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3020

Governance: A

YC

Yamama Cement Co.

25.62 SAR / Share

As of: Mar 26, 2026

10.7x P/E Ratio Trailing 12 Months

1.0x P/B Ratio Price to Book Value

3.9% Dividend Yield Annual Dividend / Share

5.19B SAR Market Cap Total Valuation

1.37 Beta Systematic Risk Index

33.9% Net Margin Net Profit / Revenue

The Story

A legacy cement producer scaling capacity through heavy infrastructure investment while navigating a high-cost capital environment.

Source: Annual 2025 (2026-02-25)

Value Creation -3.5% 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

3.9%

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

+2.3%

Payout Ratio Percent of net profits distributed as dividends

41.9%

Net Margin Net profit margin generated from total operational revenue

33.9%

ROIC Return on Invested Capital

5.1%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

10.7x

P/B Ratio Market capitalization compared to corporate book value

1.0x

EV / EBITDA Operating multiple reflecting core operational leverage

11.4x

EV / SALES Asset pricing multiple relative to total topline revenue

4.9x

Growth Story

Revenue has shown robust momentum, climbing from 935 million SAR in fiscal 2023 to over 1.42 billion SAR in the twelve months ended December 31, 2025. This expansion is underpinned by a significant reinvestment strategy, with a five-year average reinvestment rate of 44.99%. Much of this capital is tied to the development of a major new production line, reflected in the 1.21 billion SAR currently held in capital works in progress. Despite this aggressive scaling, the company's sustainable growth rate is mathematically constrained to 2.31%, as the current returns on invested capital have not yet fully captured the potential of these massive infrastructure outlays.

Profitability Dynamics

Yamama maintains healthy operational efficiency, evidenced by an operating margin of 29.42% and a net profit margin of 33.93% for the TTM period. However, a deeper look at value creation reveals a challenge: the five-year average ROIC of 5.14% sits below the estimated WACC of 8.35%, resulting in a negative value gap of 3.21%. This suggests that while the company is profitable in absolute terms, it is currently earning less than its cost of capital. Cash flow generation remains focused on internal needs, with significant non-cash adjustments including a 144.4 million SAR fair value loss on financial assets and the ongoing capitalization of employee benefits into long-term projects.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

1.37

Cost of Equity Minimum required rate of return demanded by shareholders

10.4%

WACC Weighted average cost of total debt and equity funding

8.6%

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

35.4%

Risk Factors

The company’s risk profile is characterized by a relatively high beta of 1.33, indicating sensitivity to broader market movements. Financial risk is centered on a substantial debt load of 1.84 billion SAR, primarily composed of Islamic facilities from local banks and a 105 million SAR balance with the Saudi Industrial Development Fund (SIDF). While the company successfully reduced its SIDF obligations from 295 million SAR in fiscal 2024, it remains exposed to SIBOR-linked commission rate fluctuations. Additionally, the company faces geographical concentration risks, with nearly all assets located within the Kingdom, and specific environmental liabilities related to land rehabilitation costs, which grew to 38.9 million SAR in fiscal 2025.

Governance Disclosures

Rating: A

We track 8 key governance and oversight matters for this company in our database.

Significance: 3/10 Asset Risk

Full Impairment of Investment in Foreign Associate

The company holds a 20% equity stake in Saudi Yamani Cement Co., which is headquartered in Yemen. Due to the risks associated with the investment, the company has recognized a full impairment provision of SAR 75.06 million, reducing the net book value of the investment to zero.

Mitigating Factors: The investment has been fully provisioned in the financial statements to reflect the loss of value.

Significance: 5/10 Info Asymmetry

Supply Chain Concentration with Associate Entity

The company relies on its associate, Cement Product Industry Co. Ltd., for the procurement of packing paper bags, with purchases totaling SAR 25.17 million in 2025. The company holds a 33.33% equity interest in this associate.

Mitigating Factors: Transactions are disclosed as being within the ordinary scope of work and determined by fair value.

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In-Depth Analysis