Riyadh - Mubasher: Aljazira Capital said that Saudi Logistics Services Company (SAL) witnessed an exceptional year in terms of business volume in 2024, due to the positive impact of events in the Red Sea.

The research firm added, in a report seen by Mubasher on Tuesday, that it has reduced the target price for SAL shares to SAR 186 per share (compared to SAR 205 previously), while maintaining a "neutral" recommendation.

She noted that volumes are expected to return to normal with the return to normal conditions in 2025, with growth resuming from 2026, as long-term growth factors continue to support this trend.

Aljazira Capital expects SAL Saudi's cargo volumes to grow at a compound annual growth rate (CAGR) of 9.3% during the period 2024-2029.

It also noted that the growth in shipping volume and logistics business is expected to lead to revenue growth at a compound annual rate of 11.4% during the period 2024-2029.

She continued: "However, the shift in revenue mix towards lower-margin logistics businesses, amid expectations of continued pressure on air freight rates and rising financing costs, is likely to lead to margin contraction."

The research firm expects net profit to grow at a compound annual rate of 8.2% to SAR 981 million by 2029.

Saudi Logistics Company's 2024 results revealed a net profit increase to SAR 661.45 million, compared to SAR 509.72 million in 2023, an increase of 29.77%.