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2100

Governance: C

WAFRAH

Wafrah for Industry and Development Co.

20.09 SAR / Share

As of: May 28, 2026

— P/E Ratio Trailing 12 Months

2.6x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

465.11M SAR Market Cap Total Valuation

0.66 Beta Systematic Risk Index

-69.9% Net Margin Net Profit / Revenue

The Story

Wafrah for Industry and Development Co. is a Saudi food manufacturer navigating a severe operational downturn, marked by shrinking revenues and substantial net losses, while attempting to restructure its asset base and optimize costs.

Source: Q1 2026 (2026-05-14)

Value Creation -13.2% 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

-8.0%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

-69.9%

ROIC Return on Invested Capital

-5.8%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

—

P/B Ratio Market capitalization compared to corporate book value

2.6x

EV / EBITDA Operating multiple reflecting core operational leverage

—

EV / SALES Asset pricing multiple relative to total topline revenue

5.3x

Growth Story

Wafrah's revenue trajectory has experienced a sharp contraction, falling from 161.63 million SAR in FY 2023 to 156.95 million SAR in FY 2024, and further dropping to 123.17 million SAR in FY 2025, with TTM revenue sitting at 88.56 million SAR. This downward trend is highlighted by a steep decline in quarterly sales, which fell from 57.49 million SAR in Q1 2025 to 22.88 million SAR in Q1 2026 across all major segments, including pastries, vegetables, and meat. With a 5-year average ROIC of -5.76% and a high reinvestment rate of 139.15%, the company's sustainable growth rate stands at -8.02%. This indicates that historical reinvestments have not translated into positive growth capacity, but have instead been consumed by operational inefficiencies and asset write-downs, leaving the company reliant on strategic capacity expansions and cost-optimization initiatives to reverse the contraction.

Profitability Dynamics

The company's profitability profile reveals severe value destruction, characterized by a TTM operating margin of -71.21% and a net profit margin of -69.91%, leading to a TTM net loss of 61.91 million SAR. This represents a significant deterioration from FY 2023 and FY 2024, when the company managed thin positive net incomes of 20.96 million SAR and 4.71 million SAR, respectively. Wafrah's 5-year average ROIC of -5.76% falls well short of its WACC of 7.44%, resulting in a negative value creation gap of -13.20%. The operational losses are compounded by non-operating headwinds, such as a 1.24 million SAR revaluation loss on its investment in Rakhaa Agricultural Investment Company in early 2026. While management points to strategic investments in property, plant, and equipment as a pathway to restore future margins, current cash generation remains heavily constrained by these persistent operational deficits.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.66

Cost of Equity Minimum required rate of return demanded by shareholders

7.2%

WACC Weighted average cost of total debt and equity funding

7.4%

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

1.8%

Risk Factors

Wafrah faces elevated financial and operational risks, highlighted by accumulated losses reaching 50.3 million SAR as of March 31, 2026, and a net loss of 10.7 million SAR for the first quarter of 2026. Although the company's latest balance sheet shows a relatively modest direct debt of 8.44 million SAR against a cash balance of 7.33 million SAR, its risk profile is amplified by off-balance-sheet exposures and legacy liabilities. Specifically, the company has committed to a debt transfer liability of 7.03 million SAR to the Saudi Development Fund, due in early 2027, arising from a loan guarantee for its affiliate, Rakhaa Agricultural. Additionally, Wafrah is exposed to ongoing Zakat disputes with the Zakat, Tax and Customs Authority, alongside commodity price volatility and operational execution risks as it attempts to optimize its cost structure and utilize its 152.32 million SAR in net property, plant, and equipment.

Governance Disclosures

Rating: C

We track 12 key governance and oversight matters for this company in our database.

Significance: 3/10 Tunneling

Compensation and Rewards for Board and Senior Management

During the three-month period ended March 31, 2026, Wafrah paid salaries, compensation allowances, and annual/periodic bonuses to non-executive Board members and senior management totaling SR 1,878,559, compared to SR 1,405,461 in the prior period.

Mitigating Factors: Disclosed in accordance with regulatory requirements.

Significance: 4/10 Entrenchment

Concentrated Ownership Structure

Miras Al Sharqiya Investment Company, a single-shareholder company, holds a significant concentrated ownership stake of 25.57% (5,919,274 shares) in Wafrah, while the remaining 74.43% is held by various other shareholders.

Mitigating Factors: The majority of the shares (74.43%) are held by public/different shareholders, limiting absolute control.

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In-Depth Analysis