EMAAR EC

Emaar The Economic City

10.88 SAR / Share

As of: May 28, 2026

— P/E Ratio Trailing 12 Months

1.0x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

9.61B SAR Market Cap Total Valuation

1.12 Beta Systematic Risk Index

-6.0% Net Margin Net Profit / Revenue

The Story

Emaar The Economic City is a master developer undergoing a major capital restructuring and strategic pivot, backed by the Public Investment Fund to address severe liquidity constraints and operational headwinds.

Source: Q1 2026 (2026-05-20)

Value Creation -11.8% 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

+2214.1%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

-6.0%

ROIC Return on Invested Capital

-2.4%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

—

P/B Ratio Market capitalization compared to corporate book value

1.0x

EV / EBITDA Operating multiple reflecting core operational leverage

27.6x

EV / SALES Asset pricing multiple relative to total topline revenue

12.7x

Growth Story

The growth trajectory of Emaar The Economic City reflects a transition from severe contraction to a structured recovery phase, anchored in the metaphor of a replanted seed waiting for spring. Revenue rebounded from fiscal 2024's low of 425.97 million SAR to 1,138.22 million SAR in fiscal 2025, with TTM revenue standing at 1,091.87 million SAR. However, short-term performance remains volatile, as evidenced by revenue for the three months ended March 31, 2026, falling to 157.37 million SAR from 203.73 million SAR in the prior-year period. This decline was driven by a sharp drop in the sale of development properties from 111.45 million SAR to 22.96 million SAR. The company's long-term growth capacity is constrained by a negative five-year average reinvestment rate of -941.04% and a negative five-year average ROIC of -2.35%. To revive growth, management is utilizing a 1,000 million SAR shareholder loan from the Public Investment Fund, with 500 million SAR remaining undrawn as of March 31, 2026, to fund critical capital expenditures aimed at activating key areas of King Abdullah Economic City and stimulating future land sales.

Profitability Dynamics

Profitability remains the company's primary challenge, characterized by persistent net losses and a failure to cover its cost of capital, resembling an engine running on borrowed steam. The company's TTM net income stands at a loss of 66.02 million SAR, following a net loss of 8.90 million SAR in fiscal 2025 and a massive loss of 1,134.57 million SAR in fiscal 2024. While the TTM operating margin is positive at 21.16% with an EBIT of 231.03 million SAR, the net profit margin remains negative at -6.05%. The company's five-year average ROIC of -2.35% stands in stark contrast to its WACC of 9.47%, resulting in a value-destroying ROIC-vs-WACC gap of -11.83%. Value creation is further hindered by external shocks; for instance, the Ports Development Company, a 50% joint venture, suffered a significant reduction in revenue and cash flow in 2026 due to Red Sea shipping disruptions and a subsequent settlement with the National Container Terminal. Consequently, the company continues to destroy economic value, relying on capital injections rather than self-sustaining cash flows.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

1.12

Cost of Equity Minimum required rate of return demanded by shareholders

9.2%

WACC Weighted average cost of total debt and equity funding

9.5%

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

48.6%

Risk Factors

Emaar The Economic City's risk profile is dominated by severe liquidity constraints and high leverage, representing a tightrope walk in a storm. The company carries 4.66 billion SAR in total debt against a cash balance of 373.29 million SAR, with projected operating cash flows insufficient to meet upcoming debt repayments. To mitigate this, the company completed a major debt-to-equity conversion with the Public Investment Fund in late 2025, which increased the fund's ownership to 55.55% and settled a substantial portion of outstanding shareholder debt. Additionally, the company restructured its bank debt into a syndicated facility of 3.82 billion SAR, extending maturities to 2033. Despite these measures, the company faces near-term refinancing risks, including a New Money Facility repayable in mid-2026 for which an extension has been requested. Operational risks are also elevated, with a customer payment delay of 10 million SAR on a total due of 92 million SAR, and regional geopolitical tensions directly impacting its joint venture port operations.