgeman further said that despite the debt continuing, government ministries are in talks with the defense industries over compensation mechanisms, which also include financing the debt at a cost of about NIS 1 billion a year.
Meanwhile, the continuation of strong demand for weapons from the IDF and from many other armies around the world continues to drive the activity of the state-owned company Rafael, which is closing out the second quarter of 2026 with sales of approximately NIS 5.68 billion, an increase of 20% compared to sales of approximately NIS 4.7 billion in the corresponding quarter last year.
The volume of new orders that came in to Rafael during the quarter totaled NIS 6.92 billion, an increase of 39% compared to the corresponding period. Its order backlog totaled NIS 75.8 billion at the end of June, compared to an order backlog of NIS 65.8 billion in the corresponding period last year, reflecting an increase of 15%.
In the first half of the year, Rafael's sales totaled approximately NIS 10.6 billion, an increase of 13.6% compared to sales of NIS 9.36 billion in the first half of 2025. New orders received totaled more than NIS 15 billion, a jump of 33% relative to the orders received in the corresponding period, which totaled approximately NIS 11.3 billion.
The data further shows that Rafael's net profit for the half totaled NIS 663 million, an increase of approximately 8% compared to net profit of NIS 612 million posted in the corresponding half. A calculation based on the half-year and first-quarter figures shows that net profit in the second quarter alone totaled approximately NIS 329 million, compared to approximately NIS 340 million in the second quarter of 2025. As a result, the net profit margin on sales for the quarter fell from approximately 7.2% last year to approximately 5.8% this year.
Rafael attributes the continued growth in its activity to the continuation of high demand for the systems it develops and manufactures for the IDF and the defense establishment, and for its customers around the world. Among the notable deals it has recently reported is the mega-deal with Romania, under which it will supply the Spyder-type air defense system, in a total amount of approximately 2 billion euros. The deal is considered one of the largest defense deals in Israel's history.
Rafael's Spyder deal with the Romanian Ministry of Defense was signed approximately two months ago, and the company is expected to supply the air defense systems over the next three years. These deliveries include a large number of air defense batteries of this type, but the company did not detail the quantity. The deal includes launchers, interceptor missiles, radar systems, and training and logistical support arrangements for the forces that will operate the defense systems.
Tomorrow, another mega-deal will be signed in Israel, worth approximately 3.6 billion euros, for the supply of air defense systems to Greece as part of its procurement program "Achilles Shield." Under this program, the Israeli defense companies, chief among them IAI [Israel Aerospace Industries] and Rafael, will supply Greece with air defense systems that will establish its multi-layered air defense array.
The business results Rafael presented for the second quarter and the first half of the year join strong results that the two other large defense companies also published in recent weeks. Elbit Systems ended the second quarter with revenue of $2.29 billion, an increase of 16% compared to the corresponding quarter, and net profit of $173.6 million, a jump of 38%. Its order backlog reached a record $32 billion. Israel Aerospace Industries reported quarterly sales of approximately $2.20 billion, an increase of 35%, and net profit of $229 million, a jump of 47%. IAI's order backlog reached a record $35 billion — alongside a shift to a negative cash flow of hundreds of millions of dollars, due in part to delays in Defense Ministry payments.
