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4020

Governance: A

ALAKARIA

Saudi Real Estate Co.

16.14 SAR / Share

As of: May 28, 2026

7.9x P/E Ratio Trailing 12 Months

1.0x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

6.05B SAR Market Cap Total Valuation

0.94 Beta Systematic Risk Index

48.8% Net Margin Net Profit / Revenue

The Story

Backed by a 64.58% Public Investment Fund stake, ALAKARIA operates as a highly leveraged, capital-intensive real estate developer whose financial performance is heavily tied to national development plans and non-operating valuation adjustments.

Source: Q1 2026 (2026-05-19)

Value Creation -3.0% 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

+8.9%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

48.8%

ROIC Return on Invested Capital

4.7%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

7.9x

P/B Ratio Market capitalization compared to corporate book value

1.0x

EV / EBITDA Operating multiple reflecting core operational leverage

19.1x

EV / SALES Asset pricing multiple relative to total topline revenue

5.0x

Growth Story

ALAKARIA's revenue trajectory shows a volatile pattern, with TTM revenue standing at SAR 1.57 billion, down from SAR 1.88 billion in FY 2025 and SAR 1.99 billion in FY 2024. This decline is highlighted in the interim Q1 2026 results, where revenue fell to SAR 319.88 million from SAR 628.08 million in Q1 2025, primarily due to a sharp contraction in the property sales segment from SAR 305.95 million to SAR 43.29 million. Despite these short-term fluctuations, the company maintains a high long-term growth capacity, driven by a massive 5-year average reinvestment rate of 187.27%. Combined with a 5-year average ROIC of 4.74%, this yields a sustainable growth rate of 8.87%. Growth is heavily dependent on unlocking major capital-intensive projects, such as the Al Widyan project (carrying SAR 2.90 billion in land and capital works in-progress) and resolving ongoing studies on SAR 438.00 million of land currently not available for use.

Profitability Dynamics

Historically, ALAKARIA has struggled with economic value creation, as evidenced by a negative ROIC-to-WACC gap of -3.03%, with its 5-year average ROIC of 4.74% falling short of its 7.77% WACC. However, recent profitability metrics paint a highly distorted picture; TTM net income reached SAR 767.34 million, far exceeding its TTM EBIT of SAR 308.16 million. This anomaly is explained by a massive, non-recurring, non-cash remeasurement gain of SAR 640.00 million recognized in Q1 2026 after the company lost significant influence over Riyadh Holding Company (reducing its stake to 13.09%) and reclassified it as an equity instrument at FVOCI. While the TTM operating margin remains respectable at 19.60%, the TTM profit margin is artificially inflated to 48.82% by this transaction. True operational cash flow generation remains constrained by heavy capital expenditures (TTM Capex of SAR 321.54 million) and the capital-intensive nature of its developed properties, which stand at SAR 647.31 million.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.94

Cost of Equity Minimum required rate of return demanded by shareholders

8.4%

WACC Weighted average cost of total debt and equity funding

7.8%

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

52.8%

Risk Factors

ALAKARIA's risk profile is characterized by substantial leverage and asset encumbrance. The company carries SAR 3.20 billion in latest total debt against a cash balance of SAR 1.33 billion, resulting in a highly leveraged capital structure. This debt is heavily secured, with SAR 3.20 billion of its investment properties (which total SAR 5.83 billion) pledged as collateral to the Ministry of Finance and local banks. The company's debt includes a rescheduled local bank term loan of SAR 2.07 billion (with semi-annual repayments commencing in December 2026) and an outstanding Ministry of Finance loan of SAR 673.10 million. Beyond financial leverage, ALAKARIA faces significant business-specific risks: its flagship Al Widyan project is subject to ongoing government development studies that could alter its original plan, and SAR 438.00 million of its land bank is currently unusable. These risks are partially mitigated by its low systematic risk profile (relevered beta of 0.94) and the implicit stability provided by its majority shareholder, the Public Investment Fund.

Governance Disclosures

Rating: A

We track 7 key governance and oversight matters for this company in our database.

Significance: 4/10 Tunneling

Asset Transfer to Associate Entity

During the period, the company transferred investment property assets with a net book value of SR 17.47 million to an associate entity.

Mitigating Factors: The investment in associates is accounted for using the equity method, reflecting the company's continued significant influence.

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In-Depth Analysis