MEFIC REIT Fund (4346.SR) Q4 2023 Earnings Report

In QQ4 2023, MEFIC REIT Fund reported revenue of SAR 28,765,729 with gross profit of SAR 13,475,279, yielding a gross margin of 46.8%. EBITDA totaled SAR 5,921,640 (EBITDA margin 20.6%), while operating income posted a loss of SAR 2,545,530 (operating margin -8.8%). The quarter culminated in a net loss of SAR 24,453,281 (net margin -85.0%), driven primarily by total other income and expenses net of SAR -21,907,751, which overshadowed the operating performance. This indicates earnings quality challenges in QQ4 2023, where non-operating items materially affected the bottom line despite a positive underlying cash flow profile.

Cash generation remained positive in QQ4 2023, with net cash provided by operating activities of SAR 7,623,903 and free cash flow of SAR 7,623,903. Cash and cash equivalents ended the period at SAR 8,310,893. The balance sheet shows total assets near SAR 1.00 billion and total debt of SAR 447.26 million, with net debt approximately SAR 438.95 million and an equity base of SAR 513.16 million, indicating a modestly leveraged but still durable capital structure for a diversified REIT. However, several balance sheet line items appear anomalous (e.g., negative current assets in the provided data), warranting cautious interpretation and potential data quality review.

From an investment perspective, management has not issued explicit forward guidance in the QQ4 2023 release. The market will likely focus on portfolio occupancy, rent collection, near-term refinancing risk, and the ability to translate operating cash flow into sustainable distributions. Relative to peers, MEFIC REIT Fund trades at a subdued price-to-book (~0.71) and a high price-to-sales (~12.6), suggesting a discount to book value despite weak near-term profitability.