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6001

Governance: C

HB

Halwani Bros. Co.

30.96 SAR / Share

As of: May 28, 2026

23.5x P/E Ratio Trailing 12 Months

3.1x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

1.09B SAR Market Cap Total Valuation

0.73 Beta Systematic Risk Index

5.1% Net Margin Net Profit / Revenue

The Story

Halwani Brothers is a well-established regional food manufacturer navigating a post-turnaround phase across Saudi Arabia and Egypt, balancing high debt costs against recovering operating margins.

Source: Q1 2026 (2026-05-03)

Value Creation -0.6% 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

-1.1%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

5.1%

ROIC Return on Invested Capital

8.0%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

23.5x

P/B Ratio Market capitalization compared to corporate book value

3.1x

EV / EBITDA Operating multiple reflecting core operational leverage

9.6x

EV / SALES Asset pricing multiple relative to total topline revenue

1.3x

Growth Story

Halwani Brothers' growth trajectory resembles a pruned orchard, where the focus has shifted toward consolidation and efficiency rather than aggressive expansion. Revenue rose from SR 882.72 million in FY 2023 to SR 969.06 million in FY 2024, before softening to SR 903.87 million in FY 2025, with TTM revenue stabilizing at SR 911.58 million. This consolidation is reflected in a negative five-year average reinvestment rate of -13.49%, indicating that the company has been rationalizing its asset base and extracting capital rather than deploying new funds. Consequently, the sustainable growth rate stands at -1.08%, suggesting that near-term growth capacity is constrained as the company prioritizes operational stabilization over physical expansion.

Profitability Dynamics

Operating like a calibrated scale, the company is carefully balancing value creation against historical headwinds. The five-year average ROIC of 7.98% falls slightly short of the WACC of 8.58%, resulting in a narrow negative value creation gap of -0.59%. However, the profitability trend shows a strong recovery from the severe operational crisis of FY 2023, when the company reported an operating loss of SR -56.29 million and a net loss of SR -98.01 million. By FY 2024, operating income rebounded to SR 119.69 million, and the TTM period shows a healthy operating margin of 9.37% (EBIT of SR 85.38 million) and a net profit margin of 5.10% (Net Income of SR 46.51 million). Capital expenditures remain highly disciplined at SR 15.36 million TTM, allowing the company to preserve cash and maintain a current working capital buffer of SR 227.41 million.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.73

Cost of Equity Minimum required rate of return demanded by shareholders

7.5%

WACC Weighted average cost of total debt and equity funding

8.6%

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

14.5%

Risk Factors

Halwani Brothers walks a dual-currency tightrope, managing significant leverage and macroeconomic exposures across its Saudi and Egyptian operations. Total debt stands at SR 158.78 million against a cash balance of SR 42.61 million. This debt is split between medium-term Al Rajhi Bank facilities in Saudi Arabia (SR 40.63 million outstanding) and short-term working capital facilities, including SR 53.30 million in Saudi Tawarruq contracts and SR 64.60 million in Egyptian Murabaha contracts. While the company's cost of equity is moderate at 7.45% (with a relevered beta of 0.7266), its after-tax cost of debt is high at 16.33%, reflecting the elevated interest rate environment and currency volatility in Egypt. This high cost of debt places a heavy burden on cash flow and highlights the risk of operating in inflationary, foreign-exchange-constrained markets.

Governance Disclosures

Rating: C

We track 10 key governance and oversight matters for this company in our database.

Significance: 4/10 Info Asymmetry

Banking Relationship with Related-Party Bank

The Group maintains a banking relationship with Al Baraka Bank, an entity related to a board member. Transactions during the period included finance charges of 105 and a current account balance of 5,374 as of the period end.

Significance: 5/10 Info Asymmetry

Related-Party Sales and Purchases

The Group conducted sales of finished goods to several related parties linked to board members and senior executives, including Express food Company, Aquat Food Industries, Al Wasta Food Services Co. Ltd, Halwani International LLC, Food Service group company, Dallah Taibah Hotel, and Dallah hospital, alongside purchases from Dallah Trading Company.

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In-Depth Analysis