On 2026-08-05 08:07:53 (Saudi Time), United Cooperative Assurance Co. announced its Interim financial results for the six months ended on June 30, 2026.

Year-on-Year Performance Drivers

Insurance revenues for the current period (six months ended 30 June 2026) declined 56.096% YoY to SAR 188.97 million from SAR 430.43 million, principally due to a decline in business, with gross written premiums falling 59% to SAR 201.31 million from SAR 494.33 million in the same period of last year. Despite the sharp revenue contraction, the net loss after Zakat attributable to shareholders narrowed significantly by 92.621% YoY to SAR 7.74 million from SAR 104.86 million, primarily driven by a substantial decrease in insurance service expenses, which also shifted the Result of Insurance Services from a loss of SAR 6.71 million to a profit of SAR 39.00 million. However, investment results turned negative at SAR -2.27 million compared to a gain of SAR 6.71 million in the prior period, partially offsetting the improvement in insurance operations.

Quarter-on-Quarter Performance Drivers

QoQ insurance revenues declined 12.312% to SAR 88.29 million (from SAR 100.69 million in the prior quarter), primarily driven by a decrease in earned premium. Despite lower revenues, the net loss attributable to shareholders narrowed significantly by 87.297% QoQ to SAR 0.87 million (from SAR 6.87 million in the previous quarter), mainly due to a reduction in insurance service expenses, which also drove the Result of Insurance Services up 160.473% QoQ to SAR 28.18 million. However, the investment results swung to a loss of SAR 3.46 million from a gain of SAR 1.18 million in the prior quarter, partially offsetting the improvement.

Other Items

The external auditors issued a qualified (conservation) opinion on the interim condensed financial statements for the six months ended 30 June 2026. The auditors drew attention to the Company's goodwill of SAR 78.4 million, noting that the impairment assessment performed by management "was based on market capitalisation without sufficient adjustments or reconciliation and is therefore not consistent with the requirements of IAS 36 Impairment of Assets and IFRS 13 Fair Value Measurement," and that "limited consideration has been given to value in use based on future cash flows," concluding that "the carrying amount of goodwill may be materially overstated as of 30 June 2026." In response, the Company clarified that it appointed a Taqeem-certified external valuation specialist, whose assessment concluded that the recoverable amount of goodwill exceeded its carrying amount as at 31 December 2025, and characterized the qualified conclusion as arising from "a difference in professional judgment of the management and its independent expert, with the auditors, regarding the application of the impairment assessment methodology." A material uncertainty regarding going concern was also flagged, with the auditors noting the Company incurred a net loss of SAR 7.73 million and net operating cash outflows of SAR 14.39 million for the six-month period, and that accumulated losses of SAR 459.58 million exceeded the Company's share capital — representing 115% of capital as at 30 June 2026 — with the Company confirming it will continue to apply procedures applicable to listed companies whose accumulated losses exceed 50% of capital. Additionally, the auditors noted that the Company has not complied with the applicable requirements for maintaining the solvency ratio as per Article 66 of the Implementing Regulations of the Cooperative Insurance Companies Control Law. Total shareholders' equity stood at SAR 16,842 thousand as of 30 June 2026, a decline of approximately 89.851% from SAR 165,961 thousand at the end of the same quarter of last year. Loss per share for the current period was SAR (0.19), compared to SAR (2.62) for the same period of last year.

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