Al Arabia profit down 19% to SAR 192.5M in 9M 2024; Q3 at SAR 44.3M

10/11/2024 Argaam Exclusive

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Arabian Contracting Services Co. (Al Arabia) reported a net profit fall of 19% to SAR 192.5 million in the first nine months of 2024, from SAR 238.8 million a year earlier.

Financials (M)

Item	9m 2023	9m 2024	Change‬
Revenues	910.68	1,166.02	28.0 %
Gross Income	408.93	445.10	8.8 %
Operating Income	319.56	325.79	1.9 %
Net Income	238.80	192.46	(19.4 %)
Average Shares	50.00	50.00	-
EPS (Riyals)	4.78	3.85	(19.4 %)

The nine-month net profit was hurt by higher operating expenses (OpEx) as the company gears up for all projects. Al Arabia commenced operations for advertising spaces at King Khalid International Airport (KKIA). Al Arabia also recorded a 146% year-on-year (YoY) increase in finance costs (FCs).

On the other hand, topline jumped 28% YoY to SAR 1.16 billion. This growth was driven by both outdoor and indoor advertisements, which recorded rises of 1% and 439% YoY, respectively. This is attributed to several reasons, including the start of operations at KKIA and the financial impact of the company’s full acquisition of Faden Media Co.

Other revenue drivers were the back-to-school and university season, the National Day and Foundation Day campaigns, as well as the 2024 eSports World Cup.

Moreover, the continuation of digital transformation initiatives and the adoption of smart solutions in outdoor advertising mediums contributed to expanding advertising spaces and increasing the capacity to accommodate a larger space of campaigns and advertisers.

Current Quarter Comparison (M)

Compared With The

Item	Q3 2023	Q3 2024	Change‬
Revenues	303.99	352.88	16.1 %
Gross Income	123.14	99.40	(19.3 %)
Operating Income	92.96	68.62	(26.2 %)
Net Income	62.93	44.31	(29.6 %)
Average Shares	50.00	50.00	-
EPS (Riyals)	1.26	0.89	(29.6 %)

Item	Q2 2024	Q3 2024	Change‬
Revenues	374.06	352.88	(5.7 %)
Gross Income	142.17	99.40	(30.1 %)
Operating Income	98.21	68.62	(30.1 %)
Net Income	47.32	44.31	(6.4 %)
Average Shares	50.00	50.00	-
EPS (Riyals)	0.95	0.89	(6.4 %)

The third-quarter net income fell by 30% to SAR 44.3 million, from SAR 62.9 million in Q3 2023 hurt by higher OpEx. FCs also increased by 130% YoY. This, however, was offset by a 16% YoY rise in revenue.

Compared to the previous quarter, Al Arabia’s net earnings decreased by 6.4% from SAR 47.3 million as revenue declined by 6% sequentially due to seasonal factors.

Total shareholders’ equity, after minority interest, rose to SAR 1.29 billion as of Sept. 30, 2024, from SAR 1.03 billion in the year-earlier period.

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