Aramco slashes dividends for 4Q 2024 + expectations for 2025

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Arab leaders endorse Egypt’s USD 53 bn reconstruction plan for Gaza

Good morning, friends, and welcome to a very busy Wednesday at home and across the region. The news cycle here at home is dominated by Aramco’s earnings and accompanying decision to slash its dividend payouts for 4Q 2024 — defying analyst expectations that the oil giant would maintain its dividends. We also have the latest PMI reading from Riyad Bank, as well as a closer look at the private equity landscape in Saudi Arabia last year.

^^ We have chapter and verse on these stories and more in this morning’s news well, below.

When do we eat? Maghrib is at 5:58pm today in Riyadh. You’ll have until fajr prayers at 4:55am tomorrow to finish your sohour.

HAPPENING TODAY-

HKC Ceramics is ringing the bell on Nomu today: Shares of local marble and porcelain supplier HKC Ceramics (Hedab Alkhaleej Trading Company) will begin trading on the Nomu parallel market today, according to a Tadawul statement. The company’s shares will be allowed to fluctuate within a 30% band on the first three days of trading, after which price fluctuations will be capped at 10% as circuit breakers take effect.

REFRESHER- HKC is taking a 10.67% stake to market in a primary offering limited to qualified institutional investors, in a bid to finance its expansion plans and reduce its existing liabilities. The company priced its IPO at SAR 52 per share — the top of the range it was guiding on — after its Nomu offering was 1.7x covered. The final price saw the company raise some SAR 41.6 mn in IPO proceeds, giving it a market cap of SAR 390 mn at listing.

The five-day retail bookbuilding period for Umm Al Qura Development and Construction’s Tadawul IPO kicks off today and will wrap up next Sunday, 9 March. Retail investors can subscribe to up to 2.5 mn shares with a minimum of 10 shares each. The final decision is set for Thursday, 13 March, with 13.08 mn shares reserved for retail investors.

⚠️WEATHER- A chance of medium to heavy thunderstorms across most areas of the Kingdom until Thursday, including Madinah, Makkah, Jeddah, Al Taif, and Riyadh.

Riyadh: 20°C daytime / 10°C overnight
Makkah: 32°C daytime / 21°C overnight
Madinah: 28°C daytime / 14°C overnight

GAZA RECONSTRUCTION PLANS-

Arab leaders endorsed Egypt’s USD 53 bn reconstruction plan for Gaza during yesterday’s emergency Arab League summit held in Cairo. The plan took a month to formulate as a counter to US President Donald Trump’s plan to displace Gaza’s citizens against the backdrop of a faltering ceasefire agreement.

The plan at a glance: Under the five-year plan — outlined in a 112-page document — some 400k housing units, an airport, a commercial port, beach hotels, and a technology hub will be constructed, Al Qahera News wrote. It will include urban areas that utilize renewable energy, renovated agricultural lands, and industrial zones. The reconstruction process will happen across two phases — the USD 20 bn first phase will take two years to complete and the second USD 30 bn phase will be done in two and a half years.

A USD 3 bn “recovery phase” will precede the reconstruction process, during which rubble and unexploded weapons will be removed and temporary housing will be provided. That phase will also include the restoration of partially damaged residential buildings. The people of Gaza will have access to temporary housing throughout the reconstruction process, according to the plan.

A non-factional Palestinian committee will oversee the Strip for a transitional six-month period. Meanwhile, Egypt and Jordan will help train security forces in Gaza and the proposal of having a UN-backed international peacekeeping mission on ground remains under consideration.

Who’s paying? A special fund will be set up for the reconstruction of Gaza, El Sisi said, calling on the leaders in attendance, as well as the regional and international communities, to contribute to it.

WATCH THIS SPACE-

#1- Homegrown delivery app Ninja is in talks for a potential fundraising round that would value the company at USD 1 bn, Bloomberg reports, citing sources it says have knowledge of the matter. Riyadh Capital is leading the investment round, which is expected to close this month, the business information service says. The app (App Store | Google Play) is a 24/7 online supermarket delivering across the Kingdom and was the #1 delivery app in Saudi’s Internet Report by the Communications, Space, and Technology Commission.

The fundraising comes ahead of a planned IPO for Ninja in 2027, with the company currently in talks to go public, although no final decisions on valuation or timeline have been disclosed.

SOUND SMART- Ninja’s planned public debut is the latest in a string of tech unicorns looking at IPOs, Bloomberg notes. Local tech services firm Ejada secured approval from the Capital Markets Authority (CMA) in December to take a 45% stake to market, after reportedly hiring Goldman Sachs and Al Rajhi Capital to arrange a Tadawul IPO that could see the firm valued at up to USD 1.5 bn. Emirati BNPL Tabby also recently raised USD 160 mn in a series E round, bringing its valuation up to USD 3.3 bn. The company reportedly tapped HSBC Holdings, JPMorgan Chase, and Morgan Stanley last month to advise on a potential IPO — first announced in September — targeting a 2025-2026 window. The size of the offer and the timeframe are yet to be determined.

#2- Riyadh Air is still set on track to launch in 2025, with the airline expecting to receive several Boeing aircraft starting 3Q of this year despite global supply chain challenges, CEO Tony Douglas told Airways Magazine. The airline is still working towards securing its Air Operator Certificate (AOC) from the General Authority of Civil Aviation (GACA), with major parts of its first Boeing 787-9 ready for final assembly. Meanwhile, a separately leased 787-9 — outside its original order— will be used for training, certification, and regulatory approvals before serving as backup once operations begin.

REMEMBER- Riyadh Air also placed an order of 60 Airbus A321neos in October which are scheduled to arrive between 2H 2026 and 2030. The startup airline is also to place a new wide-body jet order by 1H 2025 to further expand its fleet, eyeing the Boeing 777X and Airbus A350-1000.

DATA POINTS-

Consumer spending via point-of-sale (PoS) transactions in the Kingdom increased 34.7% w-o-w for the week ending Saturday, 1 March, to c. SAR 17.6 bn, according to the Saudi Central Bank’s report (pdf). The number of weekly transactions was also up 10.1% w-o-w to 231.4k.

The details: Food and beverages was the biggest gainer, rising 74.9% w-o-w in value to SAR 3.3 bn and rising 14.7% in volume to 54.7k. Clothing and footwear came in second, logging an increase of 43.9% in value at SAR 1.3 bn and a 30.8% w-o-w increase in transactions at 8.6k. Riyadh had the highest value of PoS transactions at SAR 5.9 bn, followed by Jeddah at SAR 2.5 bn.

OIL WATCH-

Oil prices slid yesterday, settling “close to multi-month lows” following Opec+’s decision earlier this week to move ahead with plans to raise production next month, Reuters reports. Brent crude futures fell 0.8% to USD 71.04 / bbl, recovering from an intraday low of USD 69.75 / bbl. WTI crude fell 0.2% to USD 68.26 / bbl, according to Reuters.

REFRESHER- Opec+ agreed to stick to plans to revive supply in April following repeated delays, according to a statement on Monday. The group cited “healthy market fundamentals” and a “positive outlook,” but kept the door open for future changes in policy, saying the increase may be paused or reversed depending on market conditions. “This flexibility will allow the group to continue to support oil market stability,” the statement said.

SPORTS-

Vini Jr. wants to stay at Real Madrid amid Saudi interest: Real Madrid forward Vinicius Jr. hopes to renew his contract with the current European champions, highlighting that he is “living the dream of playing with the best players in the world, the best coach, the best president, the best fans,” Reuters quotes him as saying. BBC also had the story.

REMEMBER-The Ballon d’Or runner-up was linked with a EUR 300 mn move to the Saudi Pro League in the summer, which would see the Brazilian player earn EUR 1 bn over five years — making him the highest-paid athlete in the world. The player and the La Liga club are reportedly close to agreeing to an extension, with his potential move to the Kingdom having lost momentum over the past few months.

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THE BIG STORY ABROAD-

Trump is once again dominating the international front pages: US President Donald Trump’s address to Congress — his first since returning to office — saw him outline his administration’s agenda, defend new tariffs, and address the Ukraine-Russia conflict and US policy in the Middle East. (Bloomberg | CNN | AP | The Guardian | Wallstreet Journal | Reuters)

AND IN THE BUSINESS PAGES- Markets continued to digest the latest Trump tariffs throughout trading yesterday until US Commerce Secretary Howard Kutnick suggested the US could ease tariffs on Mexico and Canada, with an announcement coming as soon as today. The news triggered a late-session rally that helped pull the Nasdaq up after it briefly dipped into correction territory — it closed down 0.4%. The S&P 500 closed down 1.2%, while the Dow Jones fell 1.6%. (Reuters | Bloomberg)

The (potential) relief comes after a series of retaliations: Trump’s tariffs — 25% on Canada and Mexico, plus a fresh hike on Chinese goods — sent stocks tumbling as all three countries hit back. Canada hit back with 25% tariffs on USD 30 bn worth of US imports, with plans to extend the levies to another USD 125 bn worth of goods in the coming weeks. China also responded by slapping 10-15% tariffs on USD 21 bn of US agricultural products while imposing export and investment restrictions on 25 American firms.

Aramco's 2024 net income falls 12.4% as dividend slashed for 2025

Saudi Aramco cut its 4Q 2024 dividend to USD 21.36 bn (SAR 80.1 bn), down 31% y-o-y and a far cry from the expectation to maintain its payout of USD 31.1 bn (SAR 116.5 bn), according to disclosure to Tadawul. The decision to reduce its dividends — which analysts had expected would remain stable at USD 31.1 bn (SAR 116.5 bn) — comes as the oil giant reported a declining bottom line during the year.

The dividend breakdown: The 4Q 2024 dividend payout includes a USD 21.14 bn (SAR 79.28 bn) base dividend, up 4.2% y-o-y, and a performance-linked dividend of USD 0.22 bn (SAR 0.82 bn), slashed 98% y-o-y. The distribution date is set for 26 March.

Aramco also plans to reduce its 2025 dividend to USD 85.4 bn from USD 124.2 bn in 2024, it said in its earnings release, citing financial pressure from high payouts and subdued oil prices, which have strained its balance sheet and contributed to its net-debt position. The dividend will include a base payment and a smaller performance-linked portion, Bloomberg reports.

A new payout mechanism: Beginning in 2025, Aramco's performance dividend will be based on remaining freecash flow after core distributions and investments, with the final amount determined after the year's books are closed, according to Asharq Business. Previously, performance-related dividends announced in 2Q 2023 ranged from 50-70% of annual freecash flow, after deducting basic distributions and expenses like investments.

THE FINANCIALS-

Aramco’s net income fell 12.4% y-o-y in 2024 to USD 106.25 bn (SAR 398.42 bn), according to its earnings release. Meanwhile, revenues dipped 0.97% y-o-y to USD 436.61 bn (SAR 1.64 tn). Including other income related to sales, total revenue stood at USD 480.45 bn (SAR 1.8 tn), down 2.9% y-o-y.

What weighed on performance: Aramco’s net income decline was driven by lower revenue, reduced finance income, and a 3.9% rise in operating costs attributed to higher purchases, production, administrative expenses, and impairment charges, despite lower production royalties, it said in its annual report (pdf).

Its realized oil price fell to USD 80.2 / bbl from USD 83.6 in 2023, as rising global production and slowing demand, along with lower crude oil prices, sales volumes, and weaker refined and chemical product prices, further pressured performance, according to CNBC. Increased volumes of refined and chemical products partially offset these impacts, while economic uncertainty in 2024 weighed on hydrocarbon prices and refining and chemical margins.

In 4Q 2024 Aramco’s net income fell 19% y-o-y to USD 22.34 bn, according to Reuters calculations. Its average realized oil price fell nearly 15% y-o-y to USD 73.1 during the quarter. Aramco’s results aligned with analysts' expectations despite incurring approximately USD 6.5 bn in noncash charges during 2024, according to Asharq Business. Analysts polled by Argaam forecasted a 15.4% y-o-y decline in 4Q 2024 revenue to SAR 388.5 bn, while Asharq estimated quarterly net income at SAR 89 bn, down 13.5% y-o-y.

Despite the drop, Aramco is doing better than most: Aramco posted the strongest revenue performance among major oil giants and the second-highest net income, with earnings 1.3 times greater than the combined net income of the five largest competitors, according to Aleqtisadiah. Its 1% revenue drop was the smallest among major energy firms, while its net income — despite falling 12.4% — accounted for 56% of the top six energy companies' combined earnings.

DATA POINT- Aramco's total borrowings increased to USD 319.3 bn in 2024 from USD 290.1 bn in 2023, while its net debt decreased from USD 102.8 bn to USD 78 bn. Cash flow from operating activities fell to USD 135.7 bn, down from USD 143.4 bn, and free cash flow declined to USD 85.3 bn from USD 101.2 bn. The company’s gearing ratio rose to 4.5% from -6.3% a year earlier.

Highlights of 2024: Aramco’s subsidiary Sabic transferred its Hadeed ownership to PIF, receiving SAR 1.2 bn in cash and SAR 4.8 bn in deferred consideration. Aramco acquired a 100% stake in Esmax for SAR 1.4 bn and phased a SAR 5.6 bn loan waiver with Sumitomo for Petro Rabigh. In March, the government transferred 8% of Aramco’s shares to PIF affiliates. In June Aramco took EMEA’s largest secondary offering since 2002 to market, raising USD 11.1 bn.

DIVIDEND IMPACT-

The reduction in Aramco's dividend is expected to widen Saudi Arabia’s budget deficit to 4% of GDP from 2.8% in 2024, with reduced government spending expected in 4Q, Reuters quotes Abu Dhabi Commercial Bank chief economist Monica Malik as saying. The record payouts in 2024 were crucial for addressing last year’s shortfall and rising debt, Malik said. The deficit is already under pressure from low oil prices and rising costs for Vision 2030 projects like NEOM city and the 2034 FIFA World Cup, CNBC reports. The government, which holds 81.5% of Aramco, and the PIF (holding 16%) benefit from these payouts, which also support government debt issuance.

Market reax: Saudi Aramco’s shares dropped 2% to SAR 26.85, their lowest since August 2024, Argaam reports. Aramco’s market value stands at USD 1.74 tn, making it the world’s sixth-most valuable company, behind Apple, Microsoft, NVIDIA, Amazon, and Google parent company Alphabet.

THE YEAR AHEAD-

Aramco is well-positioned to meet expected demand growth in 2025, with 3 mn barrels of spare capacity available, Financial Times quotes Aramco CEO Amin Nasser as saying. “If called upon, utilizing 1 mn barrels per day of spare capacity could generate an additional USD 12 bn in operating cashflow based on 2024's average price,” Nasser said. Global oil demand is expected to hit a record in 2024, driven by increased consumption in China and India, with a 1.3 mn bbl / d rise, according to Bloomberg. Nasser expressed confidence that OPEC+’s decision to increase production will benefit Aramco.

Aramco has capital investments of USD 52-58 bn slated for 2025, excluding some USD 4 bn in project financing. In 2024, total capital investments amounted to USD 53.3 bn, including USD 50.4 bn in organic capital expenditures. The company expects to generate additional operating cashflows of USD 9-10 bn from its upstream gas business and USD 8-10 bn from its downstream segment by 2030.

Upcoming projects this year: Nasser expects to launch the Jafurah gas field later in the year. Aramco is focused on expanding LNG and petrochemical projects for growth, according to Al Arabiya. The company is pursuing LNG offtake agreements and exploring liquid-to-chemicals projects but has removed a proposed plant at Ras Al Khair from its plans.

Aramco is scaling up the use of AI across its operations, with Nasser noting the positive impact of DeepSeek, a Chinese AI company, on efficiency and resource use within Aramco, according to the Financial Times. The technology has been installed in Aramco’s data center. Among Aramco’s other AI investments is a USD 1.5 bn partnership with US firm Groq.

Non-oil private sector continues to expand in February — albeit at a slower pace

Non-oil business activity in the Kingdom continued to expand in February on the back of strong customer sales and increased levels of business activity, according to the Riyad Bank Saudi Arabia PMI (pdf). The seasonally adjusted headline figure came in at 58.4 in February, dipping down from the over decade-high reading of 60.5 in January as new business growth cooled slightly.

The new orders subindex fell to 65.4 in February, down from 71.1 in January, according to Reuters. Non-oil firms continued to highlight strong growth in new order volumes, with some 35% reporting an increase in sales in February, compared to just 5% reporting a decline. The rise in demand was partly driven by global markets, as new export business increased sharply, while some companies reported attracting customers through price promotions.

Firms continued to increase their inventory — albeit at a slower pace, with purchasing seeing a slowdown in February. This was attributed to many firms having already accumulated inventory in previous months, Riyad Bank Chief Economist Naif Al Ghaith said.

Input price inflation continued to rise during the month, which was driven by higher material prices and wages. However, the rate of inflation eased slightly in February to its lowest level in four months. Despite higher input costs, the month saw a modest rise in output prices due to competitive pricing pressures.

Employment rose at its fastest pace in 16 months, hitting its second-highest level in over 10 years. Job growth was particularly strong in the manufacturing and services sectors, “which also observed the highest levels of confidence.” This comes as firms look to expand their operational capacity to prepare for growth, and reflects confidence from businesses over future demand, according to Al Ghaith.

Optimism remains high: Business confidence in Saudi Arabia reached its highest level in 15 months, as businesses conveyed optimism over economic growth and government initiatives that could help support their development and expansion. “While the PMI moderated slightly, the underlying indicators suggest that the private sector remains well-positioned for continued expansion, supported by a positive outlook for business activity and market conditions,” Al Ghaith said.

Is strength in the non-oil sector going to be short-lived? “In Saudi at least, we doubt that the strength in its non-oil sector will last as fiscal policy is tightened,” Capital Economics wrote in a note previously seen by EnterpriseAM Saudi. “We think GDP growth will accelerate this year as oil output cuts are unwound, but activity in the non-oil sector is likely to soften on the back of a turn to fiscal consolidation,” Capital Economics’ James Swanston wrote in a separate note. The World Bank, meanwhile, expects “robust activity in the non-oil sector — especially in services — as well as higher oil production and exports,” it said in its latest Global Economic Prospects report.

Saudi Arabia’s private equity activity slows down in 2024, after a 2023 peak

Private equity activity is down, but not out: While Saudi Arabia’s private equity sector experienced a slowdown in 2024 following a strong peak in 2023, larger transactions and sector-specific trends signal continued interest and potential for growth, according to Magnitt’s Saudi Arabia PE report (pdf).

By the numbers: The Kingdom closed out 15 private equity transactions last year, totaling USD 2.8 bn, marking a 27% y-o-y drop in terms of value and a 60% y-o-y decline in terms of volume. Buyout transactions accounted for 82% of all PE activity in terms of value last year — down from 99% in 2023 — across five transactions. Meanwhile, growth investments picked up, accounting for 18% of total PE value in 2024 — up from around 1% in 2023 — across 10 transactions.

MEANWHILE- Saudi Arabia didn’t see any leveraged buyouts (LBO) last year, despite these transactions making a comeback in the US and Europe. The absence of LBOs is attributed to “the high interest rate environment and a lack of IPOs and exits in the PE sector, which reduces the risk tolerance for lending banks,” Magnitt CEO and founder Philip Bahoshy told EnterpriseAM. LBOs are expected to gain traction in the Kingdom and the wider region as interest rates drop, and the PE sector matures with more successful IPOs and exists in the coming years, Bahoshy added.

Larger transactions are picking up steam: Transactions valued at USD 200 mn or above accounted for 29% of all PE investments in the Kingdom last year — up 15 percentage points from 2023. While acquisitions worth between USD 50-200 mn also made up 29% of the total, their share of the total fell 14 percentage points y-o-y.

LEADING THE PACK-

The telecoms sector captured the lion’s share (81.8%) of PE investment value in Saudi Arabia last year, coming in at USD 2.3 bn. The sustainability sector followed, locking in USD 225 mn in PE capital (8%), and healthcare attracted USD 190 mn (6.7%).

F&B + healthcare saw the highest number of transactions: In terms of volume, the food & beverage and healthcare sectors saw the highest count of PE transactions last year, closing three transactions each, followed by the financial services sector with two transactions, transport and logistics (two transactions), and education (one transaction).

Tawal topped the buyout league table: The Public Investment Fund (PIF) recently wrapped up its USD 2.3 bn (SAR 8.9 bn) acquisition of a 51% stake in telecoms giant Tawal in what was the single largest PE transaction of 2024. The transaction underscores the dominance of large-scale buyouts in the domestic PE scene.

There were fewer players in the game: The number of institutional investors in PE dropped to 13 in 2024 from 19 the previous year, as firms took a more selective approach to PE dealmaking. PIF and TMW were the only investors to execute multiple transactions. Other notable investors last year included the world’s largest asset manager BlackRock, the PIF’s Jadwa Investment, Merak Capital and Green Corp, among others.

SWPC inks SAR 8.5 bn agreement for Jubail-Buraydah water pipeline

SWPC puts pen to paper on SAR 8.5 Jubail-Buraydah water pipeline with Al Jomaih consortium: The Saudi Water Partnership (SWPC) — a fully-owned subsidiary of the Finance Ministry — signed a SAR 8.5 bn agreement commissioning the Jubail-Buraydah independent water transmission pipeline (IWTP) project with a consortium of Al Jomaih Energy & Water, Nesma, and Buhur for Investment, according to a statement. Commercial operation of the pipeline has been pushed to 2Q 2029, after originally being slated to go online in 1Q 2028. The pipeline was awarded under a 35-year build-own-operate-transfer (BOOT) contract.

ICYMI- The consortium was named the preferred bidder in November of last year, securing a levelized water transmission cost (LWTC) of SAR 3.6 per cubic meter. Vision International Investment and Abu Dhabi National Energy Company (Taqa) — a Saudi-UAE consortium — was tapped as the reserved bidder with a less competitive LWTC of just over SAR 5 per cubic meter.

Project profile: The pipeline — which is set to connect the Eastern and Al Qassim regions via a 587-km pipeline with a daily capacity of 650k cubic meters — aims to improve water infrastructure and ensure a sustainable drinking water supply in the Al Qassim and Eastern provinces. It is also expected to improve cost efficiency and reduce electricity consumption. The project includes six strategic storage tanks at Al Shamasiyah and will support reverse flow from Al Shamasiyah through Al Qulayib to Al Jubail where it has three strategic storage tanks. The total storage capacity of these tanks is 1.6 mn cubic meters.

Electrical Industries Co. sees net income double + Modern Mills reports 2024 results

ELECTRICAL INDUSTRIES CO.-

Electrical Industries Co. (EIC) reported a 99.8% y-o-y increase in net income to SAR 401.7 mn in 2024 on the back of rising sales and an expanded and more profitable product offering, it said in a disclosure to Tadawul. Revenues rose by 27.4% y-o-y to SAR 2.0 bn in the same period on the back of rising demand.

ICYMI- EIC named Yousef Al Quraishi (LinkedIn) as its chairman back in December. Al Quraishi is also the CEO of Ali Zaid Al Quraishi and Brothers and chairman of the United Electronics Company (eXtra) and Starlinks.

SAUDI CHEMICAL COMPANY HOLDING-

Saudi Chemical Company Holding saw its net income rise 59.2% y-o-y to SAR 291.2 mn in 2024, according to a disclosure to Tadawul. The company’s revenues grew 31.3% y-o-y during the year to SAR 6.4 bn.

MODERN MILLS-

Modern Mills Company (MMC) saw its net income increase 3.4% y-o-y to SAR 208.7 mn in 2024, with higher gross income margins offsetting a one-off debt-restructuring cost, it said in a disclosure to Tadawul. The company had lined up a SAR 871 mn in a murabaha refinancing agreement in October to restructure debt obligations. Revenue was up 6.6% y-o-y at SAR 1.0 bn in the same period as product development, geographical expansion, and increased market share fed growth into all business segments.

ALSO- The company’s board recommended the distribution of SAR 81.8 mn in dividends for 2024 at SAR 1.0 per share, it said in a separate disclosure. Eligibility will be announced in the next general assembly.

ICYMI-MMC debuted on Tadawul back in March, selling a 30% stake in an IPO that saw strong demand from retail investors with a 22x oversubscription rate. The company’s shares are down c.17% since its debut.

NICE ONE BEAUTY DIGITAL MARKETING CO.-

Nice One Beauty Digital Marketing Co. reported a 120% y-o-y increase in net income to SAR 71.7 mn in 2024, driven by higher efficiency in logistics and inventory management as well as reduced marketing and administrative costs, according to a disclosure to Tadawul. At the same time, revenues rose 28.3% y-o-y to SAR 1.0 bn, supported by an expanding customer base resulting in a 31% rise in sales.

ICYMI- Shares of beauty retailer Nice One began trading on Tadawul’s main market in January, becoming the month’s top performer after rising 60.6% in share value. The company’s shares are up 52.6% since its debut.

HERFY FOOD SERVICES-

HerfyFood Services ended 2024 in the red, reporting a SAR 116.5 mn net loss, according to a disclosure to Tadawul. The net loss was attributed to rising administrative, financial, marketing, selling, and Zakat costs. Meanwhile, the fast-food restaurant chain operator reported a 4.2% y-o-y decline in revenue to SAR 1.1 bn in 2024 on the back of declining sales. Herfy Foods accumulated net losses and declining revenues throughout 1Q 2024, 2Q 2024, and 3Q 2024.

AL ETIHAD COOPERATIVE INS.-

Al EtihadCooperative Ins. saw its net income fall 47.7% y-o-y to SAR 49.1 mn in 2024 on the back of lower returns from its ins. services and net investments, it said in a disclosure to Tadawul. The company logged 23.9% y-o-y revenue growth during the year to SAR 1.5 bn, buoyed by growth in its car ins. segment.

SEERA GROUP HOLDING-

Homegrown travel giant Seera Group Holding reported a net loss of SAR 138 mn in FY 2024, compared to SAR 234 mn in net income the previous year, due to one-off impairments of SAR 291 mn related to hospitality assets that required significant investments to stay operational, it said in an earnings release (pdf). Seera’s adjusted net income grew 2% y-o-y to SAR 153 mn after adjusting for one-off gains. Revenues rose 25% y-o-y to SAR 4.1 bn, driven by strong performance across business segments, including car rental (+40% y-o-y), UK-based travel platform (+25% y-o-y), Almosafer (+17% y-o-y), and Hospitality (+8% y-o-y).

Looking ahead: Seera Group aims to “optimize its portfolio over the medium term, with a focus on increasing shareholder returns,” in a bid to drive sustainable long-term income, the release said. It also plans to reduce debt, enhance financial stability, invest in ventures with at least a 15% internal rate of return, and execute its share buyback program. Additionally, “plans to list Almosafer and divest Portman remain on course,” acting CEO Al Waleed Abdulaziz Al Nasser said.

PIF agrees to anchor Goldman Sachs PE + equity funds

INVESTMENT WATCH-

PIF to anchor Goldman Sachs’ private credit and equity funds in Saudi Arabia and GCC: The Public Investment Fund (PIF) and Goldman Sachs Asset Management signed a non-binding MoU for PIF to anchor new private credit and public equity strategies in Saudi Arabia and the GCC, according to a press release. The funds aim to attract international capital, strengthen the local asset management sector, and support knowledge transfer. The private credit strategy targets GCC-based companies, while the public equity strategy focuses on firms listed on the Saudi exchange or linked to Saudi Arabia. The MoU is subject to regulatory and internal approvals.

PIF-owned firm to invest in Alyoum Bakery: Alyoum Bakery agreed to a new shares issuance as part of an indirect investment by the PIF-owned Saudi Jordanian Investment Company, according to a statement. The investment ticket and size of the stake involved were not disclosed. The transaction is pending regulatory approvals and fulfillment of contract obligations.

About Alyoum Bakery: Established in 2015 as the bakery arm of Sama Jordan Food and Industrial Investments Group, Alyoum Bakery operates in a 30k sqm modern purpose-built facility, processing up to 300 tons of flour per day through seven production lines.

AVIATION-

Saudi Ground Services (SGS) will provide ground handling services for Riyadh Air under a SAR 500 mn contract it was awarded, according to a disclosure to Tadawul. The three-year contract, effective 1 March, includes ramp and passenger terminal services for both domestic and international flights across Saudi Arabia.

FINANCIAL SERVICES-

Tamara receives financial license: Riyadh-based fintech Tamara Finance obtained a full-fledged consumer finance license from the Saudi Central Bank, including buy-now-pay-later services, it said in a press release. This brings the total number of licensed finance companies in the Kingdom to 65, state news agency SPA reports.

HAJJ AND UMRAH-

Pilgrims may exit ihram at Grand Mosque for the first time: The General Authority for the Affairs of the Two Holy Mosques installed five mobile stations in the Grand Mosque courtyard, allowing male pilgrims to complete Umrah rituals and exit the state of ihram, Gulf News reports. The mobile stations are located opposite the Marwa area and equipped with sterilized equipment to offer haircuts as part of an initial trial phase.

Global gov’t borrowing to hit record USD 12.3 tn in 2025 -S&P Global

Global government borrowing is on track to hit a record USD 12.3 tn in 2025, driven by rising defense spending, higher debt-servicing costs, and ongoing fiscal pressures, S&P Global forecasts. Total sovereign debt stock is expected to reach USD 76.9 tn, with global debt levels at 70.2% of GDP — slightly below pandemic highs but still elevated at a time when economies are forced to reckon with “crisis after crisis,” the Financial Times quotes Roberto Sifon-Arevalo, global head of sovereigns at S&P, as saying.

Top borrowers: The US is set to issue nearly USD 4.9 tn in long-term debt this year, driven by “wide fiscal deficits, high interest spending, and substantial debt refinancing requirements.” While the USD’s reserve currency status gives the country “significant flexibility” to manage its debt, S&P’s Roberto Sifon-Arevalo warned that rising borrowing costs are making that harder. It “was fine and sustainable… before the pandemic, now it presents a much bigger problem,” he said.

China, the second-largest borrower, is increasing issuance by over USD 370 bn to USD 2.1 tn to support its struggling economy. Outside the G7 and China, global borrowing is expected to remain broadly stable, S&P said.

Investor concerns are growing, with bond giant Pimco planning to cut exposure to long-dated US debt over “debt sustainability questions,” while b’naire investor Ray Dalio has warned the UK could fall into a “debt death spiral” as borrowing outpaces confidence.

Bigger fiscal risks: As debt-servicing costs climb, governments face increasing constraints on infrastructure and social spending, fueling a global shift toward more fiscally conservative political movements, Sifon-Arevalo is quoted as saying.

MARKETS THIS MORNING-

Asian markets are mostly in the green this morning, after China set its GDP growth forecast at 5%. Mainland China’s CSI 3000 Index rose 0.1%, while Hong Kong’s Hang Seng is up 0.3%. On the other hand, Japan’s Nikkei and Topix are both down in early trading. Over on Wall Street, futures rose slightly after another day of losses, with the Nasdaq inching dangerously close to correction territory.

TASI	11,932	-1.6% (YTD: -0.9%)
MSCI Tadawul 30	1,500	-1.7% (YTD: -0.6%)
NomuC	31,534	-0.5% (YTD: +0.2%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	5.0% repo	4.5% reverse repo
EGX30	30,763	-0.7% (YTD: 3.4%)
ADX	9,591	+0.3% (YTD: +1.8%)
DFM	5,355	+0.5% (YTD: +3.8%)
S&P 500	5,778	-1.2% (YTD: -1.8%)
FTSE 100	8,759	-1.3% (YTD: +7.2%)
Euro Stoxx 50	5,387	-2.8% (YTD: +10.0%)
Brent crude	USD 71.12	-0.7%
Natural gas (Nymex)	USD 4.31	+4.5%
Gold	USD 2,928	+0.9%
BTC	USD 87,656	+1.1% (YTD: -6.3%)

THE CLOSING BELL: TADAWUL-

The TASI fell 1.6% yesterday on turnover of SAR 6.5 bn. The index is down 0.9% YTD.

In the green: Marafiq (+6.7%), Shl (+4.0%) and Malath Ins. (+3.0%).

In the red: Nice One (-10.0%), AlEtihad (-8.4%) and Elm (-6.5%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.5% yesterday on turnover of SAR 24.5 mn. The index is up 0.2% YTD.

In the green: Taqat (+5.9%), Knowledgenet (+5.3%) and Knowledge Tower (+4.5%).

In the red: Fad (-8.5%), Horizon Food (-7.5%) and AlWasail Industrial (-6.4%).

CALENDAR

MARCH

1-30 March: Ramadan.

5-9 March (Wednesday-Sunday): Retail bookbuilding period for Umm Al Qura for Development and Construction’s Tadawul IPO.

13 March (Thursday): Final allocation of shares for Umm Al Qura for Development and Construction’s Tadawul IPO.

18-19 March (Tuesday-Wednesday): Federal Open Market Committee meeting and Summary of Economic Projections.

31 March-3 April (Monday-Thursday): Eid Al Fitr (TBC).

31 March (Monday): Deadline for applying to theReal Estate General Authority’s Regulatory Sandbox Program.

31 March (Monday): Deadline for applying to the World Intellectual Property Organization (WIPO) Global Awards 2025

APRIL

7-9 April (Monday-Wednesday): Sports Investment Forum (SIF), Riyadh.

3-20 April (Thursday-Sunday): AFC Asian U17 Cup.

13-14 April (Sunday-Monday): Human Capability Initiative (HCI) Conference, King Abdulaziz International Conference Center, Riyadh.

13-16 April (Sunday-Wednesday): EdgeX HCI, The Ritz Carlton, Riyadh.

14-16 April (Monday-Wednesday): Future Hospitality Summit, Mandarin Oriental Al Faisaliah, Riyadh.

18-20 April (Friday-Sunday): Saudi Arabian Grand Prix, Jeddah,

21-24 April (Monday-Thursday): Saudi Food Exhibition and Conference, Riyadh.

22-23 April (Tuesday-Wednesday): AAM Middle East, Riyadh.

23-25 April (Wednesday-Friday): Construction and Real Estate Development Exhibition, Jazan.

25 April- 4 May (Friday-Sunday): AFC Champions League Elite Finals

28 April- 30 April (Monday-Wednesday): Automechanika Riyadh, Riyadh International Convention and Exhibition Center, Riyadh.

MAY

May: The World Intellectual Property Organization (WIPO) Global Awards 2025 announces its results.

6-7 May (Tuesday-Wednesday): Federal Open Market Committee meeting.

12-15 May (Monday-Thursday): Saudi Smart Manufacturing, Riyadh International Convention & Exhibition Center.

13-14 May (Tuesday-Wednesday): Global EV & Mobility Technology Forum, The Arena, Riyadh.

19-20 May (Monday-Tuesday): Tech-ecO-System Summit (ToSS), Riyadh.

23 May (Friday): Guns N’ Roses Show, Riyadh.

31 May-5 June (Saturday-Thursday): Hajj.

JUNE

6-9 June ( Friday-Monday): Eid Al Adha.

17-18 June (Tuesday-Wednesday): US Federal Reserve’s Federal Open Market Committee meeting.

26 June (Thursday): 2024-2025 academic year ends.

30 June (Monday): Deadline for Cancellation of Fines and Exemption of Financial Penalties Initiative by the Zakat, Tax and Customs Authority (Zatca).

JULY

July: The World Intellectual Property Organization (WIPO) Global Awards 2025 awards ceremony, Geneva.

31 July (Thursday): Deadline for companies with SAR 2.5 mn or more in 2022/2023 revenues to integrate e-invoicing solutions with Fatoora.

29-30 July (Tuesday-Wednesday): Federal Open Market Committee meeting.

AUGUST

5-17 August (Tuesday-Sunday): Fiba Asian Cup.

SEPTEMBER

15-17 September (Sunday-Tuesday): Money 20/20 Middle East, Riyadh.

17-18 September (Tuesday-Wednesday): Federal Open Market Committee meeting and Summary of Economic Projections.

23 September (Tuesday): Saudi National Day.

OCTOBER

28-29 October (Tuesday-Wednesday): Federal Open Market Committee meeting.

NOVEMBER

3-9 November (Monday- Sunday): WTA Tour Finals.

24-26 November (Monday-Wednesday) The World Advanced Manufacturing & Logistics Saudi Expo, Riyadh Front Convention & Exhibition Centre, Riyadh.

27-30 November (Thursday-Sunday): The World Rally Championship (WRC), Jeddah.

DECEMBER

1-4 December (Monday-Thursday): International Conference on Nuclear Emergencies, Riyadh.

4-13 December (Thursday-Saturday): Red Sea International Film Festval, Jeddah.

December: The Fortune Global Forum 2025, Riyadh.

9-10 December (Tuesday-Wednesday): Federal Open Market Committee meeting and Summary of Economic Projections.

2026

UN Trade and Development Global Supply Chain Forum to take place in Saudi Arabia.

8-12 February (Sunday-Thursday): World Defense Show, Riyadh.

26-29 October (Monday-Thursday): World Energy Congress, Riyadh.

2027

The World Water Forum takes place in Riyadh.

The Ocean Race finishes in Amaala on the Red Sea.

Riyadh-Kudmi transmission line to be completed.

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