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4071

Governance: C

ALARABIA

Arabian Contracting Services Co.

93.55 SAR / Share

As of: May 28, 2026

102.3x P/E Ratio Trailing 12 Months

3.3x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

5.15B SAR Market Cap Total Valuation

1.51 Beta Systematic Risk Index

2.7% Net Margin Net Profit / Revenue

The Story

ALARABIA is a dominant outdoor advertising force in Saudi Arabia, delivering strong operating margins while navigating high lease-driven leverage and regional geopolitical shifts.

Source: Q1 2026 (2026-05-18)

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

-0.1%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

2.7%

ROIC Return on Invested Capital

10.6%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

102.3x

P/B Ratio Market capitalization compared to corporate book value

3.3x

EV / EBITDA Operating multiple reflecting core operational leverage

23.0x

EV / SALES Asset pricing multiple relative to total topline revenue

6.1x

Growth Story

Under the metaphor of 'The Expanding Horizon,' ALARABIA's revenue trajectory shows robust historical expansion, climbing from 1.28 billion SAR in FY 2023 to 1.64 billion SAR in FY 2024, and peaking at 1.95 billion SAR in FY 2025. However, TTM revenue has moderated to 1.83 billion SAR, reflecting a recent slowdown. This deceleration is tied to heightened geopolitical instability in the Middle East in early 2026, which has softened regional advertising demand. The company's long-term growth capacity is historically self-funded, though its 5-year average reinvestment rate of -0.86% and flat sustainable growth rate of -0.09% indicate that future expansion will rely heavily on optimizing existing digital assets and successfully integrating past acquisitions rather than aggressive new capital deployment.

Profitability Dynamics

Framed as 'The High-Yield Stage,' ALARABIA demonstrates solid economic value creation, posting a 5-year average ROIC of 10.57% against a WACC of 7.53%, which yields a positive spread of 3.04%. Operating profitability remains highly efficient, with a TTM operating margin of 22.55% driven by EBIT of 413.84 million SAR. Despite this strong operational performance, the TTM net profit margin is compressed at 2.74% (Net Income of 50.31 million SAR). This compression is primarily due to heavy finance costs associated with lease liabilities under IFRS 16, notably a single massive contract with Remat Al Riyadh Development Company that represents 2 billion SAR of the company's 3.86 billion SAR in right-of-use assets.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

1.51

Cost of Equity Minimum required rate of return demanded by shareholders

11.0%

WACC Weighted average cost of total debt and equity funding

7.5%

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

124.2%

Risk Factors

Under the metaphor of 'The Weighted Anchor,' ALARABIA's risk profile is defined by substantial leverage and short-term liquidity pressures. As of March 31, 2026, the group's current liabilities exceed its current assets by 1.42 billion SAR, creating a significant working capital deficit. Total debt stands at 6.39 billion SAR, which includes 1.82 billion SAR in short-term loans and 886.65 million SAR in long-term Murabaha facilities used to finance the Faden acquisition. Additionally, the company carries 3.68 billion SAR in lease liabilities. A critical contract-specific risk is the 1.52 billion SAR early termination penalty associated with its primary Riyadh advertising contract, alongside ongoing exposure to regional geopolitical instability.

Governance Disclosures

Rating: C

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

Significance: 6/10 Propping

CEO Promissory Notes Securing Bank Facilities

The Group's long-term Murabaha debt of SR 886.65 million, deferred sales facilities of SR 35 million, and Tawarruq financing of SR 33 million are secured by promissory notes issued personally by the Group's CEO.

Mitigating Factors: The promissory notes are provided to secure commercial bank facilities for the Group's operations and acquisitions.

Significance: 4/10 Tunneling

Key Management Personnel Compensation

Compensation for key management personnel (Board, CEO, CFO, executive directors) totaled SAR 15,636,193 for the nine-month period ended September 30, 2025, covering salaries, wages, rewards, and defined benefits obligations.

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

In-Depth Analysis