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2001

Governance: D

CHEMANOL

Methanol Chemicals Co.

8.18 SAR / Share

As of: Mar 26, 2026

— P/E Ratio Trailing 12 Months

2.1x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

551.75M SAR Market Cap Total Valuation

2.12 Beta Systematic Risk Index

-117.9% Net Margin Net Profit / Revenue

The Story

Chemanol is currently undergoing a severe financial and operational restructuring necessitated by significant asset impairments, declining global chemical prices, and breached debt covenants.

Source: Q3 2025 (2025-11-11)

Value Creation -12.9% Excess Return on Capital (Spread between ROIC/ROE and Cost of Capital)

Cash Flow Payback — Estimated years of operating cash flows required to cover Enterprise Value

Performance & Distributions

Dividend Yield Trailing annual dividends paid relative to share price

—

Sustainable Growth Rate Rate at which company can grow internally using reinvested profits

+0.1%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

-117.9%

ROIC Return on Invested Capital

-2.3%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

—

P/B Ratio Market capitalization compared to corporate book value

2.1x

EV / EBITDA Operating multiple reflecting core operational leverage

—

EV / SALES Asset pricing multiple relative to total topline revenue

1.7x

Growth Story

The company's growth trajectory has shifted from expansion to contraction, with TTM revenue of 656.7 million SAR representing a significant decline from the 1.07 billion SAR reported in fiscal 2022. This downward trend is driven by a noticeable decline in market demand and a drop in global prices for key chemical products. With a five-year average reinvestment rate of -3.7% and a sustainable growth rate near zero (0.0008), the business currently lacks the internal capacity to fund growth through operations. Management is pivoting toward a survival strategy, focusing on a proposed capital reduction to extinguish accumulated losses and a future rights issuance to stabilize the balance sheet.

Profitability Dynamics

Profitability metrics reveal substantial value destruction, evidenced by a negative ROIC vs. WACC gap of -12.58%. The company reported a TTM operating margin of -59.4% and a net loss of 774.3 million SAR, exacerbated by a 336.4 million SAR impairment charge on its subsidiaries, Addar Chemicals and Global Company for Chemical Industries. These impairments reflect a reassessment of future cash flows as the recoverable amounts of these units fell below their carrying values. While the company maintains a five-year average ROIC of -2.28%, current TTM NOPAT of -394.7 million SAR highlights the immediate pressure on the core business to generate positive returns on its invested capital.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

2.12

Cost of Equity Minimum required rate of return demanded by shareholders

13.7%

WACC Weighted average cost of total debt and equity funding

10.7%

Debt-to-Equity Ratio Proportion of corporate funding financed by debt creditors

106.5%

Risk Factors

Chemanol faces acute financial risks, characterized by a high relevered beta of 2.08 and a breach of specific loan covenants that led to the reclassification of 237.4 million SAR in debt to current liabilities. The company's going concern status is under scrutiny as accumulated losses have exceeded half of its capital. Beyond leverage, the company is managing significant legal risks, including a 73 million SAR lawsuit regarding subsidiary acquisition payments and a 49.6 million SAR claim from former shareholders for repaid guarantees. Liquidity is tight, with only 54.8 million SAR in cash against substantial short-term obligations, making the successful execution of its 2026 rights issue critical for operational continuity.

Governance Disclosures

Rating: D

We track 5 key governance and oversight matters for this company in our database.

Significance: 8/10 Asset Risk

Recovery Lawsuit for Defaulted Debt Payments

Former shareholders who acted as guarantors for subsidiary debts have sued the Parent Company for SAR 49.6 million. This amount represents payments the guarantors were forced to make to lenders following the subsidiaries' defaults.

Mitigating Factors: Management has recognized the full amount of the liability against the claimed amount in the financial statements.

Significance: 7/10 Entrenchment

Litigation Regarding Unpaid Acquisition Consideration

The former shareholders of Global Company for Chemical Industries filed a lawsuit seeking SAR 73 million, claiming it is the outstanding balance for the 80% equity stake acquired by the Parent Company. The Parent Company disputes this, claiming certain conditions precedent were not met.

Mitigating Factors: The Parent Company has appointed legal counsel and intends to deny the allegations, asserting that contingency conditions have not been fulfilled.

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In-Depth Analysis