AlNaqool Sons Lifts Nine-Month Profit 56%

Riyadh, Saudi Arabia — Mohammed Hasan AlNaqool Sons Co. grew its nine-month net profit by 56% year-on-year, driven by expanded production capacity and a broader customer base. Net profit attributable to shareholders reached 3.49 million SAR for the period ending 30 September 2026, up from 2.24 million SAR a year earlier. Earnings per share rose to 0.60 SAR from 0.39 SAR.

Revenue for the nine-month period climbed 5.3% to 54.45 million SAR, compared with 51.71 million SAR in the same period last year. Gross profit improved 8.6% to 9.70 million SAR. Operational profit, however, slipped 7.6% to 3.57 million SAR from 3.87 million SAR, as cost pressures at the operational level partially offset stronger top-line growth.

Q3 Standalone: A Sharper Picture

The third quarter told a more striking story. AlNaqool Sons posted quarterly net profit of 1.37 million SAR — a 760% jump from just 159,000 SAR in Q3 2025. Revenue for the quarter reached 18.15 million SAR, up 19.3% year-on-year. Gross profit surged 40.6% to 3.87 million SAR. Operational profit jumped 179% to 1.25 million SAR.

Sequentially, results also improved. Compared with Q2 2026, quarterly revenue rose 4.3%, gross profit gained 46.7%, and net profit grew 4.3%. Lower cost of revenues — down roughly 6% from the prior quarter — supported the sequential improvement. Total shareholders’ equity stood at 63.00 million SAR, up 5.2% from 59.90 million SAR a year ago.

Key Drivers

• Asset expansion at AlNaqool Sons and its subsidiary Sadan Company raised production capacity and attracted new projects.
• Cost of revenues fell 3.2% year-on-year in Q3, while general and administrative expenses dropped 0.7%.
• A 300,000 SAR gain from fair-value changes in interest-rate hedging derivatives (SAIBOR-linked) boosted Q3 profit.
• Investment gains — specifically revaluation of securities in graphene — rose 181% over the nine-month period versus a year earlier.
• Subsidiary Deir Real Estate Company contributed no revenue in the current nine-month period, compared with approximately 7 million SAR in the prior-year period. Core operations absorbed that shortfall.

What This Means for Investors

• The 760% quarterly profit surge reflects a low base in Q3 2025, not a structural step-change — investors should weigh the full nine-month trajectory alongside the single quarter.
• Operating profit fell 7.6% over nine months despite rising revenue, signalling that cost management at the operational level needs watching.
• The absence of real estate revenue from Deir Real Estate this year created a headwind the company overcame — a return of that revenue stream could provide additional upside.
• Derivative gains and investment revaluations contributed meaningfully to profit; these are non-recurring in nature and may not repeat at the same level.

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THE SAUDI STANDARD’S VIEW: ALNAQOOL SONS — READING THE PROFIT SURGE WITH PRECISION

AlNaqool Sons’ nine-month results carry genuine positives, but disciplined investors will look beyond the headline numbers. The company has demonstrated meaningful operational progress in production capacity and customer acquisition, yet several moving parts beneath the surface require careful interpretation before drawing conclusions about trajectory.

• CAPACITY INVESTMENT IS BEGINNING TO PAY DIVIDENDS

Asset expansion across the parent company and its subsidiary Sadan Company has translated into higher revenue and a strengthening gross margin over the nine-month period. This is the kind of capital deployment that builds durable competitive positioning rather than short-term gains. Investors should monitor whether new projects secured during this period convert into sustained revenue streams in the quarters ahead.

• THE OPERATING PROFIT GAP DEMANDS ATTENTION

Revenue grew and gross profit improved, yet operating profit declined 7.6% over nine months — a divergence that points to cost pressures accumulating between the gross and operating lines. This dynamic is not unusual during expansion phases when administrative and overhead costs scale ahead of revenue, but it cannot be dismissed. Management’s ability to close that gap as capacity utilisation improves will be a critical measure of operational efficiency going forward.

• NON-RECURRING ITEMS INFLATED THE BOTTOM LINE

Derivative fair-value gains linked to SAIBOR movements and a sharp rise in graphene securities revaluations contributed materially to reported net profit. These items are market-sensitive and inherently variable, meaning the core earnings power of the business is somewhat lower than the headline figures suggest. Investors building positions should construct earnings estimates on operating performance alone to avoid overstating the company’s recurring profitability.

• DEIR REAL ESTATE RECOVERY REPRESENTS A LATENT UPSIDE CATALYST

The subsidiary contributed no revenue during the current nine-month period after generating approximately 7 million SAR in the prior year — a significant drag that core operations successfully absorbed. Any resumption of activity within Deir Real Estate would provide a meaningful additive revenue layer without requiring further capital deployment at the group level. This positions the company with an embedded growth option that does not appear to be priced into current market expectations.

AlNaqool Sons operates in the kind of industrial and real estate-adjacent space that Vision 2030 is structurally reinforcing through infrastructure spending, housing development, and the broadening of Saudi Arabia’s non-oil productive base. Companies that use this period of elevated public and private investment to expand capacity, diversify their client base, and strengthen their balance sheets — as AlNaqool Sons appears to be doing — are positioning themselves to benefit from the Kingdom’s long-term economic transformation. The discipline to convert that positioning into consistent operating profit growth will determine whether this company earns a sustained premium from the market.