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2040

Governance: A

SAUDI CERAMICS

Saudi Ceramic Co.

28.66 SAR / Share

As of: Mar 26, 2026

15.8x P/E Ratio Trailing 12 Months

1.8x P/B Ratio Price to Book Value

1.7% Dividend Yield Annual Dividend / Share

2.86B SAR Market Cap Total Valuation

1.23 Beta Systematic Risk Index

12.1% Net Margin Net Profit / Revenue

The Story

Saudi Ceramics is navigating a structural recovery phase, where top-line growth and one-off insurance inflows are masking a historical struggle to generate returns above its cost of capital.

Source: Annual 2025 (2026-04-11)

Value Creation -9.5% 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

1.7%

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

+0.0%

Payout Ratio Percent of net profits distributed as dividends

27.6%

Net Margin Net profit margin generated from total operational revenue

12.1%

ROIC Return on Invested Capital

0.1%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

15.8x

P/B Ratio Market capitalization compared to corporate book value

1.8x

EV / EBITDA Operating multiple reflecting core operational leverage

13.4x

EV / SALES Asset pricing multiple relative to total topline revenue

2.3x

Growth Story

Revenue has shown a steady recovery, rising from SAR 1.31 billion in fiscal 2023 to a TTM figure of SAR 1.49 billion. Despite this upward trajectory in sales, the company's long-term growth capacity is constrained by a marginal sustainable growth rate of 0.02%. This is a direct result of a very low 5-year average ROIC of 0.12% coupled with a modest reinvestment rate of 15.6%. While the company is expanding its porcelain tiles factory and upgrading production lines, the historical data suggests that current reinvestments have yet to translate into efficient organic growth, leaving the company reliant on volume increases in a competitive local market.

Profitability Dynamics

The profitability narrative is defined by a significant value-creation gap, with a WACC of 9.59% dwarfing the 5-year average ROIC, resulting in a negative gap of -9.47%. While the TTM profit margin appears robust at 12.1%, this figure is heavily influenced by a SAR 120 million one-time insurance settlement related to a previous fire incident. Excluding such non-recurring items, the underlying operating margin of 6.54% reflects the pressure of rising energy costs, which increased from SAR 80.3 million to SAR 118.3 million year-over-year. Cash flow generation remains tied to heavy inventory requirements, which stood at SAR 827.9 million at the end of 2025.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

1.23

Cost of Equity Minimum required rate of return demanded by shareholders

9.7%

WACC Weighted average cost of total debt and equity funding

9.6%

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

20.5%

Risk Factors

Saudi Ceramics faces a multifaceted risk profile characterized by a relevered beta of 1.23, indicating higher sensitivity to market volatility. The company carries SAR 587 million in debt, including significant obligations to the Saudi Industrial Development Fund (SIDF) and commercial banks. Specific business risks include the planned liquidation of the Ceramic Pipes subsidiary due to declining demand and the ongoing sensitivity to energy price fluctuations. While the company remains in compliance with all debt covenants, the reliance on short-term revolving facilities (SAR 391.5 million) to fund working capital exposes it to interest rate volatility and liquidity tightening.

Governance Disclosures

Rating: A

We track 7 key governance and oversight matters for this company in our database.

Significance: 3/10 Tunneling

Board and Executive Compensation

The Group disclosed total compensation for key management and board members amounting to SAR 11.67 million. This includes SAR 3.63 million in board remuneration and allowances and SAR 8.05 million in salaries and compensation for executive management.

Mitigating Factors: Remuneration is paid in accordance with the Board remuneration policy and committee charters approved by the General Assembly.

Significance: 6/10 Propping

Subsidiary Capital Restructuring and Debt Conversion

The parent company increased its ownership in Ceramic Pipes Company (CPC) from 77.89% to 92.22% and in Ceramics Investment Company (CIC) to 99.6%. This was achieved through two capital increases totaling SAR 14.5 million, which were settled by the parent company against its outstanding current account balance with the subsidiary rather than through new cash injections.

Mitigating Factors: The capital restructuring was approved by the General Assembly of the subsidiary.

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In-Depth Analysis