On 2026-08-11 16:14:37 (Saudi Time), Takween Advanced Industries Co.(1201.SA) announced its Interim financial results for the six months ended on June 30, 2026.

Year-on-Year Performance Drivers

For H1 2026, sales/revenue increased 49.144% YoY to SAR 422.65 million (from SAR 283.38 million in H1 2025), primarily driven by the consolidation of SAAF's revenue into Takween Group's financial statements effective January 2026, along with growth in sales volume and higher selling prices. Despite the revenue growth, the net loss attributable to shareholders widened by 74.848% YoY to SAR 62.19 million (from SAR 35.57 million in H1 2025), mainly due to higher cost of revenue as a percentage of revenue, increased general and administrative expenses, higher selling and distribution expenses, recognition of net expected credit losses, impairment losses on property, plant and equipment, higher finance costs, lower net other income, and losses from the remeasurement of the previously held interest in an equity-accounted investment related to the SAAF acquisition. These negative factors were partially offset by the revenue increase, the absence of equity-accounted investment losses recognized in the prior period, and a gain on bargain purchase arising from the SAAF acquisition.

Quarter-on-Quarter Performance Drivers

QoQ revenue declined 5.401% to SAR 205.46 million (from SAR 217.19 million in Q1 2026), primarily due to supply chain challenges and raw material availability constraints. The net loss deepened by 127.35% QoQ to SAR 43.19 million (from SAR 19.00 million), driven by lower revenue, higher general and administrative expenses, recognition of net expected credit losses (versus a reversal in Q1), impairment losses on property, plant and equipment, higher finance costs, and higher Zakat and income tax expenses, as well as the absence of the bargain purchase gain on SAAF acquisition that was recognized in Q1 2026. Partial offsets included an improved cost of revenue as a percentage of revenue, lower selling and distribution expenses, and higher net other income.

Other Items

Takween Advanced Industries Co.'s interim financial statements for the six months ended June 30, 2026 received an unmodified conclusion from the external auditors; however, the auditors included a Material Uncertainty Related to Going Concern paragraph, drawing attention to Note (2), which states that the Group incurred net losses of approximately SAR 62.19 million during the period (H1 2025: SAR 35.57 million), accumulated losses of approximately SAR 562.57 million exceeding 50% of share capital (H1 2025: SAR 500.38 million), and current liabilities exceeding current assets by approximately SAR 404.3 million (H1 2025: SAR 268.61 million), with the auditors noting that "these events or conditions, along with other matters, indicate that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern." Accumulated losses stood at 73.57% of share capital as of June 30, 2026. Total shareholders' equity (after deducting minority equity) declined 64.056% to SAR 128.095 million from SAR 356.376 million in the prior year period. Loss per share for H1 2026 was SAR 0.81 (H1 2025: SAR 0.47), calculated based on a weighted average of 76.465 million shares. To address the accumulated losses, the Board of Directors recommended at its June 23, 2026 meeting that the Extraordinary General Assembly approve a capital reduction from SAR 764.65 million to SAR 245.27 million through the cancellation of SAR 519.38 million to offset accumulated losses, followed by a subsequent SAR 400 million rights issue to strengthen the financial position, support liquidity and working capital, repay part of bank obligations, and enable future operational and strategic plans; Albilad Capital was appointed as Financial Advisor, Lead Manager and Underwriter on July 12, 2026. Additionally, a SAR 56 million legal claim filed by Bawabat Al-Hijaz Al-Dawliya Company resulted in a judgment on May 20, 2026 requiring payment; the Company has filed a petition for reconsideration before the Supreme Court, and based on management's assessment supported by legal counsel, the likelihood of an outflow of economic resources is considered not probable, and accordingly no provision has been recognized; the Company also holds a legally binding indemnity undertaking from a major shareholder covering certain pre-acquisition liabilities.

Original announcement:

https://www.saudiexchange.sa/wps/portal/saudiexchange/newsandreports/issuer-news/issuer-announcements/issuer-announcements-details/?anId=97557&anCat=1&cs=1201&locale=ar

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