In a strategic move reflecting strong confidence in its operational future and sustainable growth, Naqi Water, a leading bottled water company in Saudi Arabia, announced that it has received letters from two of its major shareholders agreeing to forgo a significant portion of their scheduled cash dividends for the next three fiscal years. This initiative aims to strengthen the company's financial position and enable it to proceed with its ambitious expansion plans.
Background on Naqi Company and the Saudi market
Naqi Water Company was established and has grown to become a major player in the Kingdom's bottled water and beverage market, a highly competitive and continuously growing sector driven by population growth and increased health awareness. Since its listing on the Saudi Stock Exchange (Tadawul), the company has sought to solidify its position by expanding production and improving its distribution networks. This decision comes within a broader economic context in which the Kingdom, as part of its Vision 2030, aims to empower major national companies and enhance the private sector's role in economic development.
Details of the concession and its strategic objectives
According to the company's official statement, the shareholders are the Chairman of the Board, Mr. Amin bin Abdullah Al-Mallah, and the Saqa United Group, each holding a 35% stake in the company's total shares. The transfer includes the following:
- 50% From the dividend distributions for the year 2026.
- 55% From the dividend distributions for the year 2027.
- 60% From the dividend distributions for the year 2028.
The company explained that this measure primarily aims to maintain and strengthen its financial position and ensure the sustainability of its balanced investment stance. By reinvesting these funds internally, “Naqi” will be able to finance its previously announced expansion projects and growth plans without resorting to significant external borrowing, thus reducing financial risks and enhancing its operational flexibility.
Expected impact on the company and investors
This move sends a strong and direct message to the market and investors in general, indicating that the major shareholders have unwavering confidence in the company's current performance and the executive management's ability to deliver future growth. Domestically, this decision strengthens Naqi's competitiveness and enables it to capture a larger market share. It also boosts other investors' confidence in the stock, demonstrating that key decision-makers prioritize long-term value over short-term gains. This financial stability is expected to positively impact the stock's performance on the Saudi Stock Exchange (Tadawul) and enhance its appeal to both institutional and local investors.
