Riyadh, Saudi Arabia — Banan Real Estate H1 2025 profit declined 9.4% year-on-year to SAR 18.17 million, mainly due to the absence of land sales that had boosted earnings in the previous year, according to the company’s Tadawul filing.
Revenue Impacted by No Land Transactions
Total revenue fell nearly 40% to SAR 35.74 million, down from SAR 59.52 million in H1 2024. The main reason was the lack of land sales this year. By contrast, land transactions had added SAR 26.3 million to revenue in the first half of 2024.
Despite this drop, rental income increased 8% year-on-year. This reflects steady strength in the core leasing business, although Q2 saw minor disruptions due to tenant turnover.
Quarterly Profit Rises Year-on-Year but Falls from Q1
Q2 net profit rose 27.3% year-on-year to SAR 8.17 million. This was helped by a 37% decline in cost of revenue and a SAR 2.1 million reversal of a prior impairment on investment properties. However, gross profit fell 4.5% to SAR 14.6 million.
Compared to Q1, net profit declined 18.3%. The company linked this to a SAR 1.85 million increase in financing costs, following its subsidiary Qimam Noshoz’s land purchase in Al-Rahmaniyah.
Rental Business Remains a Stable Growth Driver
Banan’s rental operations continue to provide a stable income base. Shareholders’ equity reached SAR 414.2 million as of June 30, 2025, a 5.3% increase from a year earlier.
Management reaffirmed its commitment to growing recurring income, noting the consistent performance of its leasing portfolio as a key driver of future growth.
THE SAUDI STANDARD’S VIEW: Banan Real Estate H1 2025 Profit Shows Shift Toward Rental Stability
The 9.4% dip in Banan Real Estate H1 2025 profit highlights a transition in the company’s revenue model, from relying on volatile land sales to building steady rental income. This change supports long-term growth and reduces earnings swings.
An 8% rise in rental income and SAR 18.17 million in net profit underscore the strength of Banan’s core operations. The revenue decline from fewer land deals shows the downside of depending on one-time asset sales.
The 27.3% year-on-year rise in Q2 profit reflects good cost control and effective asset management, even as overall revenue dipped. Financing costs and tenant turnover created short-term pressure, but the company’s strong equity base shows financial stability.
Banan’s path mirrors a broader trend in Saudi real estate: a shift toward recurring income as a foundation for growth. As Vision 2030 boosts demand for residential and commercial properties, firms with predictable rental income and smart financing will lead the sector’s next phase.
Related Reading
• Explore investment trends and performance in the Saudi real estate market
• See Q2 earnings reports from Saudi property firms and leasing companies
