← Market Overview

3008

Governance: A

ALKATHIRI

Al Kathiri Holding Co.

1.75 SAR / Share

As of: May 28, 2026

— P/E Ratio Trailing 12 Months

7.0x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

395.58M SAR Market Cap Total Valuation

1.50 Beta Systematic Risk Index

-19.9% Net Margin Net Profit / Revenue

The Story

Al Kathiri Holding Company is experiencing significant financial distress, characterized by widening net losses, accumulated deficits exceeding half of its capital, and covenant breaches, despite its strategic diversification into luxury yacht manufacturing and real estate.

Source: Q1 2026 (2026-05-14)

Value Creation -11.5% 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

-2.5%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

-19.9%

ROIC Return on Invested Capital

-0.9%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

—

P/B Ratio Market capitalization compared to corporate book value

7.0x

EV / EBITDA Operating multiple reflecting core operational leverage

—

EV / SALES Asset pricing multiple relative to total topline revenue

2.1x

Growth Story

Al Kathiri's revenue trajectory shows a historical expansion from SAR 129.18 million in FY 2023 to SAR 183.87 million in FY 2024, and peaking at SAR 274.03 million in FY 2025. However, the trailing twelve months (TTM) revenue has contracted to SAR 250.25 million, reflecting a sharp slowdown. This slowdown is evident in the first quarter of fiscal 2026, where three-month revenue fell to SAR 28.06 million from SAR 51.84 million in the prior year's period, driven by a drop in concrete sales and the complete absence of contracting revenue. Despite a high 5-year average reinvestment rate of 286.58%, the company's negative returns on capital have dragged its sustainable growth rate down to -2.50%. This indicates that aggressive capital deployment into new ventures, such as the specialized yacht manufacturing plant in Rabigh and the Odoo ERP system, has not yet translated into sustainable top-line expansion, leaving the company's long-term growth capacity severely constrained by operational inefficiencies.

Profitability Dynamics

The company's profitability profile is severely depressed, with a TTM operating margin of -13.01% and a net profit margin of -19.92%, culminating in a TTM net loss of SAR 49.84 million. This represents a worsening trend from the net losses of SAR 18.98 million in FY 2024 and SAR 41.04 million in FY 2025. The core of Al Kathiri's value destruction lies in its inability to generate returns above its cost of capital; its 5-year average ROIC stands at -0.87% against a WACC of 10.65%, creating a negative value gap of -11.52%. This persistent underperformance has led to accumulated losses of SAR 69.2 million as of March 31, 2026, representing 61% of its share capital. High raw material prices and production input costs continue to erode margins, while heavy finance costs—including SAR 2.10 million in quarterly returns to sukuk holders—ensure that cash flows remain deeply negative, casting significant doubt on the company's ability to continue as a going concern.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

1.50

Cost of Equity Minimum required rate of return demanded by shareholders

11.0%

WACC Weighted average cost of total debt and equity funding

10.6%

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

34.7%

Risk Factors

Al Kathiri's risk profile is elevated by substantial leverage and tightening liquidity. The company's total debt stands at SAR 137.29 million against a cash balance of only SAR 5.52 million, resulting in a debt-to-equity ratio of 67.90% as of March 31, 2026. This debt burden is anchored by a SAR 100 million sukuk issuance carrying an 8.5% annual return and a Saudi Industrial Development Fund (SIDF) loan. Financial risk escalated significantly in fiscal 2025 when the company breached a financial covenant on its SIDF credit facility, forcing a reclassification of the loan as a current liability. Furthermore, the company faces a SAR 2.49 million Zakat assessment dispute from ZATCA for which it has fully provisioned. With a high relevered beta of 1.50 reflecting market volatility, and a working capital deficit of SAR 618,814, Al Kathiri's operational survival is highly dependent on the successful execution of management's cost-rationalization plans and securing alternative financing.

Governance Disclosures

Rating: A

We track 6 key governance and oversight matters for this company in our database.

Significance: 6/10 Propping

Personal Guarantees by Managing Director and Major Shareholder

Mr. Mishaal Al-Kathiri, who holds a 41.32% stake in the company and serves as the Managing Director, provided personal and surety guarantees to secure credit facilities of SAR 16,521,000 for Al Kathiri Holding Company and SAR 8,000,000 for its subsidiary, Elyan Industrial Company.

Mitigating Factors: The guarantees are provided by the shareholder to support the company's financing needs without any disclosed fee or cost to the company.

Significance: 4/10 Asset Risk

Parent Company Guarantees for Subsidiary Obligations

Al Kathiri Holding Company provides credit support to its 100%-owned subsidiary, Msandh Alemdad Company, through letters of guarantee totaling SAR 520,800. This represents a commitment of the parent's credit capacity for the subsidiary's operational requirements.

Mitigating Factors: The beneficiary is a wholly-owned subsidiary, aligning the economic interests of the parent and the entity being guaranteed.

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

In-Depth Analysis