Exchange: SAU | Sector: Real Estate | Industry: Real Estate Development
Q2 2025
Published: Jun 30, 2025
Earnings Highlights
Revenue of $639.41M up 97.7% year-over-year
EPS of $0.04 increased by 31.5% from previous year
Gross margin of 20.3%
Net income of 21.32M
"N/A" - N/A
Ladun Investment Company (9535.SR) QQ2 2025 Results: Real Estate Development – Revenue Growth and Margin Resilience Amid Capital Intensity
Executive Summary
Ladun Investment Company delivered a robust Q2 2025 with revenue of SAR 639,412,544 and a gross profit of SAR 129,614,786, yielding a gross margin of 20.27%. EBITDA stood at SAR 78,465,942 and operating income reached SAR 61,645,568, producing an operating margin of 9.64%. Net income came in at SAR 21,321,066 and earnings per share (EPS) SAR 0.0426, translating to a year-over-year (YoY) net income growth of 31.49% and a YoY revenue surge of 97.73%. The quarter exhibits meaningful top-line momentum and early signs of operating leverage within its development activities, underpinned by milestone-driven project execution and a disciplined cost structure.
However, liquidity and balance sheet dynamics warrant careful monitoring. Liquidity ratios are tight: current ratio 0.772, quick ratio 0.545, and cash ratio 0.0241 indicate limited near-term liquidity against working capital needs. Days sales outstanding (DSO) are elevated at 110.21 days and the cash conversion cycle extends to 142.65 days, highlighting tight cash conversion in a capital-intensive business model. Leverage remains meaningful, with total debt to capitalization at 60.9% and a debt-to-equity ratio of 1.555, even as operating cash flow per share SAR 0.403 and free cash flow per share SAR 0.394 underscore recurring cash generation capabilities. Relative valuation remains elevated, with price-to-book around 2.75 and price-to-earnings near 21.11, suggesting investors are pricing in growth and project execution potential, while also recognizing execution and financing risks amid market cyclicality.
On a competitive basis, Ladun’s margin profile compares competitively with peers in certain metrics (gross margin around 20.3% vs peer range broadly from ~13.5% to ~48% depending on asset mix and project stage). The company’s quarter-to-quarter momentum and longer-term pipeline remain the principal drivers of potential upside. The absence of a disclosed earnings call transcript prevents direct incorporation of management commentary into this summary; investors should watch for guidance on project backlog, capex allocation, and refinancing plans as the remaining 2025 calendar unfolds.
Key Performance Indicators
Revenue
639.41M
QoQ: 0.00% | YoY:97.73%
Gross Profit
129.61M
20.27% margin
QoQ: 0.00% | YoY:88.13%
Operating Income
61.65M
QoQ: 0.00% | YoY:125.81%
Net Income
21.32M
QoQ: 0.00% | YoY:31.49%
EPS
0.04
QoQ: 0.00% | YoY:31.48%
Revenue Trend
Margin Analysis
Key Insights
Gross Margin: 20.27%
Operating Margin: 9.64%
Pretax Margin: 3.42%
Net Margin: 3.33%
Debt Ratio: 0.356; Debt/Equity: 1.555; Long-Term Debt to Capitalization: 0.190; Total Debt to Capitalization: 0.609
Financial Highlights
Revenue: SAR 639,412,544; YoY +97.73%; QoQ 0.00%
Gross Profit: SAR 129,614,786; YoY +88.13%; QoQ 0.00%
Operating Income: SAR 61,645,568; YoY +125.81%; QoQ 0.00%
Net Income: SAR 21,321,066; YoY +31.49%; QoQ 0.00%
EPS: SAR 0.0426; YoY +31.48%; QoQ 0.00%
Margins and profitability:
- Gross Margin: 20.27%
- Operating Margin: 9.64%
- Pretax Margin: 3.42%
- Net Margin: 3.33%
Efficiency and leverage:
- Debt Ratio: 0.356; Debt/Equity: 1.555; Long-Term Debt to Capitalization: 0.190; Total Debt to Capitalization: 0.609
- Asset Turnover: 0.224; Fixed Asset Turnover: 5.94
- Receivables Turnover: 0.817; Days Sales Outstanding: 110.21; Payables Turnover: 1.945; Inventory Turnover: 1.143
- Cash Flow: Operating Cash Flow per Share 0.403; Free Cash Flow per Share 0.394; Cash per Share 0.145; Capex Coverage Ratio 47.72
Liquidity and capital structure:
- Current Ratio: 0.772; Quick Ratio: 0.545; Cash Ratio: 0.0241
- Cash Conversion Cycle: 142.65 days; Operating Cash Flow to Sales Ratio: 0.315; Free Cash Flow Operating Cash Flow Ratio: 0.979
Valuation and market metrics:
- Price to Book Value: 2.75; Price to Sales: 2.82; Price to Earnings: 21.11; EV/EBITDA: 35.29; Enterprise Value Multiple: 35.29
- Price Fair Value: 2.75
- Dividend Yield: 0.00%
Notes: All peer comparisons are based on the latest available figures and are indicative of relative positioning in the Saudi real estate development segment.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
639.41M
97.73%
0.00%
Gross Profit
129.61M
88.13%
0.00%
Operating Income
61.65M
125.81%
0.00%
Net Income
21.32M
31.49%
0.00%
EPS
0.04
31.48%
0.00%
Key Financial Ratios
currentRatio
0.77
grossProfitMargin
20.3%
operatingProfitMargin
9.64%
netProfitMargin
3.33%
returnOnAssets
0.75%
returnOnEquity
3.26%
debtEquityRatio
1.56
operatingCashFlowPerShare
$0.4
freeCashFlowPerShare
$0.39
priceToBookRatio
2.75
priceEarningsRatio
21.11
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings call transcript was provided in the data set. Consequently, management quotes and thematic takeaways from the QQ2 2025 call could not be incorporated. Investors are advised to review any subsequent earnings materials or investor presentations for direct management commentary on pipeline execution, project milestones, and guidance.
N/A
— N/A
N/A
— N/A
Forward Guidance
No explicit forward guidance is disclosed in the provided data. Given the sizable YoY revenue uplift and a pipeline-driven growth trajectory, a cautious but constructive view is warranted. Expected drivers include continued progress on key development projects, selective asset monetization or recycling, and disciplined capex management. Key uncertainties to monitor include: (1) project completion cadence and timing risk, (2) funding costs and refinancing risk in a higher-for-longer rate environment, (3) working capital needs and structural liquidity constraints, and (4) regulatory or macroeconomic shifts affecting Saudi real estate demand. Management commentary in future disclosures should clarify target backlog, capex plans, and refinancing strategies to bolster investor visibility.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
9535.SR Focus
20.27%
9.64%
3.26%
21.11%
9530.SR
22.80%
-0.99%
-7.59%
-6.91%
9543.SR
13.50%
7.29%
18.60%
5.17%
9532.SR
47.60%
7.40%
2.19%
18.88%
9546.SR
32.80%
14.50%
6.74%
12.38%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Medium-to-long-term constructive stance tempered by near-term liquidity and leverage considerations. The QQ2 2025 results show meaningful top-line growth and margin resilience, supported by a developing project pipeline. If Ladun can translate pipeline milestones into consistent cash flow while addressing liquidity constraints and refinancing challenges, the company could realize meaningful earnings leverage and value creation. Investors should monitor: (1) project backlog progression and timing, (2) capex plans and any asset recycling initiatives, (3) refinancing or debt maturity schedules, and (4) management guidance on 2025–2026 targets and anticipated returns from development activities. In valuation terms, Ladun trades above asset-level metrics in some respects (e.g., P/E ~21.11, P/B ~2.75), suggesting the market prices in growth upside; downside risk remains tied to liquidity and execution risk in a capital-intensive segment.
Key Investment Factors
Growth Potential
Strong revenue growth driven by a robust development pipeline and milestone-driven milestones; potential margin expansion if project execution remains on track, enabling operating leverage and higher EBITDA contribution.
Profitability Risk
Liquidity constraints reflected by a low cash ratio (0.0241) and elevated DSO (110.21 days); high leverage (debt to capitalization 60.9%) and refinancing risk amid a volatile capital market; execution risk across a capital-intensive development cycle; exposure to real estate market cycles and regulatory changes.
Financial Position
Solid profitability with margins above peers in certain segments; positive OCF and FCF per share indicate continued cash generation capacity, but balance sheet stress markers (low liquidity, high leverage) require prudent liquidity management and capex discipline.
SWOT Analysis
Strengths
Strong YoY revenue growth and improving operating leverage in a capital-intensive development portfolio.
Healthy gross margin relative to several regional peers (around 20.3%).
Positive quarterly OCF and FCF per share indicative of ongoing cash generation capability.
Established position in the Saudi real estate development market with a diversified project mix.
Weaknesses
Low liquidity metrics (current ratio 0.772, cash ratio 0.0241) and extended cash conversion cycle (~143 days).
High leverage (debt to capitalization 0.609; debt/equity 1.555) and refinancing risk in a tightening credit environment.
Elevated DSO (110.21 days) suggesting potential collection and working-capital pressures.
Significant dependence on project milestones; equity market sensitivity to project delays.
Opportunities
Saudi Vision 2030-driven demand for commercial, residential, and mixed-use real estate assets could sustain backlog and pricing power.
Pipeline optimization and potential asset recycling or monetization to improve liquidity and reduce leverage.
Potential partnerships or joint ventures to de-risk large developments and spread capital intensity.
Threats
Macro and real estate cycle risk affecting demand, occupancy, and project profitability.
Rising financing costs and tighter credit conditions impacting project funding and refinancing terms.
Execution risk from large-scale developments and cost inflation pressures.