On 2026-08-11 15:48:01 (Saudi Time), Red Sea International Co.(4230.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 16.256% YoY from SAR 1,479.85 million to SAR 1,239.27 million, primarily driven by a slower pace of project execution, a 16% drop in general construction revenue (from SAR 1,242 million to SAR 1,039 million), and a 60% decline in revenue from sale of buildings (from SAR 149 million to SAR 60 million), partially offset by a 57% increase in rental and facilities management revenue (from SAR 89 million to SAR 140 million). Net loss attributable to shareholders widened by 14.675% YoY from SAR -12.48 million to SAR -14.32 million, driven by reduced gross profit margins (gross margin falling from 12% to 11%), higher finance costs due to increased borrowings, and increased provisions for expected credit losses on aging retention receivables and contract assets, compounded by non-cash PPA-related amortisation charges of SAR 48.8 million per half-year period, though partially offset by savings in selling, general and administrative expenses and reduced losses from discontinued operations.

Quarter-on-Quarter Performance Drivers

QoQ revenue declined 3.671% to SAR 608.05 million (from SAR 631.22 million in the previous quarter), driven by a slower pace of project execution. Gross profit fell 23.282% QoQ to SAR 58.48 million, as projects were executed at lower margins. The net result swung to a loss of SAR 16.86 million from a profit of SAR 2.54 million in the prior quarter, primarily due to the gross profit compression, higher finance costs from increased borrowings, and rising provisions for expected credit losses on aging retention receivables and contract assets, partially offset by savings in Selling, General and Administrative expenses and the cessation of losses from discontinued operations.

Other Items

Red Sea International Co. received an unmodified conclusion from its external auditors for the period ended 30 June 2026, with no additional comments or qualifications noted. Accumulated losses stood at SAR 52,745 thousand, representing 10.9% of capital. The company highlighted that selling and distribution expenses include non-cash PPA-related amortisation charges of SAR 48.8 million per half-year period arising from the acquisition of a subsidiary; excluding these charges, operating profit would have been SAR 48.02 million for the period ended 30 June 2026 compared to SAR 91.6 million in the comparative period, and consolidated net profit before such charges would have been SAR 13.7 million compared to SAR 50.6 million in the prior year period. The company noted these PPA-related amortisation charges are expected to remain consistent over the remaining quarters of FY 2026 before declining significantly from Q1 FY 2027 as one of the major underlying intangible assets reaches the end of its useful life. Total shareholders' equity (after deducting minority equity) stood at SAR 418,150 thousand as of the current period, compared to SAR -4,915 thousand in the same period of the prior year. Certain prior period amounts were reclassified and restated to conform with the current period presentation, with details provided in note 19 of the condensed consolidated interim financial statements.

Original announcement:

https://www.saudiexchange.sa/wps/portal/saudiexchange/newsandreports/issuer-news/issuer-announcements/issuer-announcements-details/?anId=97539&anCat=1&cs=4230&locale=ar

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