Red Sea International Company Announces Q2 2025 Results
Red Sea International Company has announced its consolidated financial results for the first six months of 2025, with a net profit of 1.87 million Saudi Riyals, marking a 168% improvement compared to the first half of 2024. Net profit for the second quarter of 2025 was 6.39 million Saudi Riyals, a 31% decrease compared to the second quarter of 2024.
By the end of the second quarter of 2025, revenues for the first six months reached 1,479 million Saudi Riyals, a 54% improvement over the first half of 2024 results. Second-quarter 2025 revenues were 779 million Saudi Riyals, a 4% increase compared to the second quarter of 2024. This increase is primarily due to improved performance and project completion rates.
Operating profit for the first six months of 2025 was 42.8 million Saudi Riyals, a 44% improvement compared to the first six months of 2024. Operating profit for the second quarter of 2025 was 23.72 million Saudi Riyals, a 10% decrease compared to the second quarter of 2024.
This improvement in first-half performance comes despite a decrease in profitability due to a purely accounting procedure related to the Amortization of Purchase Price Allocation. In 2024, a purchase price allocation was made for the acquisition of First Fix for Electrical Works Co. Ltd., resulting in an accounting loss of 121.75 million Saudi Riyals for 2024 and 48.7 million Saudi Riyals for the first half of 2025.
These losses are merely an accounting treatment related to the acquisition process, stipulated and approved by international financial reporting standards, and are not considered an actual operating loss. This has been clarified in the notes to the consolidated financial statements related to this disclosure for the financial periods ending March 31, 2025, and June 30, 2025.
To address the impact of the purchase price allocation provision, the company is currently implementing the board of directors’ recommendation to increase capital by converting debt owed to minority shareholders (sellers) in First Fix (related to the deferred portion of the acquisition price) into shares. The company has submitted this request to the Capital Market Authority, where it is still under review, and a decision is expected soon.
