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2283

Governance: B

FIRST MILLS

First Milling Co.

51.85 SAR / Share

As of: May 28, 2026

10.2x P/E Ratio Trailing 12 Months

0.0x P/B Ratio Price to Book Value

5.3% Dividend Yield Annual Dividend / Share

2.86M SAR Market Cap Total Valuation

0.65 Beta Systematic Risk Index

23.5% Net Margin Net Profit / Revenue

The Story

First Mills is a highly profitable, cash-generative milling leader in Saudi Arabia, combining robust operating margins of 28.83% with steady revenue growth, despite historical capital structure and privatization adjustments.

Source: Q1 2026 (2026-05-07)

Value Creation -21.3% 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

5.3%

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

+0.4%

Payout Ratio Percent of net profits distributed as dividends

54.4%

Net Margin Net profit margin generated from total operational revenue

23.5%

ROIC Return on Invested Capital

-14.3%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

10.2x

P/B Ratio Market capitalization compared to corporate book value

0.0x

EV / EBITDA Operating multiple reflecting core operational leverage

—

EV / SALES Asset pricing multiple relative to total topline revenue

-166.5x

Growth Story

First Mills has demonstrated consistent top-line expansion, with TTM revenue reaching 1,195,530 thousand SR, up from 1,146,374 thousand SR in FY2025 and 1,048,855 thousand SR in FY2024. Despite this steady revenue growth, the company's long-term growth capacity is constrained by a negative 5-year average reinvestment rate of -2.70% and a negative 5-year average ROIC of -14.25%, resulting in a modest Sustainable Growth Rate of 0.38%. This indicates that while current operations are expanding, long-term organic growth capacity relies heavily on the successful execution of ongoing capital projects, such as the Bran Tower in Jeddah and the New Mill C in Qassim, which are expected to boost future capacity.

Profitability Dynamics

The profitability profile of First Mills is highlighted by exceptional operational efficiency, with an Operating Margin of 28.83% and a Profit Margin of 23.50% in the TTM period, translating to an EBIT of 344,697 thousand SR and Net Income of 280,967 thousand SR. However, the company's historical return on capital shows a negative 5-year average ROIC of -14.25%, creating a negative gap of -21.35% against its WACC of 7.10%. This historical drag reflects the heavy capital adjustments and privatization costs from its transition period. In contrast, current cash generation remains robust, supported by a TTM Capex of 85,102 thousand SR directed toward upgrading facilities, which positions the company to improve its return on capital as these modernizations begin to yield higher asset turnover.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.65

Cost of Equity Minimum required rate of return demanded by shareholders

7.1%

WACC Weighted average cost of total debt and equity funding

7.1%

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

0.0%

Risk Factors

From a risk perspective, First Mills exhibits a low-beta profile of 0.648, reflecting the defensive, non-cyclical nature of the food security sector. While the primary financial results report zero latest debt, the footnotes reveal a more complex capital structure, including a substantial Term Murabaha facility with Alinma Bank (utilizing SR 1.3 billion of a SR 1.371 billion facility), an interest-free SIDF loan of SR 75 million, and a SAB term facility of SR 103.15 million. This leverage is managed through structured semi-annual repayments and is subject to financial covenants. The primary operational risks stem from price regulations on major flour products (45kg and above) by the General Food Security Authority (GFSA) and lease dependencies, such as constructing buildings on land leased from the GFSA.

Governance Disclosures

Rating: B

We track 11 key governance and oversight matters for this company in our database.

Significance: 5/10 Tunneling

Settlement of Key Management Share-Based Compensation Scheme

The Company settled its vested share-based payment awards by transferring 300,000 treasury shares to eligible key management employees. The cumulative balance recognized in the share-based payment reserve of SR 22.06 million was reclassified against treasury shares carrying a cost of SR 25.32 million, with the SR 3.25 million difference recognized directly in retained earnings.

Mitigating Factors: The purchase of up to 300,000 shares to be allocated to employees under the scheme was approved by the shareholders at the Extraordinary General Assembly Meeting held on 10 January 2024.

Significance: 2/10 Propping

Related-Party Transactions with Shareholder Al Mutlaq Group

The Company has outstanding balances due to its shareholder, Al Mutlaq Group Industrial Investment Company, arising from expenses incurred on behalf of the Company. During the three-month period ended 31 March 2026, these transactions amounted to SR 11,697, leaving a closing payable balance of SR 97,565.

Mitigating Factors: Transactions are approved by management, based on contractual arrangements, interest-free, unsecured, and payable on demand.

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In-Depth Analysis