Southern Province Cement Company SJSC

Southern Province Cement Company SJSC maintains a conservative capital structure with a debt-to-equity ratio of 0.41 and a strong current ratio of 2.77, indicating adequate short-term liquidity coverage. However, the balance sheet reflects significant leverage relative to equity, with long-term debt standing at 1.26 billion SAR against total equity of 3.07 billion SAR. The company holds zero cash and equivalents, resulting in a negative net cash position after subtracting total debt, which introduces medium liquidity risk. Operating cash flow remains positive at 41.9 million SAR, but this is insufficient to cover the substantial capital expenditure of 657.8 million SAR, leading to a negative free cash flow of 608.1 million SAR.

Profitability metrics indicate operational distress, with a net loss of 48.5 million SAR on revenue of 867.3 million SAR. The gross profit of 32.1 million SAR suggests thin margins, while operating income turned negative at -28.5 million SAR. Return on equity stands at -2.59% and return on assets at -1.67%, reflecting an inability to generate returns on invested capital during the latest period. These figures highlight a challenging profitability environment, likely driven by high fixed costs or pricing pressures within the construction materials industry.

Revenue concentration and segment details are not explicitly provided in the available data, limiting the analysis of geographic or product-specific exposure. The company’s primary activity remains cement production, as indicated by its industry classification. Without detailed segment breakdowns, it is assumed that revenue is derived predominantly from domestic construction material sales, subject to regional infrastructure demand cycles.

Growth trajectory analysis is constrained by the absence of historical period data. The latest financial snapshot shows a revenue base of 867.3 million SAR, but without prior year comparisons, year-over-year growth rates cannot be calculated. The significant capital expenditure relative to revenue suggests potential expansion or maintenance activities, but the impact on future revenue growth remains uncertain given the current profitability challenges.

Risk factors include medium liquidity risk due to the negative net cash position and reliance on operating cash flow to service debt. Dilution risk is assessed as low, with no recent share issuances indicated, as basic and diluted shares outstanding remain equal at 140 million. Key flags highlight the negative net cash position, which could constrain financial flexibility in adverse market conditions. The company’s ability to manage debt obligations while investing in capital projects remains a critical risk factor.

Recent events include analyst estimates with a mean price target of 20.66 SAR and a median target of 21.00 SAR, reflecting a cautious outlook. The mean recommendation of 3.33, with five hold ratings and no buy or strong buy recommendations, suggests limited near-term upside potential. Analyst sentiment appears neutral to slightly negative, aligning with the company’s current profitability challenges and liquidity constraints.

Analysts project modest upside with a mean price target of 20.66 SAR versus the current market price of 20.24 SAR.

The debt-to-equity ratio of 0.41 remains slightly below the cohort median of 0.40, suggesting manageable leverage relative to peers.

Dilution risk is assessed as low, indicating limited immediate threat to shareholder equity value from share issuance.

Long-term debt surged to 1.26 billion SAR in fiscal 2026, more than tripling from 362.4 million SAR in fiscal 2024.

Revenue SAR 202.7M, −7,7% YoY; Operating income −85,8% YoY.

• ▍Revenue SAR 202.7M, −7,7% YoY
• ▍Operating income −85,8% YoY
• ▍Net income −125,2% YoY
• ▍Free cash flow +71,3% YoY
• ▍Net margin -2.0%

Revenue SAR 233.6M, −1,6% YoY; Operating income −243,6% YoY.

• ▍Revenue SAR 233.6M, −1,6% YoY
• ▍Operating income −243,6% YoY
• ▍Net income −293,9% YoY
• ▍Free cash flow +61,1% YoY
• ▍Net margin -39.7%

Revenue SAR 219.2M, −5,7% YoY; Operating income −66,1% YoY.

• ▍Revenue SAR 219.2M, −5,7% YoY
• ▍Operating income −66,1% YoY
• ▍Net income −95,9% YoY
• ▍Free cash flow −157,9% YoY
• ▍Net margin 1.0%

Revenue SAR 195.0M, −9,0% YoY; Operating income −50,8% YoY.

• ▍Revenue SAR 195.0M, −9,0% YoY
• ▍Operating income −50,8% YoY
• ▍Net income −61,6% YoY
• ▍Free cash flow −506,4% YoY
• ▍Net margin 7.8%

Revenue SAR 219.6M; Operating income SAR 24.2M.

• ▍Revenue SAR 219.6M
• ▍Operating income SAR 24.2M
• ▍Net margin 7.4%

Revenue SAR 237.5M; Operating income SAR 76.5M.

• ▍Revenue SAR 237.5M
• ▍Operating income SAR 76.5M
• ▍Net margin 20.1%

Revenue SAR 232.5M; Operating income SAR 48.6M.

• ▍Revenue SAR 232.5M
• ▍Operating income SAR 48.6M
• ▍Net margin 22.8%

Revenue SAR 214.3M; Operating income SAR 42.9M.

• ▍Revenue SAR 214.3M
• ▍Operating income SAR 42.9M
• ▍Net margin 18.5%

Revenue SAR 867.3M, −7,2% YoY; Operating income −112,2% YoY.

• ▍Revenue SAR 867.3M, −7,2% YoY
• ▍Operating income −112,2% YoY
• ▍Net income −125,1% YoY
• ▍Free cash flow −157,0% YoY
• ▍Net margin -5.6%

Revenue SAR 935.0M, −12,6% YoY; Operating income +15,2% YoY.

• ▍Revenue SAR 935.0M, −12,6% YoY
• ▍Operating income +15,2% YoY
• ▍Net income −1,2% YoY
• ▍Free cash flow −4 882,8% YoY
• ▍Net margin 20.6%

Revenue SAR 1.07B, −12,4% YoY; Operating income −31,2% YoY.

• ▍Revenue SAR 1.07B, −12,4% YoY
• ▍Operating income −31,2% YoY
• ▍Net income −35,0% YoY
• ▍Free cash flow −94,2% YoY
• ▍Net margin 18.3%

Revenue SAR 1.22B, −8,7% YoY; Operating income −33,6% YoY.

• ▍Revenue SAR 1.22B, −8,7% YoY
• ▍Operating income −33,6% YoY
• ▍Net income −29,9% YoY
• ▍Free cash flow +65,1% YoY
• ▍Net margin 24.6%