| Financial Instruments |
Note 7 - Financial Instruments
Fair value
| (1) | Financial instruments - the composition of the derivatives |
| | |
June 30,
2025 | | |
December 31,
2024 | |
| | |
€ in thousands | |
| Derivatives presented under current assets | |
| | |
| |
| Forward | |
| 442 | | |
| - | |
| Swap contracts | |
| 98 | | |
| 146 | |
| Financial power swap | |
| 98 | | |
| - | |
| | |
| 638 | | |
| 146 | |
| | |
| | | |
| | |
| Derivatives presented under non-current assets | |
| | | |
| | |
| Swap contracts | |
| 760 | | |
| 716 | |
| Financial power swap | |
| 14,163 | | |
| 15,258 | |
| | |
| 14,923 | | |
| 15,974 | |
| | |
| | | |
| | |
| Derivatives presented under current liabilities | |
| | | |
| | |
| Forward | |
| - | | |
| (1 | ) |
| Swap contracts | |
| (41 | ) | |
| (43 | ) |
| Financial power swap | |
| - | | |
| (1,831 | ) |
| | |
| (41 | ) | |
| (1,875 | ) |
| | |
| | | |
| | |
| Derivatives presented under non-current liabilities | |
| | | |
| | |
| Swap contracts | |
| (171 | ) | |
| (288 | ) |
| (2) | Fair values versus carrying amounts |
The carrying amounts of certain financial
assets and liabilities, including cash and cash equivalents, trade receivables, other receivables, other short-term investments, deposits,
derivatives, bank overdraft, short-term loans and borrowings, trade payables and other payables are the same or proximate to their fair
value.
The fair values of the other financial
assets and liabilities, together with the carrying amounts shown in the statement of financial position, are as follows:
| | | June 30, 2025 | | | | | | | Fair value | | | | | | | | | Carrying
amount | | | Level 1 | | | Level 2 | | | Level 3 | | | Valuation
techniques
for
determining fair
value | | Inputs used to
determine fair
value | | | | € in thousands | | | | | | | Non-current liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | Debentures | | | 202,144 | | | | 157,279 | | | | - | | | | - | | | | | Market price | | Loans from banks and others (including current maturities) | | | 321,112 | | | | - | | | | 296,293 | | | | - | | | Discounting future cash flows by the market interest rate on the date of measurement. | | Discount rate of Euribor+ 2%-2.5% with a zero floor, fixed rate for several years 3.1%-6% Linkage to Euribor, 2.75%-4.78% Linkage to Consumer price index in Israel, Floating interest rate based on the Bank of Israel Rate plus a spread of 4.35%, fixed rate of 2.58%-5.5%, Euribor+ 5.27% and 7% Linkage to Consumer price index in Israel. | | | | | 523,256 | | | | 157,279 | | | | 296,293 | | | | - | | | | | |
| (3) | Fair value hierarchy of financial instruments measured at
fair value |
The table below presents an analysis
of financial instruments measured at fair value on the temporal basis using valuation methodology in accordance with hierarchy fair value
levels. The various levels are defined as follows:
| ● | Level 1: quoted prices (unadjusted) in active markets for identical instruments. |
| ● | Level 2: inputs other than quoted prices included within Level 1 that are observable, either directly
or indirectly. |
| ● | Level 3: inputs that are not based on observable market data (unobservable inputs). |
| | | June 30, 2025 | | | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | | Valuation techniques for | | | | € in thousands | | | determining fair value | | Warrants | | | (844 | ) | | | (1,032 | ) | | | - | | | | (1,876 | ) | | Level 1 - Fair value is measured at trade market.
Level 2 - Fair value is measured by using the binomial option pricing model. | | Swap contracts | | | - | | | | 646 | | | | - | | | | 646 | | | Fair value is measured by discounting the future cash flows, over the period of the contract and using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks. | | Forward contracts | | | - | | | | 442 | | | | - | | | | 442 | | | Fair value is measured on the basis of discounting the difference between the forward price in the contract and the current forward price for the residual period until redemption using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks. | | Financial power swap | | | - | | | | - | | | | 14,261 | | | | 14,261 | | | Fair value is measured by discounting the future fixed and assessed cash flows over the period of the contract and using market interest rates appropriate for similar instruments. The value is adjusted for the parties’ credit risks. |
There have been no transfers from one
Level to another Level during the six months ended June 30, 2025.
| (4) | Level 3 financial instruments carried at fair value |
The table hereunder presents a reconciliation
from the beginning balance to the ending balance of financial instruments carried at fair value in level 3 of the fair value hierarchy:
| | |
Financial assets | |
| | |
Financial power swap | |
| | |
€ in thousands | |
| Balance as at December 31, 2024 | |
| 13,427 | |
| | |
| | |
| Total income recognized in profit or loss | |
| (2,563 | ) |
| | |
| | |
| Total income recognized in other comprehensive income | |
| 3,397 | |
| | |
| | |
| Balance as at June 30, 2025 | |
| 14,261 | |
|