On 2026-07-29 09:48:23 (Saudi Time), Bawan Co. announced its Interim financial results for the six months ended on June 30, 2026.

Year-on-Year Performance Drivers

For the six-month period ending June 30, 2026, sales/revenue increased 6.689% YoY to SAR 2,001.84 million (from SAR 1,876.32 million), primarily driven by the full-period consolidation of the oil and gas industries sector revenues (versus partial recognition starting February 13, 2025 in the prior year) and higher quantities sold in the plastics industries sector, partially offset by declines in metal, wood, and electrical industry revenues. Net profit attributable to shareholders declined 41.523% YoY to SAR 105.87 million (from SAR 181.04 million), mainly due to a one-time non-cash bargain purchase gain of SR 126 million recognized in Q1-2025 related to the oil and gas sector acquisition, increased non-cash amortization of intangible assets from the purchase price allocation (PPA) rising to SR 72 million in H1-2026 versus SR 40 million in H1-2025, lower net profit in the electrical industries sector from reduced quantities sold and average selling prices, lower wood products profit from decreased quantities sold, and higher operating and zakat expenses; these headwinds were partially mitigated by improved metal sector profitability (profit of SR 26 million vs. a loss of SR 0.2 million in H1-2025), higher plastics sector earnings, a gain on land sale of SR 2.4 million, and decreased finance costs.

Quarter-on-Quarter Performance Drivers

QoQ, revenue declined 5.895% to SAR 970.52 million (from SAR 1,031.32 million), driven by lower sales volumes in the oil & gas and wood sectors, partially offset by revenue gains in the electric, plastic, and metal sectors. Despite the revenue decline, net profit attributable to shareholders rose 3.892% QoQ to SAR 53.94 million (from SAR 51.92 million), supported by improved margins in the metal, wood, and plastics sectors (driven by better selling prices), a reduction in non-cash amortization of intangible assets from the oil & gas sector PPA, and lower zakat, income tax, and finance charges. These gains were partially offset by lower oil & gas revenues and profits due to reduced sales volumes, a decline in the electrical sector's net profit from lower average selling prices, higher operating expenses, and reduced other income following the prior quarter's recognition of a gain on land sale in the plastics sector.

Other Items

The external auditor issued an unmodified conclusion with no additional comments in any other matter, emphasis, notice, disclaimer, or adverse opinion paragraphs. On an adjusted basis, excluding the non-cash PPA amortization charge of SAR 72 million (Bawan's share: SAR 58 million), the underlying effective net profit for H1-2026 amounted to SAR 164 million. Gross profit for H1-2026 was SAR 326 million, representing a reported gross margin of 16%; excluding the non-cash PPA amortization charge of SAR 60 million absorbed at the cost of sales level, the underlying effective gross profit amounted to SAR 386 million, reflecting an effective gross margin of 19%, compared to an effective gross profit of SAR 289 million (15% gross margin) for H1-2025. Operating income was SAR 157 million on a reported basis; adjusting for the same SAR 72 million non-cash PPA charge, the underlying effective operating income amounted to SAR 229 million, compared to SAR 170 million during H1-2025. The Group achieved EBITDA of SAR 282 million during H1-2026, compared to SAR 212 million in H1-2025. The company noted it is closely monitoring the geopolitical situation in the region and will continue to manage supply chain, operational, and customer-related risks across its industrial segments, with the potential long-term impact to be assessed on future reporting dates. Comparative figures for the three- and six-month periods ended June 30, 2025 have been revised to reflect the retrospective impact of the finalized PPA, which the company clarified represents measurement-period non-cash accounting adjustments under IFRS 3 and does not constitute a correction of a prior-period error under IAS 8.

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