Kenon Holdings Ltd (NYSE: KEN) reported second-quarter earnings per share (EPS) of $0.85, a 750% increase from $0.10 in the same period last year. The holding company’s results were driven by its majority stake in OPC Energy Ltd.

OPC Energy’s net profit for the three months ended June 30, 2026, reached $15 million, compared to just $1 million in the same period last year. This surge was primarily fueled by the first-time consolidation of US power plants and higher customer consumption in Israel. Kenon also received $93 million from Peru in August 2026 to settle an arbitration award.

Financial Performance

OPC’s total revenue jumped 93% year-on-year to $379 million in Q2 2026, up from $196 million in Q2 2025. The growth reflects significant expansion in both its Israeli and US operations.

Cost of sales (excluding depreciation and amortization) rose to $265 million from $150 million, aligning with the higher revenue base. Finance expenses remained relatively stable at $22 million, slightly up from $20 million a year ago.

Regional Breakdown

The revenue increase was broad-based across geographies:

• Israel: Revenue grew to $203 million from $153 million, aided by higher customer consumption and currency translation effects from the strengthening New Israeli Shekel.
• United States: Revenue surged to $176 million from $43 million. This spike is largely due to the consolidation of the Shore and Maryland power plants in January and May 2026, respectively.

What the Numbers Show

The dramatic shift in profitability structure is notable. While net profit soared 14-fold, Adjusted EBITDA grew by a more moderate 46%. This divergence highlights that the bottom-line improvement was significantly amplified by accounting changes—specifically, the move from equity-accounting associated companies to full consolidation for key US assets. Consequently, the "share of profit of associated companies" line item dropped sharply from $21 million to $4 million as those profits were now embedded directly in revenue and operating costs.

Strategic Developments

Kenon highlighted several operational milestones:

• Hadera Expansion: Financial closing was completed in June 2026 for the 850 MW combined-cycle natural gas plant adjacent to the existing Hadera facility. Construction has commenced.
• Rogue’s Wind: The 114 MW wind project in Pennsylvania began commercial operations, with OPC receiving a $160 million tax equity investment.
• Debt Issuance: In August 2026, OPC issued NIS 600 million (approx. $202 million) in Series E bonds.

Liquidity Position

As of June 30, 2026, OPC held unrestricted cash and equivalents of $1,261 million against total consolidated indebtedness of $2,977 million. Kenon’s stand-alone cash position improved to $605 million by August 31, 2026, with no material debt at the holding company level.

Kenon Holdings Ltd. (NYSE: KEN) (TASE: KEN) has received the final payment from the Republic of Peru regarding an arbitration award issued in its favor in October 2023. The tribunal, constituted under the International Centre for Settlement of Investment Disputes, had previously ordered the Republic of Peru to pay damages and costs to Kenon and IC Power.

The total payment received from the Republic of Peru was approximately $203 million. After allocating a portion of the proceeds to a capital provider and paying certain expenses, Kenon’s share amounts to approximately $93 million, subject to tax. This payment marks the conclusion of the matter.

Award Details

The arbitration award, as previously disclosed, ordered the Republic of Peru to pay Kenon and IC Power $110.7 million in damages. This figure included $6.4 million in fees and costs, along with pre-award and post-award interest. The payment also reflects the dismissal of the Republic of Peru’s subsequent application to annul the award.

Capital Provider Agreement

Kenon and IC Power had entered into an agreement with a capital provider to fund expenses related to pursuing the arbitration claims against the Republic of Peru. Under this agreement, the capital provider is entitled to the return of its capital and a portion of the award proceeds. The allocation of funds to this provider accounts for the difference between the total payment received and Kenon’s net share.

What the Numbers Show

The data reveals a significant divergence between the gross award value and the net proceeds retained by Kenon. While the damages and costs ordered by the tribunal totaled $110.7 million plus interest, the total cash inflow from Peru was $203 million. However, Kenon retains only $93 million after allocations. This indicates that interest accruals and third-party funding repayments constitute a substantial portion of the total settlement value, reducing the direct economic benefit to the company relative to the headline award size.