Ad weakness and expansion costs push Al Arabia, MBC, and Jahez into the red

Unfinished ad networks deepen Al Arabia’s losses

Outdoor advertising firm Arabian Contracting Services (Al Arabia) saw its 3Q net loss nearly triple y-o-y to SAR 241.9 mn from SAR 82.5 mn, as weaker ad spending collided with the cost of running newly handed-over advertising sites, according to a Tadawul filing. Revenue fell 16.2% to SAR 346.8 mn, gross income swung to an SAR 68 mn loss from an SAR 111.9 mn gain, and operating income turned to an SAR 134.4 mn loss from an SAR 33.5 mn gain.

What’s weighing on the business? Regional geopolitical tensions prompted some clients to cancel advertising campaigns or cut their budgets, hitting revenue. At the same time, Al Arabia is carrying higher lease and depreciation costs on new sites whose wider networks are still incomplete, adding to the pressure on margins.

The YTD picture is dimmer: Al Arabia swung to an SAR 447.5 mn net loss in 9M from net income of SAR 47.2 mn a year earlier, with project-related finance costs adding to the drag. Revenue dropped 25.2% to SAR 1.03 bn. Gross income all but vanished, down 98.5% to SAR 8.1 mn, and operating income turned to an SAR 139.7 mn loss from an SAR 356.8 mn gain. Shareholders’ equity fell 22.4% y-o-y to SAR 1.1 bn.

REMEMBER- Al Arabia rescheduled nearly SAR 1.8 bn in short-term bank debt — roughly half of its SAR 3.52 bn in credit facilities — into medium- and long-term loans in late October, and secured an extra SAR 300 mn facility from Saudi Awwal Bank. The rescheduling came after the reporting period, so the loans will be reclassified as long-term in 4Q.

Al Arabia’s slide slips into MBC’s books

MBC Group sank deep into the red in 3Q 2026 as a markdown on its stake in Al Arabia and a collapse in broadcast advertising overshadowed a turnaround at Shahid. Net loss attributable to shareholders reached SAR 445.3 mn, against an SAR 19.7 mn gain a year earlier, while revenue fell 16.1% y-o-y to SAR 679.8 mn, according to a Tadawul filing and earnings release (pdf).

The group’s stake in Al Arabia did the most damage, while Shahid provided some relief. Investment gains fell SAR 333 mn y-o-y on unrealized fair-value losses, chiefly an SAR 364.6 mn loss on MBC’s investment in Al Arabia. Excluding investment-related movements, MBC says it posted a normalized net loss of SAR 82.7 mn, against normalized net income of SAR 44 mn a year earlier. Meanwhile, Shahid’s revenue rose 10.2% y-o-y to SAR 353 mn on higher subscription income, and its operating income contribution improved by SAR 29 mn as it swung to 3Q net income of SAR 3.2 mn from an SAR 26 mn loss. MBC now expects Shahid to end 2026 in the black, a year earlier than the 2027 break-even it flagged in August.

Advertising is still sliding: Revenue from broadcasting and other commercial activities fell SAR 197 mn as continued geopolitical tensions hit advertising demand and some broadcasting and technical-service contracts ended. The segment’s operating income fell SAR 163 mn, pushing the group to an SAR 49.7 mn operating loss from operating income of SAR 35.8 mn.

Nine-month results tell a similar story: MBC swung to an SAR 509.8 mn net loss attributable to shareholders from SAR 402.6 mn in net income a year earlier, while revenue declined 22.8% to SAR 2.96 bn. Investment gains fell SAR 628 mn, including SAR 575.5 mn in fair-value losses on Al Arabia, and operating income dropped 60.8% to SAR 133.9 mn. Shahid continued to buck the trend, with revenue up 15.9% to SAR 1.18 bn and earnings up SAR 81 mn.

Jahez slips into the red

Food delivery platform Jahez swung to a net loss of SAR 1.9 mn in 3Q from net income of SAR 62.6 mn a year earlier, as fee pressure in Saudi Arabia and launch costs in new markets outweighed a 40.4% jump in revenue to SAR 748.5 mn, according to a Tadawul filing. The revenue growth came from its international platforms, led by Qatar-based Snoonu, which it consolidated in 4Q 2025. Revenue from its Saudi delivery platforms fell 4.7% to SAR 422.8 mn.

Growing, but earning less: Gross merchandise value — the total value of orders placed on its apps — rose 45.2% y-o-y to SAR 2.4 bn in 3Q, driven by a 33.1% increase in orders to 34.7 mn and a 9.1% rise in average order value to SAR 70.2, according to the company’s earnings release (pdf). But gross income rose 8.1% to SAR 143 mn as its gross margin narrowed to 19.1% from 24.8%, and Jahez swung to an operating loss of SAR 12.9 mn from operating income of SAR 42.6 mn.

The biggest hit came at home, where net income from Saudi delivery platforms — the group’s main earner — fell to SAR 47.7 mn from SAR 84.3 mn as competition pushed down delivery fees, alongside a zakat charge this quarter against a credit a year earlier. Abroad, despite the revenue gains, international platforms’ net loss widened to SAR 32.6 mn from SAR 12.8 mn, mainly on launch-phase losses in Kuwait and Oman and new Kuwaiti rules capping merchant commissions and delivery fees, the company said. Losses from other activities also widened to SAR 12.8 mn from SAR 2.5 mn as Jahez restructures Marn, its POS software business.

For 9M 2026, the company reported a net loss of SAR 28.5 mn compared with a net income of SAR 121.5 mn in the same period last year, while revenue increased 37.5% y-o-y to SAR 2.24 bn.

Fast growth, slower earnings for Go Telecom

Etihad Go Telecom’s wholesale business kept revenue growing in 2Q FY 2026/27 (July-September), but rising costs kept its bottom line from keeping pace. Net income rose 10.8% y-o-y to SAR 72 mn, while revenue climbed 19.8% to SAR 563 mn, according to a Tadawul filing. Gross income increased 14.2% to SAR 153 mn, while operating income rose 16.7% to SAR 77 mn.

Wholesale did the heavy lifting as revenue from the segment jumped 53% y-o-y, adding SAR 99 mn, while B2B revenue grew 5%, SAR 11 mn, supported by government and private-sector projects. But costs absorbed most of the gain: Cost of revenue rose SAR 74 mn, eating up most of the SAR 93 mn increase in revenue. Higher selling, marketing, and administrative expenses, together with lower other income, took a further SAR 13 mn, partly offset by an SAR 5 mn cut in expected credit loss provisions. The company tied the higher costs to its expansion, saying efficiency measures helped limit the hit.

The first half shows a similar squeeze: Net income rose 10.2% y-o-y to SAR 140 mn in 1H FY 2026/27, less than half the 22.4% growth in revenue to SAR 1.11 bn, as higher cost of revenue absorbed SAR 169 mn of the SAR 203 mn revenue increase. The gap between revenue and earnings growth was also evident in Go Telecom’s FY 2025/26 results, when net income rose 17.7% against a 31.2% increase in revenue.

Shrinking D360 losses cushion Derayah’s 3Q

Derayah Financial’s bottom line edged higher in 3Q 2026, largely because its share of losses from digital bank D360 narrowed while operating earnings barely grew. Net income increased 5.7% y-o-y to SAR 105.4 mn, while revenue inched up 1.8% to SAR 242.2 mn, according to a Tadawul filing. Operating income was flat, up 0.5% to SAR 138.5 mn, as spending on technology, product development, and marketing lifted operating expenses 3.5% to SAR 103.7 mn.

D360 made the difference: Derayah’s share of the digital bank’s losses narrowed to SAR 30.8 mn from SAR 36.1 mn a year earlier, an SAR 5.3 mn improvement that accounts for most of the SAR 5.7 mn rise in net income. The brokerage committed SAR 100 mn to D360’s capital increase earlier this year, which is expected to reduce its stake in the bank to 16.35% upon completion, from 20.4%.

The 9M picture is weaker: Net income fell 2.7% y-o-y to SAR 303.2 mn, despite revenue growing 4% to SAR 710.8 mn. Operating expenses rose 14.9%, pushing operating income down 3.1% to SAR 399.9 mn. The revenue mix is shifting: Brokerage revenue declined despite a 12% increase in traded value to SAR 383 bn, which Derayah attributed to its introduction of zero-commission trading on Saudi equities and lower margin-financing income. Asset management also fell, which the firm blamed on geopolitical uncertainty delaying several planned fund launches, particularly in real estate. Special commission income helped offset the decline, rising 49% to SAR 206 mn, according to the company’s earnings release (pdf).

DIVIDENDS- Derayah's board approved an SAR 80.75 mn payout for 3Q 2026, equivalent to SAR 0.33 per share, according to a separate Tadawul filing. It will be paid on 25 November to shareholders holding stocks at the close on 16 November.

MIS’ data-center boom comes at a cost

Al Moammar Information Systems (MIS) saw third-quarter net income decline 17.3% y-o-y to SAR 20.8 mn, as the financing and credit provisions that came with its expansion offset a more than threefold increase in revenue to SAR 951.8 mn, up 239% y-o-y. Data-center megaprojects and its ICT core business drove the growth, according to a Tadawul filing.

Where the bottom-line went: The operation itself is scaling cleanly — operating profit rose 64.9% y-o-y to SAR 64.1 mn. The drag sat below the operating line. Finance costs climbed SAR 14.09 mn, tied directly to the data-center mega-projects, while the fair value of investments swung to a SAR 10.5 mn loss from a SAR 6.5 mn gain a year earlier. A SAR 28.4 mn noncash provision for expected credit losses did the rest.

REMEMBER- The build-out’s name is Humain: MIS locked in a fivefold expansion of its data-center contract with Humain in September, lifting planned capacity to 250 MW from an initial 50 MW under an agreement worth around SAR 8.8 bn. It is being executed in phased work orders, with the first four announced by October — the second alone worth more than 1.35x MIS’s full-year 2025 revenue. That contract is the engine behind both the revenue surge and the finance costs now weighing on profit.

The nine-month picture holds the same shape: Revenue rose 88% y-o-y to SAR 1.9 bn and operating profit gained 46.9% to SAR 143.6 mn, yet net income slipped 16.2% to SAR 76.4 mn.