SAL achieves SAR153mln net profit in Q1 2025 and advances logistics growth strategy
Highlights for Q1 2025
SAL delivered a strong performance with stable margins, during a year with lower cargo volumes, mainly driven by volume normalization compared to last year's exceptional peak, and changes in product mix.
The Handling division continues to play a pivotal role in revenue contribution, further supported by growing e-commerce demand.
In the Logistics division, SAL has proactively strengthened its business, including prudent credit risk provisioning and introducing more capacity in fulfillment operations. Further to this, we launched the SAL Logistics Zone in northern Riyadh, investing SAR 4 billion which aligns both our growth strategy for the Division and the goals of Vision 2030.
The Company affirmed its commitment to distributing dividends to shareholders, with the Board of Directors recommending a distribution of SAR 114.4 million for the first quarter.
Omar bin Talal Hariri, Chief Executive Officer of SAL, commented:
'The results of the first quarter of 2025 reflect the strength, resilience, and efficiency of our operations, as we navigate a gradual return to stabilized indicators. Although a decline in volumes compared to an exceptional period last year, we maintained our operational discipline and our leading position in cargo handling, which enabled the division to continue being a key contributor to profitability, supported by stable operations and our customers' trust in our services. We continue to work on enhancing performance in the logistics division, focusing on growth and increasing market share, with full confidence in the division's long-term potential. We look ahead with optimism to the next phase of our growth strategy through the SAL Logistics Zone project in Falcon City, Riyadh, with an investment of SAR 4 billion. This project represents a strategic transformation that will boost the division's growth, aligns with the Vision 2030 objectives, and positions SAL ideally to seize the tremendous opportunities offered by the growing logistics sector in the Kingdom. As we continue to strengthen our core capabilities, we remain committed to investing in sustainable growth while maintaining our focus on delivering long-term value to our customers and shareholders.'
Haydar Ucar, Chief Financial Officer of SAL, commented:
'SAL delivered resilient financial results in the first quarter of 2025, preserving profit margins, managing costs, and managing a healthy balance sheet, in spite of slightly lower volumes compared to last year's uncharacteristic spike. We maintained a healthy EBIT margin, preserved liquidity, and continued to generate positive cashflows. Our proactive financial management, including our investment strategy and working capital optimization, has reinforced the Company's resilience. As we look ahead, we are focused on driving operational efficiency, supporting strategic expansion initiatives, and maintaining a strong foundation for sustainable growth and generating more value for our shareholders.'
Revenue and Profitability
SAL delivered strong financial performance in Q1 2025, reflecting the resilience of its core business and disciplined cost management, in spite of a relative decline in shipment volumes compared to the same period last year.
Revenue for Q1 2025 totalled of SAR 384 million, compared to SAR 453 million in Q1 2024, representing a year-on-year decrease of 15%. The decline was due to a reduction of 6% in shipment volumes and seasonality differences impacting the Company's product mix. However, the rapid and continuing growth in e-commerce demand helped mitigate the impact.
Profit for the period
Q1 2025
SAR Million
Q1 2024
SAR Million
Variance
Q4 2024
SAR Million
Variance
Revenue
384
453
-15%
409
-6%
Operating Profit (EBIT)
165
228
-28%
155
6%
Operating Margin %
43.0%
50.3%
-7.4pp
37.9%
5.1pp
Profit for the period
153
208
-27%
142
8%
EPS
1.91
2.61
-27%
1.78
8%
Operating profit (EBIT) stood at SAR 165 million, compared to SAR 228 million in the same period last year, resulting in an operating profit margin of 43.0%, down from 50.3% a year earlier. The decline was primarily attributed to lower handling volumes as well as a one-off provisioning for accounts receivable, implemented as part of a proactive approach to credit risk management.
Despite the drop, the operating profit margin improved on a quarterly basis from 37.9% in Q4 2024 to 43.0% in Q1 2025, supported by enhanced operational efficiency, as well as accounting for temporary credit provisioning and positive one-offs.
Net profit for the quarter reached SAR 153 million, compared to SAR 208 million in Q1 2024 and SAR 142 million in Q4 2024. Earnings per share (EPS) stood at SAR 1.91, compared to SAR 2.61 in the same period last year and SAR 1.78 in the previous quarter. This reflects the strength of SAL's core business and the resilience of its performance while experiencing market fluctuations.
Cash Flow and Balance Sheet
SAL preserved a strong cash position and further strengthened its balance sheet, supported by continued robust liquidity through disciplined cash flow management.
Operating cash flow amounted to SAR 39 million in the first quarter of 2025, compared to SAR 158 million in the prior-year period. Adjusted free cash flow was SAR 25 million, down from SAR 127 million a year earlier. Capital expenditure (CAPEX) decreased to SAR 15 million from SAR 31 million, with investments primarily focused on design and planning activities for the Company's long-term strategic projects.
Balance Sheet
Q1 2025
SAR Million
Q1 2024
SAR Million
Variance
Net Working Capital
329
273
20%
Property and Equipment
725
724
0%
Right-of-Use Assets
532
887
-40%
Intangible Assets
11
13
-20%
Total Assets
3,186
3,354
-5%
Total Equity
1,449
1,322
10%
Total Liabilities
1,737
2,033
-15%
Cash Flow
Q1 2025
SAR Million
Q1 2024
SAR Million
Variance
Net Cash Generated from Operations
39
158
-75%
Capital Expenditures (CAPEX)
15
31
-52%
Adjusted Free Cash Flow
25
127
-81%
Dividends paid
106
121
-12%
Net debt improved by 13% year-over-year, reaching SAR -662 million, compared to SAR -586 million in Q1 2024, reinforcing the Company's ability to grow with agility. Additionally, shareholders' equity increased by 10%, while liabilities decreased by 15%.
Net working capital rose to SAR -329 million, marking a 20% increase year-over-year, driven by a reduction in short-term liabilities - particularly the settlement of annual lease payments. These improvements reflect a sustainable approach to working capital management, enhanced cash collection cycles, and support for long-term growth.
Over the past five quarters, SAL has demonstrated gradual and disciplined improvement in net working capital, reflecting ongoing advancements in operational efficiency and strategic balance sheet management.
Dividend Announcement
SAL's Board of Directors recommended an ordinary cash dividend of SAR 114.4 million for the first quarter of 2025, subject to approval by the General Assembly. This equates to SAR 1.43 per share, compared to SAR 1.76 per share in Q1 2024. The recommendation reflects the Company's ongoing commitment to enhancing shareholder value.
Earnings Call
An earnings call will be held to discuss the financial results with analysts and investors at 3:30 PM (KSA) on May 20, 2025. Interested investors are encouraged to contact the Investor Relations department for participation details.
About SAL Saudi Logistics Services Co.
SAL Saudi Logistics Services Co. (Ticker: TADAWUL 4263) is the leading logistics services provider in Saudi Arabia, specializing in air cargo handling, ground handling, and logistics solutions. With operations spanning key airports and logistics hubs across the Kingdom, SAL plays a crucial role in facilitating trade and connectivity in the region. The Company is committed to innovation, operational excellence, and sustainable business practices, ensuring seamless and efficient logistics services to airlines, freight forwarders, and other industry stakeholders. SAL continues to expand its network and enhance its service offerings, reinforcing its position as a key enabler of Saudi Arabia's Vision 2030 logistics ambitions.
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