Maharah sees better margins, holds 15% market share: CEO

Argaam

17-05-2025

Maharah Human Resources Co.'s profit margins in key segments were weighed down in the first quarter of 2025, CEO Abdulaziz Al-Kathiri told Argaam in an interview.
The impact was due to intensified competition in the human resources market—particularly in individual services—along with the impact of the company's expansion strategy in the business sector, which aims to boost market share and retain strategic clients. These factors altogether hurt pricing levels and profit margins.
Al-Kathiri explained that the decline in margins within the individual services segment during the first quarter was exceptional and was primarily ascribed to non-recurring seasonal costs. He emphasized that this impact is not expected to persist throughout 2025.
Maharah has a promising growth strategy focused on reinforcing its leadership position and maintaining its market share, with expectations for improved profit margins in the upcoming periods—particularly in the individual segment (hourly service), which is witnessing significant growth that is expected to positively reflect on the company's profitability.
Regarding the company's subsidiaries, Al-Kathiri stated that Maharah is currently working on evaluating suitable solutions to enhance their performance. He pointed out that the largest negative impact came from Nabd Logistics Services Co., which recorded losses in the first quarter. Following a comprehensive review, the recommendation was made to proceed with its liquidation.
Additionally, efforts are underway to minimize potential losses in other subsidiaries with the goal of reaching a breakeven point, which would support the improvement of gross margin in the remaining periods of 2025.
On market share, Al-Kathiri affirmed that Maharah continues to lead the human resources sector in terms of revenue and net profit, estimating the company's market share in the individual and business segments at between 13% and 15%. He noted that this is currently among the highest in the market, though subject to change depending on overall market growth.
Below is the full interview:
Q. What is your plan to address the losses recorded in certain segments, such as logistics?
A. As part of its 2025 strategy, Maharah focuses on improving the performance and results of its subsidiaries. Since acquiring or establishing some of these companies, Maharah has implemented development plans to cut losses and maximize the value added of these investments, in a way that enhances the integration of products and services supporting the company's core activities.
Maharah conducted a comprehensive study of the performance of its subsidiaries and affiliates, analyzing their financial results in light of current performance and future plans. This evaluation serves as a foundation for making strategic decisions regarding whether to continue or liquidate these businesses, if necessary.
Recently, Maharah announced on Tadawul the liquidation of Nabd Logistics Services Co. after studying the feasibility of its continuation. This decision is considered a bold and positive step given the current results of the logistics sector. While the decision is not expected to have a material impact on Maharah, it will help alleviate the negative impact on its profitability resulting from Nabd's losses, which amounted to SAR 5.2 million in Q1 2025 and SAR 16 million in 2024.
Q. How do you see demand for human resources and facilities management services in the second half of 2025?
A. With the major government projects and the global events the Kingdom is preparing to host in the coming years—along with the pipeline of projects—demand in the human resources sector is expected to grow significantly, surpassing previous periods. Internally, intensive efforts are being made to expand market share.
As for the facilities management sector, there has been an improvement in financial performance through reduced losses and lower general and administrative expenses. This improvement is attributed to the restructuring of contracts and current projects. The company also recently received a top-tier rating from a classification agency, which aims to enhance its opportunities to secure large-scale projects. Additionally, the company is entering new areas within the healthcare sector, such as medical equipment maintenance, as well as projects related to the petrochemical industry. The company is expecting to see growth starting from Q4 2025 and continuing into 2026.