Dallah Healthcare Posts Record 436M SAR Quarter

Riyadh, Saudi Arabia — Dallah Healthcare posted its highest quarterly profit ever in Q3 2026, with net profit attributable to shareholders reaching 436.09 million SAR — a 207.3% jump from 141.9 million SAR in Q3 2025. However, a 356.6 million SAR one-time gain from selling its stake in Dr. Mohammed Rashid Al Faqih Hospital drove nearly all of that surge. Strip out non-recurring items, and quarterly profit actually fell 28.6% year-over-year to 79.5 million SAR.

For the nine months ending September 30, 2026, Dallah Healthcare grew revenue 8.5% to 3.21 billion SAR and lifted net profit 47.2% to 620.62 million SAR compared with the same period in 2025. Earnings per share for the nine-month period reached 5.13 SAR, up from 3.51 SAR a year earlier. Total shareholders’ equity rose 6.3% to 4.49 billion SAR.

Quarterly and Period Breakdown

Q3 2026 revenue grew 2.3% year-over-year to 1.09 billion SAR, while gross profit slipped 1.2% to 375.93 million SAR. Sequentially, revenue fell 2% from Q2 2026’s 1.11 billion SAR, a decline Dallah attributed to summer seasonality and disruptions at Kingdom Hospital. Operational profit, which includes the asset disposal gain, surged 220.4% year-over-year to 504.9 million SAR in Q3 and 238.2% quarter-over-quarter from 149.29 million SAR.

For the full nine-month period, gross profit rose 4.1% to 1.10 billion SAR and operational profit jumped 57.9% to 774.54 million SAR, reflecting both the asset sale and underlying revenue growth across the group’s hospital and clinic network.

Key Drivers

• Patient visits rose 7% year-over-year in Q3 to 1.04 million, led by Eastern Region growth of 20.4%, Western Region 5.7%, and Central Region 3.6%.
• Dallah Al-Khobar and Dallah Al-Ahsa hospitals combined recorded 20% revenue growth in Q3 2026 versus Q3 2025.
• A 356.6 million SAR after-Zakat gain from selling the stake in Dr. Mohammed Rashid Al Faqih Hospital was the single largest profit driver in the quarter.
• Dallah Namar Hospital absorbed a 55% drop in long-term government care patients, partially offset by a 19% rise in insured and self-pay volumes.
• Kingdom Hospital saw a 9% patient volume decline due to surrounding roadworks limiting access.
• Expected credit loss expenses rose roughly 18 million SAR due to updated macroeconomic assumptions in the credit model.
• Finance costs increased 9 million SAR (excluding the 2025 non-recurring financing gain), driven by acquisition-related debt.
• Adjusted EBITDA, excluding non-recurring items, fell 7% year-over-year to 207 million SAR from 222 million SAR in Q3 2025.

Management and Outlook

Dallah Healthcare applied proceeds from the Al Faqih Hospital stake sale — received in July 2026 — toward phased repayment of existing financing facilities. Management expects this to reduce finance costs in future periods. The company is actively repositioning Dallah Namar Hospital away from government long-term care contracts and toward insured and self-pay patients, which it describes as more sustainable revenue sources. Geographic expansion of Dallah Clinics remains a stated strategic priority, with the clinic network cited as a primary driver of patient volume growth across all regions.

What This Means for Investors

• The record quarterly profit is real but misleading — underlying profitability fell sharply once the 356.6 million SAR asset disposal gain is removed, so investors should focus on adjusted figures.
• Revenue growth of 8.5% over nine months is solid, but gross margin compression signals rising costs that Dallah has not yet fully offset through volume gains.
• Debt repayment from asset sale proceeds could meaningfully lower finance costs and boost recurring earnings in coming quarters — that is the number to watch.
• Kingdom Hospital’s roadwork disruption and Dallah Namar’s government contract losses are temporary headwinds, but their duration and financial impact remain uncertain.

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THE SAUDI STANDARD’S VIEW: DALLAH’S RECORD QUARTER DEMANDS A CLOSER READ

Dallah Healthcare’s Q3 2026 headline number is eye-catching, but disciplined investors must look past the optics. The real story lies beneath the asset disposal gain — in the underlying operational trajectory, the strategic pivots underway, and what the company’s balance sheet decisions signal about management’s confidence in its recurring earnings power.

• THE DISPOSAL GAIN DISTORTS THE PICTURE

Stripping out the 356.6 million SAR after-Zakat gain from the Al Faqih Hospital stake sale reveals that core quarterly profit contracted by more than a quarter year-over-year. Adjusted EBITDA also declined, and gross margin compressed despite modest revenue growth — a combination that reflects genuine cost pressure within the operating business. Investors who anchor to the headline figure risk misreading Dallah’s current earnings trajectory.

• DEBT REPAYMENT IS THE MOST CONSEQUENTIAL DECISION THIS QUARTER

Management’s choice to direct asset sale proceeds toward reducing financing facilities is strategically sound and likely to generate more durable value than holding cash. Acquisition-related debt has already pushed finance costs higher, and eliminating that drag could materially lift recurring net income in 2027 without requiring any operational improvement. This is the line item that long-term investors should be modeling carefully.

• REGIONAL DIVERGENCE REVEALS WHERE GROWTH IS REAL

The Eastern Region’s 20.4% patient volume growth, anchored by Dallah Al-Khobar and Dallah Al-Ahsa, represents a structurally expanding franchise in one of Saudi Arabia’s most economically active corridors. By contrast, Kingdom Hospital’s access-related volume decline and Dallah Namar’s government contract erosion are operationally concentrated risks that management is actively managing rather than ignoring. Geographic and payer-mix diversification is quietly becoming a competitive strength for the group.

• CLINIC NETWORK EXPANSION IS THE LONG-TERM REVENUE ENGINE

The Dallah Clinics network is consistently cited as the primary driver of patient volume across all regions, functioning as both a referral feeder and a standalone revenue source. Scaling a clinic network requires lower capital intensity than building hospitals, generates faster return cycles, and serves the insured and self-pay segments that Dallah is deliberately prioritizing. This pivot toward lighter-asset, higher-margin ambulatory care is a structurally important repositioning.

Dallah Healthcare’s strategic direction — reducing government dependency, retiring acquisition debt, expanding clinic infrastructure, and growing in high-density urban corridors — maps directly onto the healthcare privatization and capacity-building pillars of Vision 2030. As Saudi Arabia targets a meaningful increase in private sector contribution to GDP, companies with the operational scale and financial discipline to absorb transition costs while investing in sustainable growth models will be the ones that define the sector’s next decade. Dallah, adjusted figures and all, remains a core name in that conversation.