AYYAN Investment Posts 164.9M SAR Nine-Month Loss

Riyadh, Saudi Arabia — AYYAN Investment Company swung to a net loss of 164.9 million SAR in the nine months ending September 30, 2026, compared with a profit of 469.3 million SAR in the same period a year earlier. The reversal stems primarily from declining fair values on equity investments the company marks through its profit-and-loss account.

The loss per share reached 1.64 SAR, against earnings of 4.66 SAR in the prior-year period. Shareholders’ equity fell 27.5% year-on-year to 780.4 million SAR, and accumulated losses reached 276.4 million SAR — equal to 27.47% of the company’s capital.

Quarterly Breakdown

In the third quarter alone, AYYAN recorded a net loss attributable to shareholders of 77.7 million SAR, reversing a profit of 84.2 million SAR in the same quarter last year. However, the quarter showed sequential improvement: the prior quarter’s loss stood at 119.2 million SAR, so the Q3 loss narrowed by roughly 34.8% quarter-on-quarter.

Revenue followed a similar pattern. The current quarter posted negative revenue of 67.2 million SAR — driven by fair-value write-downs — compared with positive revenue of 88.5 million SAR a year ago. Still, the decline moderated from the previous quarter’s negative 104.4 million SAR, reflecting a smaller drop in fair values during Q3.

Key Drivers

• Equity instruments carried at fair value through profit or loss fell in value across both the quarter and the nine-month period, directly reducing reported revenue.
• Finance costs rose year-on-year, adding pressure on the bottom line.
• General and administrative expenses increased compared with the prior-year quarter, though they eased sequentially in Q3.
• Investment income calculated using the effective profit rate method declined over the nine-month period versus a year ago.
• Profits from discontinued operations dropped sharply; AYYAN sold its subsidiary Al-Ahsa Food Industries Company during the period, with all related revenues and expenses reclassified under discontinued operations.

Regulatory Threshold Triggered

Accumulated losses now exceed 20% of capital, crossing the threshold that activates Tadawul’s procedures and instructions for listed companies in this position. AYYAN confirmed it will apply all relevant regulations as they become applicable. The external auditor issued an unmodified conclusion, with no reservations or qualifications noted in the report.

Certain comparative figures from the previous quarter were also reclassified to comply with IFRS 5, which governs the presentation of discontinued operations.

What This Means for Investors

• AYYAN’s earnings are directly tied to mark-to-market swings in its equity portfolio, making reported results highly volatile and difficult to predict from one quarter to the next.
• Accumulated losses at 27.47% of capital trigger formal regulatory scrutiny — investors should monitor any announcements regarding capital restructuring or remediation plans.
• Shareholders’ equity has eroded by more than a quarter in one year, reducing the book-value cushion beneath each share.
• The sale of Al-Ahsa Food Industries removes a revenue-generating operating subsidiary, leaving AYYAN more concentrated in fair-value investment assets going forward.

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THE SAUDI STANDARD’S VIEW: AYYAN’S LOSSES SIGNAL DEEPER STRUCTURAL RISKS FOR FAIR-VALUE INVESTORS

AYYAN Investment’s swing from a 469.3 million SAR nine-month profit to a 164.9 million SAR loss is not merely a cyclical setback — it exposes fundamental vulnerabilities in a business model built around mark-to-market equity valuations. For investors navigating Saudi Arabia’s listed investment companies, this result demands careful scrutiny of portfolio construction, capital adequacy, and regulatory standing.

• MARK-TO-MARKET VOLATILITY IS A STRUCTURAL EARNINGS RISK, NOT A TEMPORARY HEADACHE

When a company’s revenue line turns negative — as AYYAN’s did in both Q2 and Q3 — it reflects a business model that converts equity market fluctuations directly into reported income and losses. This architecture creates extreme earnings unpredictability, making conventional valuation metrics such as price-to-earnings ratios nearly meaningless quarter to quarter. Investors seeking stable return profiles should treat AYYAN as a leveraged proxy on equity market sentiment rather than an operational business generating predictable cash flows.

• REGULATORY THRESHOLD BREACH ELEVATES CAPITAL RESTRUCTURING RISK

Accumulated losses crossing 20% of capital is not a soft warning — it activates formal Tadawul procedures that can include mandated shareholder meetings, capital reductions, or other remediation steps under Saudi Capital Market Authority regulations. With accumulated losses now at 27.47% of capital, AYYAN is deeper into this territory than the threshold alone suggests, and the trajectory of shareholders’ equity — down 27.5% in a single year — leaves limited room for further deterioration before more urgent interventions become likely. Investors should treat upcoming regulatory announcements from the company as material events requiring close attention.

• DIVESTITURE OF AL-AHSA FOOD INDUSTRIES CONCENTRATES RISK FURTHER

The sale of Al-Ahsa Food Industries removes the company’s most tangible operational revenue stream, leaving AYYAN’s financial performance almost entirely dependent on fair-value movements in its equity portfolio. Portfolio concentration in a single asset class — particularly one with no floor on negative revenue recognition — amplifies downside scenarios in adverse market conditions. This strategic narrowing runs counter to the diversification principle that underpins sound investment company governance.

• SEQUENTIAL IMPROVEMENT IN Q3 IS REAL BUT INSUFFICIENT FOR INVESTOR REASSURANCE

The quarter-on-quarter narrowing of losses — from 119.2 million SAR in Q2 to 77.7 million SAR in Q3 — does indicate that the pace of portfolio value erosion slowed meaningfully during the summer months. However, a reduced rate of loss is categorically different from a return to profitability, and three consecutive quarters of negative or sharply declining results establish a pattern that cannot be dismissed as noise. Until AYYAN demonstrates two or more consecutive quarters of genuine equity portfolio appreciation, the sequential improvement should be treated as a stabilization signal, not a recovery signal.

Saudi Arabia’s Vision 2030 envisions a capital market defined by institutional depth, investor confidence, and companies that channel savings into productive national assets. Listed investment companies like AYYAN play a role in that ecosystem — but only when their balance sheets reflect financial resilience and transparent risk management. The erosion of shareholders’ equity, the activation of regulatory thresholds, and the concentration of risk in volatile fair-value assets represent exactly the kind of structural fragility that Saudi market regulators and long-term investors are working to minimize as the Kingdom builds a world-class financial market worthy of its economic ambitions.