Dar Al Arkan Real Estate Development Company (4300) Q2 2025 earnings summary

Executive summary

• Q2 2025 saw a slight contraction in revenues, but profitability improved due to higher gross margins and lower SG&A expenses.

• Revenue for the six months ended 30 June 2025 was SR 1.78 billion, nearly flat compared to SR 1.83 billion in the prior year period.

• Net profit for the six months rose to SR 448 million, up 40% year-over-year from SR 319 million.

• Strong liquidity position with SAR 6.0 bn in cash and robust balance sheet metrics.

• Continued investment in development properties and successful project launches in KSA and internationally.

Financial highlights

• Q2 2025 revenue was SAR 852 mn, down 11.4% YoY and 8.6% QoQ, mainly due to lower bulk land sales.

• Gross profit rose 7.0% YoY to SAR 410.8 mn, with margin improving to 48.2% from 44.5% YoY.

• EBITDA increased 17.4% YoY to SAR 464.9 mn, with a margin of 54.6%.

• Net income for Q2 2025 was SAR 238.6 mn, up 44.5% YoY, with net margin at 28.0%.

• Book value per share reached SAR 19.9, up from SAR 19.1 YoY.

Outlook and guidance

• Real GDP in Saudi Arabia projected to grow by 4.6% in FY 2025, driven by non-oil activities.

• Government expansionary spending and continued borrowing expected to support economic diversification.

• Housing demand remains strong, with a target of 70% home ownership by 2030.

• Management highlighted a signed contract for the Shams Ar Riyadh project valued at SR 6.7 billion, pending regulatory approval for revenue recognition.

• The company expects continued stabilization in real estate transaction volumes and is monitoring market conditions for future capital market transactions.