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4320

Governance: D

ALANDALUS

Alandalus Property Co.

15.02 SAR / Share

As of: May 28, 2026

— P/E Ratio Trailing 12 Months

1.5x P/B Ratio Price to Book Value

3.3% Dividend Yield Annual Dividend / Share

1.40B SAR Market Cap Total Valuation

1.10 Beta Systematic Risk Index

-5.3% Net Margin Net Profit / Revenue

The Story

Al-Andalus Property Company is navigating a capital-intensive transition, balancing steady rental income from retail and office assets against the drag of hospitality impairments and high financing costs.

Source: Annual 2025 (2026-03-31)

Value Creation -3.7% 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

3.3%

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

+2.8%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

-5.3%

ROIC Return on Invested Capital

4.8%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

—

P/B Ratio Market capitalization compared to corporate book value

1.5x

EV / EBITDA Operating multiple reflecting core operational leverage

21.5x

EV / SALES Asset pricing multiple relative to total topline revenue

9.3x

Growth Story

Al-Andalus has maintained a stable revenue base, with TTM revenue reaching 237.1 million SAR, a slight increase from 235.9 million SAR in fiscal 2024. However, the company's long-term growth capacity is constrained by a modest sustainable growth rate of 2.84%. This is a direct result of a low five-year average Return on Invested Capital (ROIC) of 4.80%, which limits the effectiveness of its high reinvestment rate of 59.22%. While the company is actively investing in renovations, such as the Al-Andalus Mall Hotel, and new developments like the Malqa Al-Andalus Tower, the current growth profile suggests that capital deployment is not yet translating into significant top-line acceleration.

Profitability Dynamics

While the company maintains a robust operating margin of 26.75% TTM, its bottom-line performance is under pressure, evidenced by a net loss of 12.5 million SAR for the TTM period. The core profitability challenge lies in the gap between its ROIC and its Weighted Average Cost of Capital (WACC) of 8.48%, resulting in a value destruction gap of -3.68%. Profitability is further weighed down by recurring impairment losses in the hospitality sector, totaling 3 million SAR in 2025 following an 8 million SAR charge in 2024. Despite generating 63.4 million SAR in operating income, high finance costs of 58.8 million SAR and significant capital expenditures of 64.9 million SAR have constrained free cash flow generation.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

1.10

Cost of Equity Minimum required rate of return demanded by shareholders

9.1%

WACC Weighted average cost of total debt and equity funding

8.5%

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

62.8%

Risk Factors

The company's risk profile is characterized by high leverage and sensitivity to interest rate fluctuations. With total debt reaching 880.1 million SAR and an adjusted net debt-to-equity ratio of 93%, Al-Andalus is heavily reliant on Islamic financing facilities tied to SAIBOR. A 100-basis point increase in commission rates would impact the statement of profit or loss by approximately 8.8 million SAR. Additionally, the company faces significant credit risk, as evidenced by a 44% loss allowance on its operating lease receivables, with a substantial portion of tenant debt being more than 90 days past due. The hospitality segment remains a specific area of concern, requiring ongoing impairment testing and capital support.

Governance Disclosures

Rating: D

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

Significance: 4/10 Tunneling

Expense Absorption for Associate

The Group paid expenses totaling SAR 8,787,422 on behalf of Hayat Real Estate Company, an associate entity, during the 2025 fiscal year.

Mitigating Factors: The Group maintains a 'Due from related parties' balance for these payments, though the balance decreased from the prior year.

Significance: 9/10 Asset Risk

Financial Guarantee for Associate Obligations

The Group has provided a financial guarantee to a local bank for credit facilities granted to West Jeddah Hospital Company, an associate in which the Group holds a 50% stake, for an amount up to SAR 766.5 million.

Mitigating Factors: The Group re-evaluates its ability to exercise control over the investee through its ability to direct related activities.

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

In-Depth Analysis