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2240

Governance: C

SENAAT

Advanced Building Industries Co.

36.16 SAR / Share

As of: Mar 26, 2026

15.0x P/E Ratio Trailing 12 Months

4.1x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

2.17B SAR Market Cap Total Valuation

1.89 Beta Systematic Risk Index

2.3% Net Margin Net Profit / Revenue

The Story

SENAAT is transitioning from a period of deep losses and regulatory overhangs toward a consolidated industrial powerhouse, though it still faces significant capital efficiency hurdles.

Source: Q3 2025 (2025-11-17)

Value Creation -11.9% 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

-0.2%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

2.3%

ROIC Return on Invested Capital

-2.5%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

15.0x

P/B Ratio Market capitalization compared to corporate book value

4.1x

EV / EBITDA Operating multiple reflecting core operational leverage

11.1x

EV / SALES Asset pricing multiple relative to total topline revenue

0.6x

Growth Story

Revenue has demonstrated a strong upward trajectory, expanding from SAR 3.9 billion in fiscal 2022 to a TTM figure of SAR 6.37 billion. This growth is primarily fueled by the steel and air conditioning segments, which together represent the core of the group's external sales. However, the company's long-term capacity for self-funded growth remains constrained; a 5-year average ROIC of -2.5% combined with a modest reinvestment rate results in a negative sustainable growth rate. Recent strategic moves, such as the full acquisition of Middle East Air Conditioners (MEAC) and Arabian Fiberglass Insulation (AFICO), indicate a shift toward consolidating its most vital units to capture a larger share of the industrial value chain as it moves away from its legacy structure.

Profitability Dynamics

The company is emerging from a period of significant value destruction, as evidenced by a 5-year average ROIC that trails its 8.9% WACC by a gap of 11.4%. Despite this historical underperformance, recent data reveals a recovery: TTM operating margins have reached 4.18%, and net income has swung from a SAR 278 million loss in fiscal 2023 to a SAR 144 million profit in the TTM period. Profitability is currently anchored by the steel and insulation segments, which have successfully offset persistent operating losses in the construction division. While cash flow generation is stabilizing, the company still manages a net current liability position of SAR 50.8 million, necessitating a reliance on operational cash flows and unutilized credit facilities to meet short-term obligations.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

1.89

Cost of Equity Minimum required rate of return demanded by shareholders

12.7%

WACC Weighted average cost of total debt and equity funding

9.4%

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

101.9%

Risk Factors

SENAAT’s risk profile is defined by high operational and financial leverage, reflected in a relevered beta of 1.65. The company has recently cleared a major hurdle by fully settling a historical Zakat liability that once reached SAR 229 million. However, business-specific risks persist, including a recent SAR 29 million court-imposed penalty related to project delays in its air conditioning services unit. Furthermore, with SAR 2.05 billion in short-term loans primarily utilized for working capital, the company remains highly sensitive to interest rate fluctuations. Geographic exposure to volatile markets like Egypt also introduces currency and economic risks that could impact the consistency of international earnings.

Governance Disclosures

Rating: C

We track 4 key governance and oversight matters for this company in our database.

Significance: 3/10 Tunneling

Key Management and Board Compensation

During the nine-month period, compensation paid to key management personnel totaled SAR 6.6 million, compared to SAR 3.7 million in the prior year period. Board of Directors compensation for the same period was SAR 1.275 million.

Significance: 4/10 Tunneling

Consolidation of Ownership in Middle East Air Conditioners Company Limited

The Company acquired the remaining 49% shareholding in MEAC from a foreign shareholder for a consideration of SAR 3.59 million. This transaction increased the Company's ownership from 51% to 100%, resulting in a provisional gain on bargain purchase of SAR 152,000.

Mitigating Factors: The acquisition was accounted for using the acquisition method under IFRS 3, and the purchase consideration was based on provisional fair values.

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In-Depth Analysis