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2180

Governance: D

FIPCO

Filing and Packing Materials Manufacturing Co.

29.06 SAR / Share

As of: Mar 26, 2026

— P/E Ratio Trailing 12 Months

2.6x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

334.19M SAR Market Cap Total Valuation

1.29 Beta Systematic Risk Index

-7.6% Net Margin Net Profit / Revenue

The Story

FIPCO is a specialized manufacturer of industrial packaging and technical textiles currently navigating operational losses while pursuing a transformative acquisition to reset its growth trajectory.

Source: Annual 2025 (2026-04-07)

Value Creation -9.1% 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

-0.3%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

-7.6%

ROIC Return on Invested Capital

0.5%

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

1.6x

Growth Story

FIPCO's revenue has experienced volatility, with TTM figures reaching SAR 251.6 million, a slight recovery from FY 2024 but still trailing FY 2023 performance. The company's internal capacity for growth is currently constrained, as evidenced by a negative Sustainable Growth Rate of -0.25% and a negative 5-year average reinvestment rate. To counter this stagnation, management is pivoting toward inorganic growth, specifically through a major agreement to acquire Benaa Industrial Investments Holding Company for an estimated SAR 372 million. This acquisition, which exceeds the company's current market capitalization, represents a significant strategic bet intended to be financed through a capital increase.

Profitability Dynamics

The company is currently in a value-destructive phase, with its 5-year average ROIC of 0.47% falling significantly short of its 9.53% WACC, creating a negative gap of over 9%. Profitability has deteriorated sharply, resulting in an operating margin of -9.2% and a net loss of SAR 19.1 million TTM. While the Packing and Packaging segment remains the core revenue contributor, the Technical Textiles segment struggled in FY 2025, reporting a gross loss that further pressured consolidated margins. This trend highlights a disconnect between the company's capital deployment and its ability to generate positive operating cash flows.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

1.29

Cost of Equity Minimum required rate of return demanded by shareholders

10.0%

WACC Weighted average cost of total debt and equity funding

9.5%

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

25.8%

Risk Factors

FIPCO's risk profile is characterized by operational headwinds and high-stakes strategic moves, reflected in a relevered beta of 1.29. Total debt has climbed to SAR 86.3 million, largely due to increased reliance on short-term credit facilities to fund activities. A major risk factor is the pending Benaa Holding acquisition, which is subject to numerous regulatory and shareholder approvals and could lead to significant dilution. Furthermore, credit risk has intensified, with the provision for expected credit losses jumping to SAR 17.6 million in FY 2025 from just SAR 4.5 million in the prior year, indicating potential collection issues within its customer base.

Governance Disclosures

Rating: D

We track 10 key governance and oversight matters for this company in our database.

Significance: 5/10 Tunneling

Profit-Sharing Liability to Former Minority Shareholder

Following the 2020 acquisition of a 20% non-controlling interest in FPC Industrial Company, the Group is contractually obligated to pay the selling party 20% of the subsidiary's annual net profit for ten years, ending December 31, 2029. The contingent liability was valued at SAR 6.78 million at year-end.

Mitigating Factors: The liability is reassessed annually based on the best estimates of available data and subsidiary performance.

Significance: 4/10 Tunneling

Board and Senior Management Compensation

Total compensation and benefits paid to the Board of Directors and senior executives amounted to SAR 7,718,842 in 2025. This includes SAR 5.1 million in short-term salaries and SAR 2.37 million in allowances and rewards for the Board and other committees.

Mitigating Factors: Pricing policies and terms of transactions with related parties are approved by the Board of Directors.

For more, click here to view the full governance profile →

In-Depth Analysis