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2285

Governance: D

ARABIAN MILLS

Arabian Mills for Food Products Co.

45.00 SAR / Share

As of: May 28, 2026

9.0x P/E Ratio Trailing 12 Months

1.7x P/B Ratio Price to Book Value

1.3% Dividend Yield Annual Dividend / Share

2.31B SAR Market Cap Total Valuation

0.91 Beta Systematic Risk Index

25.2% Net Margin Net Profit / Revenue

The Story

Arabian Mills operates as a highly profitable, cash-generative food staple producer with stable revenue growth and a strong focus on deleveraging.

Source: Q1 2026 (2026-05-14)

Value Creation +3.6% 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

1.3%

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

-1.5%

Payout Ratio Percent of net profits distributed as dividends

11.7%

Net Margin Net profit margin generated from total operational revenue

25.2%

ROIC Return on Invested Capital

11.5%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

9.0x

P/B Ratio Market capitalization compared to corporate book value

1.7x

EV / EBITDA Operating multiple reflecting core operational leverage

8.4x

EV / SALES Asset pricing multiple relative to total topline revenue

2.9x

Growth Story

Arabian Mills has demonstrated steady top-line expansion, with revenue rising from SAR 862.08 million in fiscal 2023 to SAR 973.94 million in fiscal 2024, SAR 997.66 million in fiscal 2025, and reaching SAR 1.02 billion in the trailing twelve months (TTM). Despite this consistent upward trajectory, the company's long-term growth capacity is constrained by a negative five-year average reinvestment rate of -12.82%, resulting in a negative sustainable growth rate of -1.48%. This indicates that the business is currently prioritizing capital return and debt reduction over aggressive asset expansion, relying on its existing capacity and operational efficiencies to drive incremental revenue rather than heavy capital reinvestment.

Profitability Dynamics

The company exhibits robust profitability, characterized by a TTM operating margin of 25.77% and a net profit margin of 25.23%, translating to a TTM net income of SAR 257.99 million. Arabian Mills consistently creates economic value, as evidenced by its five-year average Return on Invested Capital (ROIC) of 11.51%, which comfortably exceeds its Weighted Average Cost of Capital (WACC) of 7.92%, yielding a positive value creation gap of 3.59%. This strong return profile is supported by efficient operational management, including recent positive adjustments such as a SAR 1.66 million reversal of inventory net realizable value write-downs in early fiscal 2026, which bolsters short-term cost of sales.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.91

Cost of Equity Minimum required rate of return demanded by shareholders

8.3%

WACC Weighted average cost of total debt and equity funding

7.9%

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

41.3%

Risk Factors

While Arabian Mills carries a moderate risk profile with a relevered beta of 0.91, its primary financial risk stems from its debt load, with latest total debt standing at SAR 954.62 million against a cash balance of SAR 331.88 million. However, the company has actively mitigated this leverage risk by making substantial unscheduled early repayments on its Murabaha facility, including SAR 400 million in fiscal 2023, SAR 200 million in fiscal 2024, and SAR 100 million in fiscal 2025. Operational and regulatory risks are also present, highlighted by a SAR 5.6 million provision made in fiscal 2024 for a disputed GFSA fine regarding compliance with the Flour Mills Production Law, demonstrating the company's exposure to strict agricultural regulations.

Governance Disclosures

Rating: D

We track 5 key governance and oversight matters for this company in our database.

Significance: 3/10 Info Asymmetry

Related-Party Transactions Framework

The Company discloses that terms of transactions with related parties, which include shareholders and key management personnel, are approved by management and based on contractual arrangements.

Mitigating Factors: Transactions are approved by the Company's management and are based on contractual arrangements.

Significance: 8/10 Tunneling

Acquisition Debt Service of Former Parent Company

The former Parent Company signed a Murabaha facility agreement of SR 1,500 million to acquire shares in the Company, with the debt recognized by the Company. The Company has made early repayments of SR 400 million, SR 200 million, and SR 100 million in 2023, 2024, and 2025 respectively.

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In-Depth Analysis