Al Yamamah Steel leans into power and renewables as the construction pipeline thins

Al Yamamah Steel Industries is now more an energy company than a steel one. Electricity and renewables generate around 60% of the Tadawul-listed firm’s revenue, CEO Sahal Al Thobaiti told EnterpriseAM on the sidelines of Big 5 Construct Saudi. The shift has played out over three years as the company moved away from its traditional construction materials base toward steadier, more diversified income, he explained.

Why it matters: The construction materials supplier now pulling 60% of its revenue from power and renewables has landed on steadier ground just as its core market wobbles. Al Thobaiti didn’t sugarcoat the pressure. “Liquidity volume right now is a bit weak,” he said, while “project volume right now, under current conditions, has some shortage in tendered projects.” Add the higher ins. and shipping costs tied to regional instability, and contractors and suppliers across the sector are feeling the squeeze — the kind of environment where a diversified revenue base earns its keep.

The data backs up the play: The construction pipeline lost steam in July, with just 11 contracts worth SAR 9.6 bn awarded, according to the Saudi Contractors Authority. That’s less than half the 23 projects projected in its June outlook and well below June’s SAR 29.5 bn across 25 contracts and May’s SAR 30 bn+.

The tougher backdrop hasn’t yet dented earnings: Al Yamamah’s net income reached SAR 148 mn in the nine months ended June 2026, up from SAR 42 mn, while revenue rose 6.6% y-o-y to SAR 1.6 bn.

The company has also set its sights abroad: Al Yamamah is studying prospects in new sectors and export markets, including Europe and the Americas. “No divestments so far, but partnerships may happen in the future,” Al Thobaiti said.

And it’s keeping funding options open: For its next leg, Al Yamamah is considering a mix of funding routes as it evaluates future projects, including internal funding, commercial bank loans, and financing from the Saudi Industrial Development Fund. Capital markets could also come into play. “All options are on the table; nothing is final yet, depending on the project,” Al Thobaiti said when asked whether bonds or sukuk issuances were under consideration.

REMEMBER- Al Yammamah has been working on bringing billets in-house. The company last week secured SAR 500 mn in seven-year, shariah-compliant financing from Arab National Bank for a new billet manufacturing plant under its rebar subsidiary, following a SAR 270 mn equipment contract awarded to Italy’s Danieli in July. Due for completion by 2029, the plant will let Al Yamamah produce billets, the semi-finished steel used to make rebar, in-house rather than relying entirely on external suppliers.