Al‑Ramz Real Estate, listed on the Saudi Tadawul exchange, announced a dramatic contraction in its third‑quarter 2026 earnings. Net profit dropped to 10 million riyals, a 94 percent decline from the 171.4 million riyals recorded in the comparable period of 2025.

The company’s statement on the Tadawul platform attributes the loss of earnings primarily to the absence of sales from properties that were still under development during the quarter. In the same quarter of the previous year, those projects generated significant revenue, but in Q3 2026 no such sales materialised, removing a key income stream.

In addition to the sales shortfall, Al‑Ramz faced higher operating expenses and increased financing costs. Operating expenditures rose sharply, driven by higher administrative spending and depreciation, while the cost of borrowing climbed as the firm took on additional debt to fund its development pipeline. These cost pressures more than offset the modest improvement in operating profit margins.

Despite the profit slump, the company’s gross profit margin widened to 15.2 percent from 6.8 percent year‑over‑year, reflecting better control over the cost of goods sold. However, the margin expansion could not compensate for the steep drop in net profit, which was further eroded by a 73.48 percent decline in net earnings to 64.4 million riyals in the second quarter of 2026, a trend that continued into the third quarter.

Al‑Ramz also reported a reduction in net investment gains, falling to 12.5 million riyals from 66.8 million riyals a year earlier, mainly because of lower revaluation gains on its investment funds. The firm’s financing costs rose in line with increased borrowing, while other income streams, such as financing revenues and miscellaneous income, provided only partial relief.

Market analysts note that the sharp earnings decline underscores the vulnerability of Saudi real‑estate developers to project‑stage sales cycles and financing conditions. The slowdown in property sales under development may be linked to broader macro‑economic factors, including tighter credit conditions and cautious consumer sentiment in the Kingdom.

Investors are watching closely to see whether Al‑Ramz can stabilise its cash flow by accelerating sales of completed units or by restructuring its debt profile. The company’s next quarterly report, due in early 2027, will be critical for assessing whether the current downturn is a temporary setback or indicative of longer‑term challenges in the Saudi real‑estate sector.

For now, the 94 percent profit plunge serves as a stark reminder of the volatility inherent in development‑heavy business models, especially in a market where project timelines and financing terms can shift rapidly.

Sources (learn more):

alyaum.com — https://www.alyaum.com/articles/6689496/%D8%A7%D9%84%D8%A7%D9%82%D8%AA%D8%B5%D8%A7%D8%AF/%D8%A3%D8%B3%D9%88%D8%A7%D9%82-%D8%A7%D9%84%D8%A3%D8%B3%D9%87%D9%85/%D8%AA%D8%B1%D8%A7%D8%AC%D8%B9-%D8%A3%D8%B1%D8%A8%D8%A7%D8%AD-%D8%A7%D9%84%D8%B1%D9%85%D8%B2-94-%D8%A5%D9%84%D9%89-10-%D9%85%D9%84%D8%A7%D9%8A%D9%8A%D9%86-%D8%B1%D9%8A%D8%A7%D9%84-%D9%81%D9%8A-%D8%A7%D9%84%D8%B1%D8%A8%D8%B9-%D8%A7%D9%84%D8%AB%D8%A7%D9%84%D8%AB-%D9%85%D9%86-2026