On 2026-08-11 16:21:36 (Saudi Time), Emaar The Economic City(4220.SA) 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 30 June 2026, sales/revenue declined 11.801% YoY to SAR 284 million (from SAR 322 million), primarily because property development projects that had been recognized on a percentage-of-completion basis reached full completion and were delivered during 2025, generating no comparable revenue in the current period, partially offset by a 27% increase in operational revenue from city operations and higher student enrollment in the education subsidiary. Net loss attributable to shareholders narrowed by 6.018% YoY to SAR 203 million (from SAR 216 million), mainly driven by a SAR 153 million decrease in financial charges due to the restructuring of long-term commercial debt at lower interest rates and conversion of shareholder loans into equity during 2025, a SAR 158 million increase in other operating income from the gain on sale of Investment Property, and a reduction in the share of loss from an equity-accounted investee (which in the prior period included a one-off SAR 49 million adjustment for fire-incident losses). These improvements were partially offset by the revenue decline, a SAR 7 million increase in operational expenses from higher marketing and employee costs, the absence of the prior period's one-off SAR 243 million debt extinguishment gain, and a SAR 44 million charge for expected credit loss provisions versus a reversal in the same prior period.

Quarter-on-Quarter Performance Drivers

QoQ revenue declined 19.108% to SAR 127 million (vs. SAR 157 million in the prior quarter), driven by lower sales of residential units and land, as well as decreased operational revenue from city operations and the education segment. Despite the revenue drop, net loss narrowed sharply by 87.777% to SAR -22 million (from SAR -180 million), primarily due to a SAR 178 million gain on the sale of Investment Property and a SAR 11 million reduction in operational expenses from lower marketing spend. These improvements were partially offset by the revenue decline and a SAR 5 million increase in Expected Credit Loss (ECL) provisions from higher unbilled receivables.

Other Items

Emaar, the Economic City's interim financial results for the six months ended 30 June 2026 received an unmodified conclusion from the external auditor. However, the auditor drew attention to Note 1 of the interim condensed consolidated financial statements, highlighting a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern. Specifically, the Group incurred a net loss of SAR 203 million (30 June 2025: SAR 216 million) and reported a net operating cashflow deficit of SAR 150 million during the six-month period ended 30 June 2026 (30 June 2025: SAR 174 million). Furthermore, current liabilities exceeded current assets by SAR 457 million as of 30 June 2026, compared to current assets exceeding current liabilities by SAR 134 million as of 31 December 2025. The auditor noted that "the Group's ability to achieve sustainable profitability and continue its operations without significant curtailment is highly dependent on the successful execution of management's plans, including obtaining additional funding from shareholders and the sale of properties to generate sufficient cash flows." Accumulated losses stood at SAR 265 million, representing 3% of capital. Total shareholders' equity (after deducting minority equity) was SAR 9,078 million, up 79.976% from SAR 5,044 million in the same period of the prior year. Loss per share for the current period was SAR -0.23, compared to SAR -0.41 in the same period of the prior year. Additionally, the auditor noted that the comparative income statements for the quarter and six-month period ended 30 June 2025 were restated to reflect the estimated loss from a fire incident at a project owned by a Fund over which the Group has significant influence; the project was fully insured and the related insurance claim is currently at an advanced stage.

Original announcement:

https://www.saudiexchange.sa/wps/portal/saudiexchange/newsandreports/issuer-news/issuer-announcements/issuer-announcements-details/?anId=97564&anCat=1&cs=4220&locale=ar

Important Notice: The announcement information and market data in this report are sourced directly from the Saudi Exchange (Tadawul). This summary is generated by Sahm’s proprietary AI model for informational purposes only. While we strive for accuracy, it should not be construed as financial advice or an investment recommendation.