Riyadh, Saudi Arabia — United Carton Industries Co. (UCIC, TASI: 1323) reported a net profit of SAR 47.3 million for the nine months ending 30 September 2025. This was down 52.5% year-on-year from SAR 99.5 million in the same period of 2024.

The decline was mainly driven by a sharp rise in raw material costs — particularly paper — in both local and international markets. These costs weighed heavily on gross margins despite stronger sales volumes across all segments.

Nine-Month Performance

Revenue increased 3.4% year-on-year to SAR 1.06 billion, supported by higher demand and sales volume. However, gross profit declined 24.3% to SAR 147.5 million. In comparison, operating profit dropped 50.5% to SAR 57.4 million, reflecting cost pressures across the supply chain.

Despite improved financial income from short-term deposits, the steep rise in paper prices significantly increased the cost of goods sold. This increase compressed profitability.

Total comprehensive income fell to SAR 47.3 million, mirroring the drop in net profit.

However, Shareholders’ equity strengthened 16.2% year-on-year to SAR 600.2 million. This reflects retained earnings and the acquisition of Ras Al Khaimah Packaging Company in the UAE, which was completed in 2024.

Earnings per share stood at SAR 1.18, compared with SAR 2.49 in the same period last year.

Third Quarter Highlights

For Q3 2025, UCIC posted SAR 20.6 million in net profit, down 44% from SAR 36.8 million in Q3 2024. However, it was up 156% from SAR 8.0 million in Q2 2025.

Revenue rose 5.8% year-on-year to SAR 371.5 million. This increase reflects higher sales volumes and improved customer demand. Sequential growth reached 10.9%.

Gross profit decreased to SAR 54.8 million, a 10.4% drop year-on-year, as paper costs remained elevated. However, operating profit more than doubled quarter-on-quarter to SAR 23.8 million. This was aided by improved pricing discipline and marginal cost reductions in raw materials.

Key Drivers

•Higher raw material costs: Paper prices rose sharply, eroding margins across all segments.

•Volume growth: Sales volumes increased, offsetting part of the cost impact.

•Finance income: Earnings from short-term deposits partially supported net income.

•Acquisition impact: Prior-year results were restated to reflect the 2024 acquisition of Ras Al Khaimah Packaging Company. This includes related accounting adjustments.

Management and Outlook

Management attributed the profit decline to persistent input cost inflation despite higher revenue. The company continues to focus on operational efficiency and supply chain optimization to mitigate cost volatility.

The external auditor issued an unmodified report, confirming the reliability of the financial results.

UCIC restated 2024 comparative figures following the final valuation of the UAE subsidiary’s assets. They recognized a SAR 11.2 million bargain purchase gain and minor depreciation adjustments.

Looking forward, UCIC expects gradual stabilization in paper prices and continued demand recovery in the packaging sector. This is particularly true as regional e-commerce and manufacturing activity expand.

What This Means for Investors

•Profit pressure: Earnings decline driven by elevated input costs, though sequential improvement signals recovery potential.

•Balance sheet strength: Higher equity and ongoing integration of the UAE subsidiary strengthen long-term positioning.

•Operational resilience: Sustained sales growth despite cost headwinds.

•Outlook: Cautiously optimistic, pending material price normalization and sustained demand in packaging markets.

 

 

THE SAUDI STANDARD’S VIEW: United Carton Industries Maintains Operational Resilience Amid Global Cost Pressures

United Carton Industries Co. (UCIC) delivered stable revenue growth despite a challenging cost environment, underscoring the strength and adaptability of Saudi Arabia’s manufacturing base. The company’s 52% profit decline to SAR 47.3 million for the first nine months of 2025 reflects global input cost inflation—particularly in paper markets. Yet, its ability to sustain higher sales and strengthen its balance sheet highlights operational discipline and long-term resilience within the Kingdom’s industrial sector.

• Revenue Growth Amid Global Volatility

UCIC’s 3.4% revenue increase to SAR 1.06 billion demonstrates the sustained expansion of Saudi Arabia’s non-oil manufacturing activity. This comes even as global supply chains face inflationary headwinds. Higher sales volumes across all divisions underscore continued demand from the Kingdom’s logistics, retail, and industrial clients.

• Cost Inflation and Margin Management

Sharp rises in international paper prices compressed margins and weighed on profitability. However, UCIC’s improved pricing strategy and focus on cost optimization in the third quarter resulted in a notable quarter-on-quarter rebound. This signifies early signs of stabilization and management agility.

• Strategic Expansion Strengthening Regional Presence

The consolidation of Ras Al Khaimah Packaging Company in 2024 expanded UCIC’s regional footprint and enhanced its export capacity. The acquisition and a 16% rise in shareholders’ equity reinforce the company’s positioning as a key player in the GCC packaging market.

• Financial Stability and Governance Confidence

An unmodified auditor’s report and prudent balance sheet management affirm UCIC’s financial integrity. Increased finance income and a strengthened equity base illustrate sound capital stewardship, even during industry-wide cost pressure.

• Positive Outlook for the Saudi Industrial Sector

As raw material prices begin to normalize and manufacturing demand continues to rise—driven by e-commerce, logistics, and domestic production growth—UCIC stands to benefit from Saudi Arabia’s broader industrial transformation under Vision 2030. The company’s strategic focus on efficiency and regional integration aligns closely with the Kingdom’s goal of building globally competitive, resilient manufacturing industries.

United Carton Industries’ results reflect the pressures and promise of Saudi manufacturing in 2025. They navigate cost challenges with discipline while positioning for recovery and long-term growth. Its sustained revenue expansion and solid fundamentals reaffirm the strength of the Kingdom’s industrial base as it advances toward a diversified, innovation-driven economy.

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