In a significant disclosure reflecting operational and financial challenges, Mayar Holding Company announced that its accumulated losses have reached 69.2% of its capital of SAR 60 million. This announcement was based on the company's unaudited internal financial results for the period ending December 31, 2025, where the total value of these losses reached SAR 41.53 million, necessitating swift action in accordance with the regulations of the Saudi financial market.
details of its financial performance and the reasons for the decline
in its statement published on the Saudi Stock Exchange (Tadawul) website. The shift from profitability in the previous year to a net loss in the current period is attributed to a number of interconnected factors that impacted its main sectors. Foremost among these reasons is the decrease in operating revenues, particularly in the animal feed sector, which faced severe price pressures leading to a decline in sales and a contraction in profit margins. This was exacerbated by rising production costs and increased operating expenses amidst volatile commodity markets.
In the elevator sector, the company faced challenges including delays in signing new contracts compared to the same period last year, as well as setbacks in the sukuk issuance program intended to improve working capital. These delays resulted in a liquidity shortfall for efficient operations, further impacting the company's overall performance.
The burdens of expansion and financing costs
were not the only reasons for the decline in sales; they also included a significant increase in general and administrative expenses. The company attributed this increase primarily to acquisitions it made in the elevator sector during the second half of 2024. Although these acquisitions were intended for future growth, they negatively impacted the current financial statements before yielding their intended benefits. Furthermore, increased financing expenses, resulting from higher borrowing costs and provisions for credit losses, placed an additional financial burden on the company.
and legal standpoint
, accumulated losses exceeding 50% of a company's capital fall under Article 150 of the Companies Law (or its equivalent in the applicable Capital Market Authority regulations). These regulations mandate the board of directors to convene a general assembly of shareholders within a specified timeframe to make critical decisions, either by addressing the losses through capital reduction or increase, or by taking other measures to ensure the company's continuity and protect shareholders' rights.
Economic Implications and Next Steps:
This announcement serves as a significant indicator for investors regarding the need to restructure the company's operating model. The Board of Directors confirmed in its statement that it is currently working to address the working capital shortfall and is implementing plans to reduce costs and improve productivity in the coming period. Management recommends the immediate initiation of the necessary regulatory procedures for disclosure and transparency, ensuring the protection of shareholder interests and returning the company to a path of financial recovery.
