Arabian Plastic (9548.SR) Q4 2024 Earnings Report

Q4 2024 delivered a material top-line rebound for Arabian Plastic, with revenue of SAR 96.99 million and gross profit of SAR 17.91 million, yielding a gross margin of 18.47%. The quarter produced EBITDA of SAR 16.11 million and net income of SAR 8.08 million, translating to an EPS of SAR 1.62 and a net margin of 8.33%. YoY, revenue grew ~161.5% and net income rose ~148%, underscoring a successful post-pandemic normalization and ramp in utilization from capacity expansion. QoQ, revenue was up ~124.4% and net income grew ~205%, reflecting the quarterly cadence of higher volumes and operating leverage as new capacity comes online. The company funded aggressive capacity expansion with capex of SAR 20.08 million in Q4, resulting in negative free cash flow of SAR -14.86 million for the period. Operating cash flow remained positive at SAR 5.23 million, while financing activities contributed SAR 16.06 million, lifting cash balance to SAR 7.00 million at quarter-end. The balance sheet shows a lean cash position with total debt of SAR 93.60 million and a net debt position of SAR 86.60 million, largely driven by elevated short-term borrowings (SAR 91.55 million). From a profitability and efficiency perspective, the company exhibits solid operating profitability (operating margin ~9.49%) and healthy albeit modest returns (ROA ~3.49%, ROE ~7.41%). Looking ahead, management is pursuing capacity-driven growth with continued capex and utilization gains. While revenue momentum appears sustainable in the near term, the near-term liquidity risk remains elevated due to the heavy reliance on short-term debt and ongoing capex. The stock trades at a low forward multiple (P/E ~6.2x) relative to regional peers, reflecting execution risk around the capex program but offering potential upside if scale-up translates into margin expansion and stronger free cash flow over the next 12–18 months.