This report provides a comprehensive fundamental analysis of Al Othaim Markets’ performance in the first half of 2026, compared with the corresponding period in 2025, as part of an academic project for Principles of Finance (FIN 202), taught by Dr. Rasha Al-Humaidhi. The report reviews the 3.7% decline in revenue to SAR 5,485.6 million, highlighting challenges with the technology transformation project (ERP system) that affected supply chains and inventory management. It also examines the company’s shift to a net loss attributable to shareholders of SAR 53.5 million, compared with a profit of SAR 117.5 million in the first half of 2025. The 2026 loss was concentrated in the second quarter (SAR 107.1 million), following a profit of SAR 53.7 million in the first quarter. The report also discusses the decline in gross margin to 20.0%, attributable entirely to an increase in inventory provisions to SAR 143 million from SAR 42 million; adjusting provisions to the prior-year level would raise the margin to 21.9%. In addition, the ratio of selling and distribution expenses to sales rose to 19.4%. The report also examines the financial position, including an increase in the debt-to-equity ratio to 2.71 times, driven by a 15.7% decline in equity, which exceeded debt growth of 3.9%; tight liquidity, with a current ratio of 0.54 and cash on hand of SAR 103.8 million; and an increase in free cash flow to SAR 207.4 million despite a 19.9% decline in operating cash flow, resulting from a 58.8% reduction in capital expenditure. It concludes by reviewing competitive challenges from quick-commerce delivery platforms and the importance of improving operational efficiency and strengthening digital infrastructure and supply chains.
Team:
- Al Jawhara Alharbi
- Fadwa Al-Waili
- Siba Al-Zuabi
- Supervision:
- Financial and Economic Analyst: Mr. Hamad Alsaeed @Hamad Alsaeed
- Administrative Organization Specialist: Dalal Bin Khudair @dalal BinKhudair
- Administrative Assistant: Alroutana Albadri @Alroutana Albadri
Disclaimer
This report was prepared as part of an academic project for Principles of Finance (FIN 202), supervised by Dr. Rasha Al-Humaidhi, for educational purposes only. It does not constitute investment advice.
Its figures are based on the interim financial statements published on the Saudi Exchange (Tadawul) website for the period ending in the first half of 2026. The report may contain inadvertent errors or omissions; readers are advised to consult the original statements for verification.
