Exchange: SAU | Sector: Real Estate | Industry: REIT Diversified
Q2 2025
Published: Jun 30, 2025
Earnings Highlights
Revenue of $33.43M up 101.4% year-over-year
EPS of $0.34 increased by 126.7% from previous year
Net income of 17.11M
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Taleem REIT Fund (4333.SR) QQ2 2025 Results: Robust Revenue Growth, High Margins, and Elevated Dividend Yield in the Saudi Real Estate Market
Executive Summary
Taleem REIT Fund delivered a standout QQ2 2025 performance, underpinned by materially higher revenues and an expansion of profitability metrics. Reported revenue for the quarter was SAR 33.43 million, representing a year‑over‑year increase of approximately 101.4% (vs. SAR 16.60 million in QQ2 2024), while operating income reached SAR 27.56 million and net income SAR 17.11 million, translating into strong margins (operating margin ~82.4%, net margin ~51.2%) and an EBITDA of SAR 31.00 million with an EBITDA margin of ~92.7%. Earnings per share stood at SAR 0.34, supported by a weighted average share count of 51.0 million.
The margin profile reflects Taleem’s asset-light, income-generating real estate portfolio and disciplined cost structure, complemented by minimal tax expense in the quarter. The company also showcases a robust liquidity position (current ratio of 31.66 and cash ratio of 1.525), which provides ample cushion to fund capex, acquisitions, or shareholder returns, even as receivables dynamics show extended collection cycles (DSO ~206 days).
dividend sustainability remains a focal point: the reported dividend yield of 6.68% is attractive relative to peers, but the payout ratio of 1.908x earnings indicates a high distribution level that relies on multiple cash sources beyond net income. Absent explicit QQ2 2025 forward guidance, investors should monitor rent escalations, lease renewals, occupancy trends in educational-related properties, refinancing opportunities, and any regulatory shifts affecting REIT distributions. Overall, Taleem is positioned to capitalize on Saudi real estate demand while maintaining a conservative balance sheet and strong cash generation, albeit with liquidity timing risks tied to receivables and capital deployment choices.
Key Performance Indicators
Revenue
33.43M
QoQ: 0.00% | YoY:101.42%
Operating Income
27.56M
QoQ: 0.00% | YoY:76.93%
Net Income
17.11M
QoQ: 0.00% | YoY:120.88%
EPS
0.34
QoQ: 0.00% | YoY:126.67%
Revenue Trend
Margin Analysis
Key Insights
Revenue: SAR 33,429,634 for QQ2 2025; YoY growth +101.4%; QoQ growth +0.0% (per reported metrics).
EBITDA: SAR 31,000,920; EBITDA margin 92.73%.
Operating income: SAR 27,559,522; operating margin 82.44%.
Net income: SAR 17,109,427; net margin 51.18%.
EPS: SAR 0.34; Diluted EPS: SAR 0.34; Weighted avg shares: 51.0m.
Financial Highlights
Revenue and profitability
- Revenue: SAR 33,429,634 for QQ2 2025; YoY growth +101.4%; QoQ growth +0.0% (per reported metrics).
- EBITDA: SAR 31,000,920; EBITDA margin 92.73%.
- Operating income: SAR 27,559,522; operating margin 82.44%.
- Net income: SAR 17,109,427; net margin 51.18%.
- EPS: SAR 0.34; Diluted EPS: SAR 0.34; Weighted avg shares: 51.0m.
Profitability and efficiency
- Return on assets: 2.01%; Return on equity: 3.11%; Return on capital employed: 3.25%.
- Gross profit is not explicitly reported in the data; implied gross profit from revenue minus cost of revenue is approximately SAR 27.95 million, suggesting a large portion of operating profitability derives from core rental income rather than high-margin ancillary activities.
Liquidity and leverage
- Current ratio and quick ratio: 31.66; cash ratio: 1.525, indicating very robust short-term liquidity.
- Debt metrics: debt ratio 0.351; debt to equity 0.544; long-term debt to capitalization 0.351; total debt to capitalization 0.352.
- Cash flow and productivity: operating cash flow per share SAR 0.614; free cash flow per share SAR 0.614; cash per share SAR 0.266; cash flow to debt ratio 0.105.
- Dividends and payout: dividend yield 6.68%; payout ratio 190.8% of earnings (0.34 SAR EPS, ~0.614 SAR FCF per share support).
Valuation and market positioning
- Price to book 0.888x; price to earnings 7.14x; price to sales 14.62x; dividend yield notably higher than peers (average ~2.5–3.5%), reflecting a higher distribution policy.
- Enterprise value multiple ~25.18x; price fair value reported at 0.888 SAR per share, suggesting current pricing aligns with documented fundamentals though the high dividend yield may be a driver of value for income-focused investors.
Compared to peers
- Taleem’s dividend yield (~6.68%) stands above peers (approx. 3.0–3.8% range), while P/E (~7.1x) is broadly in line with the sector, and P/B (~0.89x) sits mid-range.
- Leverage is moderate (debt ratio 0.351) versus peers ranging from ~0.27x to ~0.54x; Taleem’s liquidity is stronger than most peers given the very high current/quick ratios.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
33.43M
101.42%
0.00%
Operating Income
27.56M
76.93%
0.00%
Net Income
17.11M
120.88%
0.00%
EPS
0.34
126.67%
0.00%
Key Financial Ratios
currentRatio
31.66
operatingProfitMargin
82.4%
netProfitMargin
51.2%
returnOnAssets
2.01%
returnOnEquity
3.11%
debtEquityRatio
0.54
operatingCashFlowPerShare
$0.61
freeCashFlowPerShare
$0.61
dividendPayoutRatio
190.8%
priceToBookRatio
0.89
priceEarningsRatio
7.14
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Earnings transcript not provided in the supplied dataset. As a result, there are no management quotes to anchor the QQ2 2025 discussion or to extract themes from prepared remarks. This analysis relies on disclosed financials and peer references. Once the transcript is available, a thematic synthesis can be added covering strategy execution, asset acquisitions, occupancy/lease trends, and capital allocation views.
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Forward Guidance
No explicit QQ2 2025 forward guidance is included in the provided data. Based on the quarter’s strong top-line growth, high margins, and substantial liquidity, Taleem REIT Fund appears well-positioned to pursue selective acquisitions and potential dividend refinements. Management commentary (when available) should clarify: (1) acquisition pipeline in educational/training asset classes, (2) indemnity or risk mitigants around lease durations and escalations, (3) sensitivity to interest rate changes and refinancing plans, and (4) potential adjustments to payout policy given the elevated dividend yield. Investors should monitor: rent escalations, lease renewals, occupancy trends, capex plans, debt maturity profile, and regulatory changes affecting REIT distributions.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
4333.SR Focus
0.00%
82.40%
3.11%
7.14%
4339.SR
88.20%
81.00%
0.81%
21.52%
4330.SR
60.80%
10.20%
-2.20%
-8.92%
4340.SR
1.00%
52.10%
3.17%
8.05%
4334.SR
84.90%
67.00%
3.84%
7.01%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Bottom line: Taleem REIT Fund demonstrates a compelling mix of top-line expansion, strong profitability, and robust liquidity in QQ2 2025, underpinned by an elevated dividend yield. The core revenue growth coupled with high operating and EBITDA margins suggests a durable earnings platform, supported by solid asset yields and prudent cost control. However, the exceptionally long receivables cycle introduces cash flow timing risk, and the payout policy—while attractive for income investors—raises concerns about dividend sustainability if cash flows falter. Relative to peers, Taleem trades at attractive valuations with a below-1 price-to-book and a mid-range P/E, while offering one of the highest indicated dividend yields. Investors should monitor rent escalations and occupancy trends within the educational asset class, debt maturity and refinancing plans, and any regulatory developments affecting distributions.
If the company can maintain its current cash conversion and manage DSO effectively, Taleem could deliver continued earnings visibility and an appealing income stream. In a benchmark comparison, Taleem’s combination of liquidity strength and dividend yield provides a compelling risk-adjusted dividend story, albeit with caveats around cash flow timing and sector concentration. An investment stance would be to overweight Taleem for income-oriented portfolios with a medium-term horizon, while maintaining awareness of the forward-looking risks and awaiting an earnings call transcript to calibrate the management’s outlook and potential guidance.
Key Investment Factors
Growth Potential
Growth potential centers on expanding the educational property footprint and diversifying tenant mix across stable, long-duration leases. The SOCI (Saudi operating environment) backdrop supports acquisitions, with Taleem’s liquidity and low capital costs enabling accretive deals. A potential uplift in occupancy and rent escalations would further enhance cash flow stability and dividend coverage.
Profitability Risk
Key risks include high receivables days (DSO ~206 days) indicating potential collection timing risk, ongoing regulatory changes affecting REIT distributions, and concentration risk in education/training assets. Payout policy above earnings (190.8%) may constrain dividend sustainability if cash flows tighten; interest rate movements could affect refinancing costs.
Financial Position
Strong liquidity metrics (current ratio 31.66, cash ratio 1.525) and a moderate debt position (debt ratio 0.351) support flexibility for capital deployment. However, the high dividend yield and payout ratio require careful monitoring of cash conversion and debt service coverage, especially in a rising-rate environment.
SWOT Analysis
Strengths
High revenue growth YoY (TTM QQ2 2025) with SAR 33.43m revenue and EBITDA of SAR 31.00m.
Very strong liquidity metrics (current ratio 31.66, quick ratio 31.66, cash ratio 1.525).
Attractive dividend yield of 6.68% relative to peers; supportive dividend policy in a REIT structure.
Moderate leverage with debt ratio of 0.351 and debt-to-equity 0.544, allowing for strategic acquisitions without excessive risk.
Weaknesses
Reliance on a sizeable portion of income from rental assets tied to the educational sector, which could introduce sector concentration risk.