Riyadh, Saudi Arabia — United Carton H1 2025 profit dropped 57.4% to SAR 26.7 million, down from SAR 62.7 million in the same period last year, the company announced in a Tadawul filing. The decline occurred despite higher sales volumes.

Q2 Profit Drops 71% Year-on-Year

In Q2 2025, net profit fell sharply to SAR 8 million, marking a 71.4% drop from SAR 28.1 million in Q2 2024. Quarterly revenue increased 6.3% to SAR 335 million, but rising paper and raw material costs significantly reduced profit margins. Gross profit fell 31.3%, and net profit declined 56.9% compared to Q1 2025.

Short-term finance income provided limited relief from margin pressure. However, operating costs remained high due to ongoing paper market inflation.

Margins Under Pressure Despite Revenue Growth

For H1 2025, revenue rose 2.1% year-on-year to SAR 684.8 million, driven by volume growth in the corrugated and folding carton segments. Gross profit dropped 30.7% to SAR 92.7 million, while operating profit declined 54.7% to SAR 33.6 million.

Earnings per share fell to SAR 0.67 from SAR 1.57 in H1 2024. Still, shareholders’ equity rose 6.4% year-on-year to SAR 579.6 million, reflecting continued balance sheet strength.

What This Means for Investors

  • Cost-driven pressure: Paper inflation is squeezing margins across the sector.
  • Resilient volumes: Sales continue to grow despite falling profits.
  • Equity support: A solid balance sheet helps weather earnings volatility.
  • Outlook hinges on input trends: Future margins depend on raw material costs.

 

 

THE SAUDI STANDARD’S VIEW: United Carton’s Profit Decline Highlights Industry Exposure to Global Input Volatility

United Carton H1 2025 profit fell sharply, but the results reflect more than just a drop in earnings—they highlight how packaging manufacturers are exposed to global commodity cycles.

Sales volumes rose in corrugated and folding carton products, showing steady demand from logistics, retail, and e-commerce. These sectors continue to grow under Saudi Arabia’s economic diversification drive.

However, the 30.7% fall in gross profit and 54.7% decline in operating profit reveals the significant impact of rising input costs, especially for paper. These pressures are affecting profitability across global packaging markets.

The 6.4% increase in equity shows sound financial management and reinforces United Carton’s ability to withstand market cycles.

Although short-term finance income helped, the company must continue refining its procurement strategies, pricing, and cost control to recover margins.

United Carton’s experience underscores the broader packaging sector’s need to balance domestic demand with international input cost volatility. As Vision 2030 promotes local supply chain resilience, reducing reliance on imported raw materials will be key to long-term profitability and competitiveness.

 

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