Khaled Zafer & Bros. experienced a significant decline in profits during fiscal year 2025, with the company announcing a 71.5% decrease in net profit. The company recorded a net profit of SAR 3.55 million, compared to SAR 12.48 million in the previous year. This decline reflects the considerable challenges the company faced in a complex operating environment, necessitating a thorough analysis of the factors influencing the financial performance of the logistics sector in Saudi Arabia.
Reasons for the decline in profits of Khaled Zafer & Brothers and the operational challenges
Data released by the company on the Saudi Stock Exchange (Tadawul) revealed that the primary reason behind the decline in Khalid Zafer & Bros.' profits was a nearly 31% decrease in business volume. This decline was a direct result of the geopolitical tensions in the region, which have generally impacted supply chains and regional and international shipping. Additionally, the company faced a significant increase in operating costs, particularly due to the rise in diesel fuel prices, a crucial component of the transportation and logistics sector. Furthermore, the company's transition to a publicly traded company also contributed to increased administrative expenses, fulfilling the governance and regulatory compliance requirements imposed by the financial market. This strategic shift, while costly in the short term, is expected to enhance sustainability and transparency in the future.
The general context of the logistics sector and the impact of regional tensions
The logistics sector is a cornerstone of Saudi Arabia’s Vision 2030, as the Kingdom aims to become a global logistics hub connecting three continents. Historically, this sector has experienced rapid growth thanks to massive government investments in infrastructure and ports. However, the nature of this sector makes it highly sensitive to global changes. Recent geopolitical tensions in the Middle East, particularly those affecting vital waterways, have impacted shipping and insurance costs, leading to a slowdown in some trade operations. This impact is not limited to the local level but extends regionally and internationally, forcing logistics companies to reassess their routes and operational strategies to ensure business continuity and mitigate risks. This explains the temporary financial pressures currently facing companies operating in this sector.
Details of cash distributions to shareholders for the year 2025
Despite financial challenges and declining profits, the company was keen to reward its shareholders. In this regard, the company's board of directors, at its meeting held on Wednesday, recommended the distribution of cash dividends to shareholders for the second, third, and fourth quarters of fiscal year 2025. The total value of these distributions amounted to SAR 519,150. The number of shares eligible for dividends is 3.5 million, representing a distribution rate of 1.7% of the share's par value, thus amounting to SAR 0.17 per share.
Earnings entitlement and future distribution dates
The company clarified that the cash dividend entitlement will be for shareholders who own shares in the company at the close of trading on the day of the General Assembly meeting, the date of which will be announced later. Shareholders must also be registered in the company's shareholder register at the Securities Depository Center Company (Edaa) at the close of trading on the second trading day following the entitlement date. The company confirmed that the actual dividend distribution date will be determined later, in accordance with the relevant regulatory rules and procedures followed in the Saudi financial market, to ensure transparency and protect the rights of all shareholders.
