12	Capital and reserves

(a)

Share capital

	2025		2024

Number of ordinary shares (issued and paid up):
Balance at the beginning of the year		120,423,333		120,286,627
Exercise of share options (cashless)		42,575		136,706
Balance at the end of the year		120,465,908		120,423,333

As at December 31, 2025 the authorized share capital is comprised of 350,000,001 ordinary shares, with no par value. The holders of ordinary shares are entitled to receive dividends when declared and are entitled to one vote per share at meetings of the Company’s shareholders. All shares rank equally in respect to interests in the Company, including in respect to the Company’s residual assets, except as disclosed in (b) below.

In respect of dividends distributed by the Company to its shareholders, see Note 1(ii)(e).

(b)

Special State Share

The issued and paid-up share capital includes one share which is a Special State Share.

In the framework of privatizing the Company, as concluded in February 2004, all the State of Israel's holdings in the Company (about 48.6%) were acquired by The Israel Corporation (as later transferred to Kenon holdings Ltd.) pursuant to the related agreement. As part of the process, the Company allotted to the State of Israel a Special State Share, so that it could protect the vital interests of the State.

On July 14, 2014 the State and the Company have reached a settlement agreement (the “Settlement Agreement”) that has been validated as a judgment by the Supreme Court. The Settlement Agreement provides, inter alia, that the following arrangement shall apply: State’s consent is required to any transfer of the shares in the Company which confers on the holder a holding of 35% or more of the Company’s share capital. In addition, any transfer of shares which confers on the holders a holding exceeding 24% but not exceeding 35%, shall require a prior notice to the State. To the extent the State determines that the transfer involves a potential damage to the State’s security or any of its vital interests or if the State did not receive the relevant information in order to formulate a decision regarding the transfer, the State shall be entitled to inform, within 30 days, that it objects to the transfer, and it will be required to reason its objection. In such an event, the transferor shall be entitled to approach a competent court on this matter.

In addition, the Company is required to maintain a minimal fleet of 11 vessels, fully owned, either directly or through its subsidiaries. Subject to certain exceptions, any transfer of vessels in violation thereof shall be approved in advance by the State of Israel, pursuant to the related mechanism.

The Special State Share is non-transferable; its rights are described in the new Company’s Articles of Association. Except for the rights attached to the said share, it does not confer upon its holder voting rights or any share capital related rights.

(c)

Share-Based Payment Arrangements

During 2024 and 2023 the Board of Directors approved grants under the Company’s share option plans for employees, officers and directors (see also Note 28(b)), as detailed below:

Grant Date		Number of instruments		Instrument terms		Vesting terms		Contractual life
August 2023 March 2024 November 2024		80,868 43,160 34,827		Each option is exercisable into one ordinary share on a cash-less basis.		These options shall vest upon the first, second, third and fourth anniversary, in four equal instalments of 25% each.		5 years

The weighted average of options’ fair value, measured using the Black & Scholes model, and the related measurement inputs used, were as below:

Granted in	November 2024	March 2024	August 2023
Grant date fair value	USD 14.41	USD 4.94	USD 7.06
Share price on grant date	USD 26.10	USD 10.99	USD 14.26
Exercise price	USD 22.71	USD 12.48	USD 13.84
Expected volatility	54.0%	50.5%	50.1%
Expected life	5 years	5 years	5 years
Expected dividends (*)	0%	0%	0%
Risk-free interest rate	4.5%	4.1%	4.3%

(*) Options’ exercise price is adjusted in respect of dividend distributions.

Reconciliation of outstanding share options

	2025					2024					2023
	Issuable shares			Weighted average exercise price		Issuable shares			Weighted average exercise price		Issuable shares			Weighted average exercise price
Outstanding at the beginning of the period		2,100,107			28.52		2,238,787			32.36		2,461,430			37.05
Granted during the year							77,987			12.76		80,868			13.84
Exercised during the year		(45,206	)		1.03		(136,706	)		0.00		(136,706	)		0.00
Forfeited during the year		(74,396	)				(79,961	)				(166,805	)
Outstanding at the end of the period		1,980,505			25.46		2,100,107			28.52		2,238,787			32.36

Exercisable at the end of the period		1,425,604			24.97		965,791			29.39		513,115			11.74

The weighted average contractual life of the outstanding options as of December 31, 2025 was 1.35 years.

During the years ended December 31, 2025, 2024 and 2023, the Group recorded expenses related to share-based compensation arrangements of US$ 4.5 million, US$ 10.0 million and US$ 17.6 million, respectively.

(d)

Earnings (loss) per share

Basic and diluted earnings (loss) per share:

	2025		2024		2023
	US $ in millions
Profit (loss) attributable to ordinary shareholders used to calculate basic and diluted earnings per share (US $ in millions)		479.2		2,147.7		(2,695.6	)

Number of outstanding shares at the beginning of the period used to calculate basic earnings per share		120,423,333		120,286,627		120,149,921
Effect of share options		30,338		70,688		63,110

Weighted average number of ordinary shares used to calculate basic earnings per share		120,453,671		120,357,315		120,213,031

Effect of share options		62,183		135,110

Weighted average number of ordinary shares used to calculate diluted earnings per share		120,515,854		120,492,425		120,213,031

In the year ended December 31, 2025, options for 1,875,158 ordinary shares, granted under the Company’s share option plans for employees, officers and directors (see also above) were excluded from the diluted weighted average number of ordinary shares calculation as their effect would have been anti-dilutive.