SGS

Saudi Ground Services Co.

31.32 SAR / Share

As of: May 28, 2026

16.0x P/E Ratio Trailing 12 Months

2.2x P/B Ratio Price to Book Value

3.2% Dividend Yield Annual Dividend / Share

5.89B SAR Market Cap Total Valuation

0.93 Beta Systematic Risk Index

13.5% Net Margin Net Profit / Revenue

The Story

Saudi Ground Services Company operates as the critical operational backbone of the Kingdom's aviation sector, demonstrating steady revenue recovery alongside a conservative capital structure, though historical returns have struggled to outpace its cost of capital.

Source: Q1 2026 (2026-05-12)

Value Creation -3.1% 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

3.2%

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

-0.2%

Payout Ratio Percent of net profits distributed as dividends

51.2%

Net Margin Net profit margin generated from total operational revenue

13.5%

ROIC Return on Invested Capital

5.0%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

16.0x

P/B Ratio Market capitalization compared to corporate book value

2.2x

EV / EBITDA Operating multiple reflecting core operational leverage

14.2x

EV / SALES Asset pricing multiple relative to total topline revenue

2.1x

Growth Story

SGS has demonstrated consistent top-line expansion, with revenues rising from SR 2.46 billion in FY 2023 to SR 2.68 billion in FY 2024, and reaching SR 2.73 billion in FY 2025, a level maintained in the TTM period at SR 2.73 billion. Despite this steady post-pandemic recovery in flight volumes, the company's long-term growth capacity is constrained by a negative 5-year average reinvestment rate of -3.69%. This negative reinvestment, combined with a 5-year average ROIC of 5.02%, yields a negative sustainable growth rate of -0.19%. This indicates that SGS is currently harvesting cash and distributing capital rather than aggressively reinvesting in organic expansion, relying instead on the broader structural growth of Saudi tourism and aviation to drive its top-line performance.

Profitability Dynamics

While SGS has maintained positive profitability, with a TTM operating margin of 9.63% and a net profit margin of 13.46% (supported by SR 367.53 million in TTM net income), its historical capital efficiency reveals a value-destruction gap. The company's 5-year average ROIC of 5.02% falls short of its WACC of 8.15%, resulting in a negative ROIC-to-WACC gap of -3.13%. Although recent operating income grew from SR 228.23 million in FY 2023 to SR 331.28 million in FY 2025, the TTM EBIT has softened to SR 262.88 million. This suggests that while the company generates substantial absolute profits, its historical returns on capital have not consistently cleared the hurdle rate required by its investors, though its current cash generation remains supported by a TTM Capex of SR 242.08 million.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.93

Cost of Equity Minimum required rate of return demanded by shareholders

8.4%

WACC Weighted average cost of total debt and equity funding

8.1%

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

3.1%

Risk Factors

SGS exhibits a highly conservative financial risk profile, characterized by a net cash position with SR 308.32 million in cash against SR 184.32 million in total debt. This low leverage is complemented by a moderate re-levered beta of 0.93, reflecting its defensive utility-like profile. However, the company faces unique operational risks. It is highly dependent on its parent and major customer, Saudi Arabian Airlines Corporation, which holds a 52.5% stake. Furthermore, as disclosed in its recent financial notes, escalating geopolitical tensions in the Middle East present an ongoing external risk to regional air travel, although management has assessed these events and confirmed that business continuity frameworks remain robust and the going concern assumption remains fully appropriate.