Acwa’s results soften as expansion across assets and markets continues

Acwa Power reported a softer start to 2026, with net income down 19.3% y-o-y to SAR 344.8 mn, according to its 1Q 2026 earnings (pdf). Still, revenues edged up 2.8% y-o-y to SAR 2 bn.

What hit the books: The y-o-y drop was largely driven by a high base in 1Q 2025, when development and construction revenues were boosted by exceptionally large project fees. This was compounded by a SAR 84 mn revenue dispute at the Al Kahfah and Ar Rass 2 solar plants in Saudi Arabia, where temporary grid dispatch limits restricted full capacity. On the upside, lower finance costs — helped by the absence of prior-year derivative losses — softened the impact.

Acwa has been aggressive this quarter, adding 0.77 GWh of battery storage and 0.6 mn cbm/d of desalination capacity during the quarter. It also advanced portfolio consolidation with the SAR 777 mn acquisition of Badeel’s 32% stake in Shuaibah Water and Electricity Company, lifting its effective ownership to 62%. Regionally, it secured its first greenfield project in Kuwait (Az-Zour North Phase 2 & 3), closed financing for the Nukus 2 wind project in Uzbekistan, and brought Rabigh 4 IWP and the Riverside PV + BESS project in Ukraine into commercial operation.

Scale is doing what scale does: Acwa’s portfolio stood at SAR 455 bn in assets under management across 109 projects as of end-March, with 95.7 GW of gross power capacity — 54.7% from renewables — and 9.7 mn cbm / d of desalination capacity. That footprint is set to expand further, with 32 projects under construction adding 44.2 GW of power and 2.6 mn cbm / d of water capacity.

Looking ahead: Recently appointed CEO Samir J. Serhan noted that the war had “no material adverse impact on our operational or financial performance to date.” However, the long-term impact of sustained disruptions remains to be seen.

Luberef’s by-products help offset softer oil margins

Saudi Aramco Base Oil Company (Luberef) posted a 16.5% y-o-y rise in net income to SAR 258 mn in 1Q 2026, as higher by-product margins and sales volumes offset softer base oil margins and volumes. Revenue, meanwhile, edged up 1.4% y-o-y to SAR 2.2 bn over the same period.

The company leaned into regional expansion during the period, entering Qatar, Bahrain, and Kuwait as part of its 2026 GCC growth strategy. At the same time, it continued to scale up its GIII base oils under the aramcoULTRA brand and to pursue OEM approvals with major additive companies, CEO Samer Abdulaziz Al Hokail said in its earnings release (pdf).

What’s next? The Growth II project is currently 71% complete and remains on track for delivery in 2H 2026, Al Hokail said. The company is also finalizing a replacement feedstock agreement under the Jeddah continuity framework to secure the GI base oil supply.

Saudi Chemical capitalizes on financial optimization

Saudi Chemical leaned on balance sheet gains to protect margins in 1Q 2026, posting a 5.9% y-o-y increase in its net income to SAR 87.2 mn in 1Q 2026. An increase in sales volumes also lifted revenues by 5.1% y-o-y to SAR 1.7 bn.

Growth was driven by tighter financial management and a sales boost. Lower-than-expected credit losses on trade receivables, reduced finance costs, and gains recognized from the revaluation of derivative financial instruments tied to interest rate exposure all helped buoy margins.

MBC leans on Shahid’s income and Ramadan demand

MBC Group saw weaker advertising and project finalization in 1Q, partially offset by stronger Ramadan demand and MBC Shahid’s solid income. The company reported a 14.6% y-o-y decline in net income to SAR 198 mn in 1Q 2026, according to its Tadawul disclosure. Revenue declined by 22.9% y-o-y to SAR 1.6 bn during the same period, according to its earnings (pdf).

Behind the performance: The drop was mainly due to weaker advertising demand amid ongoing geopolitical tensions and the expiration of some broadcasting and technical services contracts. This was partly offset by stronger profitability from MBC Shahid (SAR 47.4 mn) and robust Ramadan-driven content demand.

Geopolitics will still have an impact: Geopolitical disruptions and the resulting macroeconomic developments are expected to continue affecting MBC’s advertising demand, government spending priorities, and operational conditions across the region this year. The current situation at Hormuz is relatively calm as Washington awaits Tehran’s response to its latest proposals.

What’s next? The group announced its segment projections, with its broadcasting and other commercial activities’ net income margins expected to be between 7-9% in 2026, recovering to 20% to 15% over the medium term. MBC Shahid is expected to break even in 2027, while media and entertainment profitability will continue to be stable, with net income margins between 2-4%.

Medgulf lifted by health and motor sectors amid post-merger gains

Mediterranean and Gulf Ins. and Reins. (Medgulf) rebounded in 1Q 2026. The insurer’s bottom line jumped 84.6% y-o-y to SAR 36.2 mn during 1Q 2026, while revenue climbed 25.1% y-o-y to SAR 1.3 bn during the same period, according to its Tadawul disclosure. The recovery comes after a difficult 2025, when net income fell 59.7% y-o-y to just SAR 41.1 mn for the full year.

Capital market gains and core ins. momentum both supported the uplift, with investment income rising 84% and underwriting performance improving, alongside 11% growth in gross written premiums. Gains were broad-based across motor (up SAR 160 mn) and health (up SAR 94.6 mn), helping drive net ins. service results to nearly three times their level a year earlier.

Fruits of the merger? Medgulf merged with Buruj Cooperative Ins. in October to boost its solvency and create the fourth-largest ins. player in the Kingdom. Since the consolidation, its balance sheet has improved, with accumulated losses narrowing to 5.6% of capital in March from 8.2% in December.

Bawan declines in 1Q

Bawan’s quarterly results were dragged down by weaker core segments and geopolitical disruptions, according to its Tadawul disclosure. Net income declined by 65.2% y-o-y to SAR 51.9 mn in 1Q 2026, while revenue increased by 13.3% y-o-y to SAR 1 bn. A drop in regional demand and greater pricing pressure squeezed the firm’s margins.

Al Hammadi’s operating costs offset its strong pharma and retail income

Our friends at Al Hammadi Holding faced elevated operating costs despite exceptional pharma and retail performance. The company’s net income declined by 23.9% y-o-y to SAR 56.2 mn in 1Q 2026, according to its Tadawul disclosure. Revenue rose by 5.7% y-o-y to SAR 319.1 mn during the same period.

The decline was caused by a sharp increase in operating costs and credit provisions. Total G&A, selling and marketing expenses increased by 41.5% y-o-y to SAR 36.9 mn, driven by higher advertising costs linked to the Al Hammadi Hospitals Group rebranding.

Still, pharma and retail sales bolstered performance amid expansion plans. The revenue increase was supported by higher income from the pharma products segment, which rose by 17.7% y-o-y to reach SAR 72.2 mn, and a rise in retail sales through the firm’s subsidiary.

Dividends: Al Hammadi’s board of directors recommended distributing SAR 32 mn in dividends for this quarter on 14 June, equivalent to SAR 0.20 per share, according to an announcement.

Sports broadcasting and one-off gain drive SRMG’s 1Q performance

Saudi Research and Media Group (SRMG) started 2026 on a steady note, with net income rising 6.9% y-o-y to SAR 33.1 mn in 1Q 2026, according to a Tadawul filing. Revenue increased 18.3% y-o-y to SAR 769.6 mn, supported by stronger sports broadcasting activity and a one-off structural gain in its industrial arm.

Growth was led by the publishing, visual, and digital content segment, boosted by broadcasting major events, including the Custodian of the Two Holy Mosques Cup, Saudi Pro League, and Saudi Super Cup, alongside solid momentum in PR and advertising. The bottom line also benefited from a SAR 31.4 mn one-off gain from converting loans to equity in the printing and packaging segment, partially offsetting softer volumes in that business.

Mixed signals in the fine print: Despite higher net income, total comprehensive results swung to a SAR 30.5 mn loss versus a SAR 38 mn gain a year earlier. Equity also took a 10.7% y-o-y hit to SAR 2.9 bn, though retained earnings remained solid at SAR 2.4 bn, supporting the group’s ongoing shift toward digital and sports-led content.