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4142

Governance: B

RIYADH CABLES

Riyadh Cables Group Co.

113.50 SAR / Share

As of: May 28, 2026

15.7x P/E Ratio Trailing 12 Months

5.2x P/B Ratio Price to Book Value

3.5% Dividend Yield Annual Dividend / Share

16.99B SAR Market Cap Total Valuation

0.81 Beta Systematic Risk Index

10.2% Net Margin Net Profit / Revenue

The Story

Riyadh Cables Group Company demonstrates robust financial health, combining double-digit revenue growth with exceptional returns on capital that comfortably exceed its cost of capital.

Source: Annual 2025 (2026-04-22)

Value Creation +16.2% 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

3.5%

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

+11.1%

Payout Ratio Percent of net profits distributed as dividends

55.2%

Net Margin Net profit margin generated from total operational revenue

10.2%

ROIC Return on Invested Capital

24.2%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

15.7x

P/B Ratio Market capitalization compared to corporate book value

5.2x

EV / EBITDA Operating multiple reflecting core operational leverage

12.9x

EV / SALES Asset pricing multiple relative to total topline revenue

1.6x

Growth Story

A Regional Conduit. Riyadh Cables has demonstrated a strong growth trajectory, with revenue rising from SR 7.83 billion in FY 2023 to SR 9.01 billion in FY 2024, and reaching SR 10.67 billion in FY 2025. This expansion is supported by a solid 5-year average reinvestment rate of 45.78% and a 5-year average ROIC of 24.22%, yielding a sustainable growth rate of 11.09%. Growth is further propelled by strategic international acquisitions, such as the purchase of a 51% stake in Uzbekistan's Artikul Aziya Kabel LLC in late 2025 for SR 147.7 million, and a subsequent memorandum of understanding in early 2026 to manage the Syrian Modern Cables Company with a planned SR 60 million investment.

Profitability Dynamics

Conducting High-Yield Currents. The company's profitability is anchored by its exceptional value creation, characterized by a 5-year average ROIC of 24.22% that dwarfs its WACC of 7.97%, creating a substantial value gap of 16.24%. Operating income grew from SR 647.6 million in FY 2023 to SR 1.27 billion in FY 2025, with operating margins improving to 11.87% and net profit margins reaching 10.16% in FY 2025. This strong profitability translates into robust cash flows, enabling the company to fund capital expenditures of SR 188.88 million in FY 2025 and support generous dividend distributions, including H1 and H2 2025 payouts totaling over SR 636 million.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.81

Cost of Equity Minimum required rate of return demanded by shareholders

7.8%

WACC Weighted average cost of total debt and equity funding

8.0%

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

3.7%

Risk Factors

Insulating Against Volatile Surges. Despite strong performance, Riyadh Cables faces notable risks, particularly commodity price volatility for copper, aluminum, and lead, which it manages through extensive commodity forward contracts. Credit risk is also a key focus, as evidenced by a sharp increase in the expected credit loss provision for trade receivables, which rose from SR 111.87 million in FY 2024 to SR 262.68 million in FY 2025. On the leverage front, the company's debt-to-adjusted-equity ratio stands at 117%, with net debt of SR 3.74 billion against adjusted equity of SR 3.17 billion, primarily driven by short-term Islamic Murabaha facilities utilized to support working capital. Additionally, subsequent geopolitical developments in the Gulf introduce fluid operational uncertainties.

Governance Disclosures

Rating: B

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

Significance: 3/10 Entrenchment

Long-Term Employee Incentive Share Scheme

The Group operates a share-based payment program for employees under which 283,300 shares have vested as of 31 December 2025. The average fair value per share on the vesting date was SR 82.1. Total expenses related to the program were SR 5 million in 2025 and SR 8 million in 2024.

Mitigating Factors: The settlement and distribution of the vested shares are subject to Board of Directors and/or any other required approvals and are expected to occur during 2026.

Significance: 4/10 Propping

Acquisition of Alrowad Company from a Shareholder

A subsidiary of the Group acquired Alrowad Company for Production of Electrical Cables Limited in Iraq from Abdul Qadir Al Muhaidib & Sons Company, a shareholder of the Company. The net assets acquired exceeded the cash consideration paid, resulting in a reserve of SR 22.7 million recognized in equity.

Mitigating Factors: The transaction resulted in a positive reserve recognized directly in the consolidated statement of changes in equity.

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In-Depth Analysis