Notes to the Consolidated Financial Statements

SAL Saudi Logistics Services Company (the “Company” or “SAL”) is a Saudi Joint Stock Company registered in Kingdom of Saudi Arabia under Commercial Registration number 4030367493 and Unified Identification Number 7016076056 dated 17 Safar 1441H corresponding to 16 October 2019. The Company was converted from a limited liability company to a closed joint stock company pursuant to resolution number 265 dated 11 Sha’ban 1442H (corresponding to 24 March 2021) issued by the Ministry of Commerce.

On 1 November 2023, the Company completed its Initial Public Offering (“IPO”) and its ordinary shares were listed on the Saudi Stock Exchange (“Tadawul”). Accordingly, the Company has been categorised as a Saudi Joint Stock Company.

On 9 October 2025, the Company established a Subsidiary in the Kingdom of Saudi Arabia named SAL Zones Company ("SAL Zones"), a Simplified Joint Stock Company. The subsidiary has a paid-up capital of 500,000 and an authorized capital of 1.4 billion. The Company owns 100% of its capital.

The main activities of the Company and its subsidiary (collectively referred to as the “Group”) comprise the provision of cargo ground handling services at airport terminals, freight brokerage services, warehouse management services, administrative services, storage services warehousing and transportation, supporting the Company’s strategic expansion and revenue diversification goals.

The Company’s registered office is located at the following address:

Prince Sultan Street,
Albasatin District,
P.O. Box 23716, Jeddah 8628,
Kingdom of Saudi Arabia.

The accompanying consolidated financial statements include accounts of the Company and its subsidiary:

2.1 Statement of compliance

These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards as endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements that are endorsed by Saudi Organization for Chartered and Professional Accountants (“SOCPA”) (collectively referred to as “IFRS as endorsed in Kingdom of Saudi Arabia”). The Group has prepared these consolidated financial statements on the basis that it will continue to operate as a going concern.

2.2 Basis of consolidation

These consolidated financial statements are the first statutory consolidated financial statements of the Group and have been prepared for the year ended 31 December 2025. They comprise the financial statements of the Company and its subsidiary, both of which have same reporting date and applies consistent accounting policies.

The Group controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Accordingly, control exists when all of the following conditions are met:

• power over the investee, being existing rights that give the Group the current ability to direct the relevant activities of the investee;
• exposure, or rights, to variable returns from its involvement with the investee; and
• he ability to use its power over the investee to affect its returns.

Control is generally presumed to exist when the Group holds a majority of the voting rights. Where the Group holds less than a majority of the voting or similar rights, it considers all relevant facts and circumstances in assessing whether control exists, including contractual arrangements with other vote holders, rights arising from other contractual arrangements, and the Group’s existing and potential voting rights.

The Group reassesses whether it controls an investee if facts and circumstances indicate that there have been changes to one or more of the elements of control.

Consolidation of a subsidiary commences from the date on which the Group obtains control and ceases when the Group loses control. The assets, liabilities, income and expenses of a subsidiary are included in the consolidated financial statements from the date control is obtained until the date control ceases.

Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent and to non-controlling interests, even if this results in non-controlling interests having a deficit balance.

Where necessary, adjustments are made to the consolidated financial statements of subsidiaries to align their accounting policies with those of the Group. All intra-group balances, transactions, income, expenses and cash flows are eliminated in full on consolidation.

Changes in the ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

If the Group loses control of a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interests and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any retained interest is recognised at fair value at the date control is lost.

2.3 Basis of measurement

These consolidated financial statements are prepared under the historical cost basis.

2.4 Functional and presentation currency

These consolidated financial statements are presented in Saudi Arabian Riyals (), which is the functional and presentational currency of the Group, and all values are rounded to the nearest thousand (‘000), except when otherwise indicated.

2.5 Significant Accounting Judgments, Estimates and Assumptions

The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect application of accounting policies, reported amounts of income, expenses, assets and liabilities, and the accompanying disclosures including disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

(a) Judgements

In the process of applying the Group’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the consolidated financial statements:

Going concern

The Group’s management has made an assessment of the Group’s ability to continue as a going concern and is satisfied that the Group has the resources to continue in business for the foreseeable future. Furthermore, the management is not aware of any material uncertainties that may cast significant doubt on the Group’s ability to continue as a going concern. Therefore, the consolidated financial statements have been prepared on a going concern basis.

Determining the lease term of contracts with renewal and termination options – Group as lessee

The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Group has the option, under some of its leases to lease the assets for additional terms

The Group applies judgement in evaluating whether it is reasonably certain to exercise the option to renew. That is, it considers all relevant factors that create an economic incentive for it to exercise the renewal. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise (or not to exercise) the option to renew (e.g., a change in business strategy). The Group included the renewal period as part of the lease term for leases due to the significance of leased assets to its operations.

(b) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the date of preparing the consolidated financial statements, that have a significant risk of causing material adjustments to the carrying amounts of assets and liabilities within the subsequent financial periods, are described below. The Group based its assumptions and estimates on parameters available at the date of preparing the consolidated financial statements. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

Provision for expected credit losses (ECL) of trade receivables

The Group uses a provision matrix to calculate ECL for trade receivables. The provision matrix is initially based on the Group ’s historical observed default rates. The Group calibrates the matrix to adjust the historical credit loss experience with forward-looking information. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed. The assessment of the correlation between historical observed default rates, forecast economic conditions and ECL is a significant estimate. The amount of ECL is sensitive to changes in circumstances and of forecast economic conditions. The Group ’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future. The information about the ECL on the Group ’s trade receivables is disclosed in note 10.

Useful lives of property and equipment and intangible assets

The Group’s management determines the estimated useful lives of its property and equipment and intangible assets for calculating depreciation and amortisation. This estimate is determined after considering the expected usage of the asset or physical wear and tear. The management believes that residual may not result in significant change to depreciation or amortisation charge and carrying amount of the assets. Management also believes that the straight-line depreciation and amortisation reflects the pattern of consumption of economic benefits. Management reviews the residual value and useful lives annually and future depreciation charge would be adjusted where the management believes the useful lives and residual values differ from previous estimates.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or Cash Generating Unit (CGU) exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal is based on available data from binding sales transactions, at arm’s length for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use is based on a discounted cash flows (DCF) model. The cash flows are derived from the estimated budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is sensitive to discount rate used for the discounted cash flows model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Measurement of employees’ benefit obligations

The present value of defined benefit obligations regarding employee’s end of service benefit plan is determined using actuarial valuations. An actuarial valuation requires making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate; withdrawal before normal retirement age, future salary increases and mortality rates and employee turnover rate. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, the defined benefit obligations are highly sensitive to changes in these assumptions. All assumptions are reviewed at each annual reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate, management considers the market yield on high quality corporate/government bonds extrapolated as needed along the yield curve to correspond with the expected term of the defined benefit obligation.

The mortality rate is based on publicly available mortality tables for country. Those mortality tables are subject to change only at intervals in response to demographic changes. Future salary increases are based on expected future inflation rate for the country as well as seniority, promotion, demand, and supply in the employment market. Further details about the employee end of service benefits are provided in note 16.

Determination of discount rate for present value calculations of lease liabilities

Discount rates represent the current market assessment of the risks specific to each cash flow stream, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Group and is derived from recent market transactions and a market yields overview.

3.1 Current versus non-current classification

The Group presents assets and liabilities in the consolidated statement of financial position based on current/non-current classification. An asset is current when it is:

• Expected to be realised or intended to be sold or consumed in the normal operating cycle;
• Held primarily for the purpose of trading;
• Expected to be realised within twelve months after the reporting period; or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current. A liability is current when it is:

•   expected to be settled in the normal operating cycle;
• held primarily for the purpose of trading;
• due to be settled within twelve months after the reporting period; or
• not having the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.

The Group classifies all other liabilities as non-current.

3.2 Foreign currencies

Transactions in foreign currencies are initially recorded by the Group in its functional currency spot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognised in consolidated statement of profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item. In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Group initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Group determines the transaction date for each payment or receipt of advance consideration.

3.3 Property and equipment

Property and equipment are stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Such cost includes borrowing costs for long-term construction projects if the recognition criteria are met. When a comprehensive inspection is performed, its cost is recognised in the carrying amount of the equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in statement of profit or loss and other comprehensive income as incurred. Subsequent expenditure is capitalized only if it is probable that future economic benefits associated with the expenditure will flow to the Group.

Leasehold improvements are depreciated over the shorter of estimated useful life or the term of the lease. Depreciation is calculated to write off the cost of property and equipment using straight-line method over the estimated useful lives which are as follows:

Lease hold improvements 3-21 years

Equipment 3-19 years

Furniture and fixtures 3-7 years

Computers and IT equipment 3-10 years

An item of property and equipment (“the asset”) and any significant part initially recognised, is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss and other comprehensive income when the asset is derecognised.

The residual values, useful lives and depreciation methods for property and equipment are reviewed on annual basis at the end of each fiscal year, and adjustments are made whenever necessary.

Capital working in progress

Capital work in progress (“CWIP”) is measured at cost less impairment losses, if any, and not depreciated until such time the assets are available for use and transferred to the respective category under property, and equipment. Finance cost on borrowings to finance the construction of the assets are capitalized during the period of time that is required substantially to complete and prepare those assets for its intended use, if the recognition criteria are met

3.4 Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets are not capitalised, and the related expenditure is reflected in the statement of profit or loss and other comprehensive income in the period in which the expenditure is incurred. Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Further, capital work in progress is not amortised.

The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss and other comprehensive income in the expense category that is consistent with the function of the intangible assets. Gains or losses arising from disposal of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss and other comprehensive income when the asset is derecognised.

The intangibles include software, and is amortised on straight line basis. The estimated useful life of software is three to ten years.

3.5 Financial instruments

Non-Derivative Financial Assets

The Group classifies its financial assets based on their subsequent measurement into two categories: assets measured at fair value (either through Other Comprehensive Income (OCI) or through profit or loss) and assets measured at amortised cost. The classification is determined by the Group’s business model for managing the financial assets and the contractual terms governing the cash flows of the assets.

For financial assets measured at fair value, gains and losses are recognised either in profit or loss or in OCI. For investments in equity instruments that are not held for trading, the accounting treatment depends on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI). Investments designated as FVOCI, where management intends to sell such investments within 12 months from the financial year-end, are classified as current assets.

Financial assets are initially recognised on the trade date, which is the date when the Group becomes a party to the contractual provisions of the instrument. A financial asset is derecognised when the contractual rights to receive cash flows from the asset expire or when the Group transfers the rights to receive the contractual cash flows in a transaction that transfers substantially all the risks and rewards of ownership. Any interest in the transferred financial asset that is retained or created by the Group is recognised as a separate asset or liability.

Financial assets and liabilities are offset, and the net amount is presented in the Statement of Financial Position, only when the Group has a legal right to offset the amounts and intends to settle them on a net basis or to realise the asset and settle the liability simultaneously.

The Group’s portfolio of non-derivative financial assets includes the following categories:

Financial Assets at Amortised Cost

Financial assets held for the collection of contractual cash flows, where those cash flows represent solely payments of principal and interest (SPPI), are measured at amortised cost. Any gain or loss on a debt investment measured at amortised cost is recognised in the statement of profit or loss when the asset is derecognised or impaired. Interest income from these financial assets is recognised in finance income using the effective interest rate method

Financial Assets at FVOCI

The Group generally elects to recognise changes in the fair value of investments in equity in OCI. These changes are accumulated within the 'other reserve' under equity. The Group may transfer this accumulated amount from other reserve to retained earnings when the relevant shares are derecognised. Dividends from such investments are recognised in the statement of profit or loss as other income when the Group’s right to receive payments is established. Accumulated gains and losses on these financial assets are never recycled to the statement of profit or loss.

Financial assets are initially recognised on the trade date, which is the date the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire or when it transfers the rights to receive the contractual cash flows in a transaction that transfers substantially all the risks and rewards of ownership. Any retained or created interest in the transferred financial asset is recognised as a separate asset or liability.

Non-Derivative Financial Liabilities

Financial liabilities are recognised initially on the trade date, which is the date the Group becomes a party to the contractual provisions of the instrument. A financial liability is derecognised when the Group’s contractual obligations are discharged, cancelled, or expire.

Financial assets and liabilities are offset, and the net amount is presented in the statement of financial position, only when the Group has a legal right to offset the amounts and intends to either settle them on a net basis or to realise the asset and settle the liability simultaneously.

The Group initially recognises non-derivative financial liabilities at fair value, adjusted for any directly attributable transaction costs. Following initial recognition, these financial liabilities are measured at amortised cost using the effective interest method. The Group’s non-derivative financial liabilities primarily include bank borrowings as well as trade and other payables.

3.6  Impairment of non-financial assets

At the end of each reporting period, the Group reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset (cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in the consolidated statement of profit or loss and comprehensive income, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in the consolidated statement of profit or loss and comprehensive income, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

3.7 Cash and cash equivalents

Cash and cash equivalents include cash in hand, bank balances and other deposits held with banks whose original maturity period is less than three months and are subject to insignificant change in its values

3.8 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit or loss and other comprehensive income net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

3.9 Leases

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Group as a lessee

The Group applies a single recognition and measurement approach for all leases. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.

If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset right-of-use assets are subject to impairment. Refer to the accounting policies under section Impairment of non-financial assets.

Lease Liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in- substance fixed lease payments or a change in the assessment to purchase the underlying asset.

Short-term leases and leases of low-value assets 

The Group applies the short-term lease recognition exemption to its short-term leases (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

3.10 Borrowing costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other borrowing costs are expensed in the period in which they are incurred in the statement of profit or loss and other comprehensive income. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

3.11 Employees’ benefit obligations

This represents employees’ benefit obligations under defined unfunded benefit plan. The employees’ benefit obligations, as required by Kingdom of Saudi Arabia Labour Law, are required to be provided based on the employees’ length of service.

The Group ’s net obligations in respect of employee benefits are calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and any unrecognised past service costs.

The discount rate used is the market yield on high quality corporate bonds at the reporting date that has maturity dates and the risk profile approximating the terms of the Group ’s obligations. The cost of providing benefits under the defined benefit plans is determined using the projected unit credit method to determine the Group ’s present value of the obligation, with independent actuarial valuations carried out every year.

The defined employees’ benefit obligations comprise the present value of defined benefit obligation as adjusted for any current and past service cost not yet recognised. Currently there are no past service costs.

The full amount of actuarial gains and losses are recognised in statement of profit or loss and other comprehensive income in the year in which they arise. The interest expenses are recognized in the Statement of Profit or Loss.

3.12 Earnings per share - EPS

The management determines basic earnings per share by dividing profit or loss attributable to ordinary equity holders (the numerator) by the weighted average number of ordinary shares outstanding (the denominator) during the year. The weighted average number of ordinary shares outstanding during the year is the number of ordinary shares outstanding at the beginning of the year, adjusted by the number of ordinary shares bought back or issued during the year multiplied by a time-weighting factor. The time-weighting factor is the number of days that the shares are outstanding as a proportion of the total number of days in the year, a reasonable approximation of the weighted average is adequate in many circumstances.

Diluted earnings per share amounts are calculated by dividing the profit attributable to equity shareholders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares. 

3.13 Segment information

A segment is a distinguishable component of the Group that engages in business activities from which it earns revenue and incurs costs. The operating segments are used by the management of the Group to allocate resources and assess performance. Operating segments exhibiting similar economic characteristics, services, class of customers where appropriate are aggregated and reported as reportable segments.

The Group has the following three strategic divisions, which are reportable segments and are defined and assessed by the Executive Committee when reviewing the Group ’s performance.

These divisions offer different products and services and are managed separately because of their different fundamentals.

The following summary describes the operations of each reportable segment:

3.14 Revenue

Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.

The Group ’s revenue consists of airline handling, cargo handling (terminal handling and ground handling) and logistics services (contract logistics, market access, freight forwarding, freight management, fulfilment services and transportation services).

The Group applies following five-step model as given in IFRS to determine when to recognize revenue and at what amount:

Rendering of services airline handling

The Group revenue from airline handling services includes revenue from cargo handled to and from the aircraft and other related services. Airline handling services are generally carried out in a short span of time and are recognized at point in time, when the services are rendered to the customer as per the terms of the related contract. Transaction price for airline handling services and related payment terms are based on the contracts with the customers. All services of the Group are delivered within Kingdom of Saudi Arabia. The Group acts as the principal when directly providing handling services using its own resources and employees.

Rendering of services terminal handling

The Group ’s terminal handling services consist of a series of distinct services, primarily warehousing and storage of the cargo, which are substantially the same and follow a consistent pattern of transfer to the customer. The Group acts as the principal in delivering these services, and the revenue is recognised when the performance obligation is satisfied by delivering the goods to the customers.

Rendering of logistics services

The Group provides freight forwarding, logistics, and warehouse management services to customers. Revenue is recognised when the contractual terms of the agreement are fulfilled. This occurs when the end user has accepted the services in accordance with the contract, when the acceptance provisions have lapsed, or when the Group has objective evidence that all acceptance criteria have been satisfied. Transaction price for logistics services and related payment terms are based on the contracts with the customers The determination of whether the Group acts as an agent or principal is based on the terms specified in the contract.

3.15 Finance income and finance cost

Finance income is recognised on an accrual basis using the effective yield basis. Finance cost mainly includes interest accrued on lease liabilities, long-term loan, bank charges and exchange rate losses.

3.16 Cost of revenue, selling and marketing, and general and administrative expenses

Cost of revenue

Service costs and direct operating expenses are classified as cost of revenue. This includes all expenses directly attributable or incidental to the core operating activities of the Group including but not limited to employee costs, rent expense, depreciation expense, aircraft handling and other operating costs.

Selling and marketing expenses

These include any costs incurred to carry out or facilitate selling activities of the Group. These costs typically include salaries of the sales staff, marketing and related expenses.

General and administrative expenses

These pertain to operation expenses which are not directly related to the services. These also include allocations of general overheads which are not specifically attributed to cost of revenue or selling and marketing expenses.

3.17 Zakat and tax

Zakat

The Group is subject to Zakat in accordance with the regulations of the Zakat, Tax and Customs Authority (“ZATCA”). Provision for Zakat for the Group is charged to the consolidated statement of profit or loss. Additional amounts payable, if any, at the finalization of final assessments are accounted for in the period in which these are determined.

Value Added Tax (“VAT”)

Assets and expenses are recognised net of amount of VAT, except when VAT incurred on a purchase of assets or services is not recoverable from the ZATCA, in which case, VAT is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable. The net amount of VAT recoverable from, or payable to, ZATCA is included as part of prepayments and other current assets or accruals and other current liabilities.

3.18 Dividends

The Group recognises a liability to pay a dividend when distribution is authorised and no longer at the discretion of the Group. As per the by-laws of the Group, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity. Interim dividends, if any, are recorded when approved by the Board of Directors.

3.19 Contingencies

Contingent liabilities are not recognised in the consolidated financial statements but are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote.

The Group applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or after 1 January 2025. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

Lack of exchangeability – Amendments to IAS 21

The amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity’s financial performance, financial position and cash flows.

The amendments are effective for annual reporting periods beginning on or after 1 January 2025. When applying the amendments, an entity cannot restate comparative information. The amendments did not have a material impact on the Group ’s consolidated financial statements.

The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group’s consolidated financial statements are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.

IFRS 18 Presentation and Disclosure in Financial Statements

In April 2024, the IASB issued IFRS 18, which replaces IAS 1 - Presentation of Financial Statements. IFRS 18 introduces new requirements for presentation within the statement of profit or loss, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income taxes and discontinued operations, whereof the first three are new.

The standard requires disclosure of newly defined management-defined performance measures, subtotals of income and expenses, and it also includes new requirements for aggregation and disaggregation of financial information based on the identified ‘roles’ of the primary financial statements (PFS) and the notes.

In addition, narrow-scope amendments have been made to IAS 7 Statement of Cash Flows, which include changing the starting point for determining cash flows from operations under the indirect method, from ‘profit or loss’ to ‘operating profit or loss’ and removing the optionality around classification of cash flows from dividends and interest. In addition, there are consequential amendments to several other standards.

IFRS 18, and the amendments to the other standards, are effective for reporting periods beginning on or after 1 January 2027, but earlier application is permitted and must be disclosed. IFRS 18 will apply retrospectively.

The Group is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements. The initial expected material impacts on Group’s financial statements are, as follows:

• Rental income may be classified in the operating category within the statement of profit or loss.
• Foreign exchange difference will be classified in the category where the related income and expense form the item giving rising to the foreign exchange difference.
• New disclosure will be added: (a) management-defined performance measures; (b) specified expense by nature if expenses are presented by function in the operating category of the statement of profit or loss; and (c) a reconciliation for each line item in the statement of profit or loss between the restated amounts presented applying IFRS 18 and the amounts previously presented applying IAS 1.
• Interest received and interest paid will be classified in the investing activities and financing activities, respectively, on the statement of cash flows.

IFRS 19 Subsidiaries without Public Accountability: Disclosures

In May 2024, the IASB issued IFRS 19, which allows eligible entities to elect to apply its reduced disclosure requirements while still applying the recognition, measurement and presentation requirements in other IFRS accounting standards. To be eligible, at the end of the reporting period, an entity must be a subsidiary as defined in IFRS 10, cannot have public accountability and must have a parent (ultimate or intermediate) that prepares consolidated financial statements, available for public use, which comply with IFRS standards.

IFRS 19 will become effective for reporting periods beginning on or after 1 January 2027, with early application permitted. As the Group’s equity instruments are publicly traded, it is not eligible to elect.

Amendments to the Classification and Measurement of Financial Instruments—Amendments to IFRS 9 and IFRS 7

In May 2024, the IASB issued Amendments to IFRS 9 and IFRS 7, Amendments to the Classification and Measurement of Financial Instruments (the Amendments). The Amendments include:

• A clarification that a financial liability is derecognised on the ‘settlement date’ and the introduction of an accounting policy choice (if specific conditions are met) to derecognise financial liabilities settled using an electronic payment system before the settlement date
• Additional guidance on how the contractual cash flows for financial assets with environmental, social and corporate governance (ESG) and similar features should be assessed
• Clarifications on what constitute ‘non-recourse features’ and what are the characteristics of contractually linked instruments
• The introduction of disclosures for financial instruments with contingent features and additional disclosure requirements for equity instruments classified at fair value through other comprehensive income (OCI).

The Amendments are effective for annual periods starting on or after 1 January 2026 with early adoption permitted for classification of financial assets and related disclosures only. The Group does not anticipate that the amendments will have a material effect on the Group’s consolidated financial statements.

Annual Improvements to IFRS Accounting Standards - Volume 11

In July 2024, the IASB issued nine narrow scope amendments as part of its periodic maintenance of IFRS accounting standards. The amendments include clarifications, simplifications, corrections or changes to improve consistency in IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 7 Financial instruments: Disclosure and its accompanying Guidance on implementing IFRS 7, IFRS 9 Financial Instruments, IFRS 10 Consolidated Financial Statements and IAS 7 Statements of Cash Flows.

The amendments will be effective for reporting periods beginning on or after 1 January 2026. Earlier application is permitted and must be disclosed.

The amendments are not expected to have a material impact on the Group’s consolidated financial statements.

Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7

In December 2024, the IASB issued Amendments to IFRS 9 and IFRS 7 - Contracts Referencing Nature-dependent Electricity. The amendments apply only to contracts that reference nature-dependent electricity; the amendments:

• Clarify the application of the ‘own-use’ requirements for in-scope contracts
• Amend the designation requirements for a hedged item in a cash flow hedging relationship for in-scope contracts
• Add new disclosure requirements to enable investors to understand the effect of these contracts on a Group’s financial performance and cash flows

The amendments will take effect for annual reporting periods starting on or after 1 January 2026. Early adoption is allowed, but it must be disclosed. The amendments concerning the own-use exception are to be applied retrospectively, while the hedge accounting amendments should be applied prospectively to new hedging relationships designated from the initial application date. Additionally, the IFRS 7 disclosure amendments must be implemented alongside the IFRS 9 amendments. If an entity does not restate comparative information, it cannot present comparative disclosures. The Group does not expect that the amendments will have a material impact on its consolidated financial statements.

The movement of property and equipment during the year is as follows:

Right-of-use assets

(a). The Group’s right-of-use assets mainly pertains to land and buildings and the movement of right-of-use assets during the year is as follows:

(b). During the year ended 31 December 2025, the Group executed four new lease agreements for Malham Zone, its Headquarters in Jeddah (ten-year term), land in Madinah (sixteen-year term) and land in Jeddah (twenty-year term). These agreements resulted in the recognition of right-of-use assets and lease liabilities amounting to 353.90 million (Malham Zone), 29.05 million (Headquarters), 7.41 million (Madinah) and 20.45 million (Jeddah) respectively.

(c). The depreciation expense for the year is allocated as follows:

Lease liabilities

(d). The movement of lease liabilities during the year is as follows:

(e). The lease modifications during the year related to reduction in lease rentals for the Jeddah and Riyadh Terminal Leases which resulted in net decrease in the carrying value of lease liabilities and right-of-use asset.

Similarly during the year 2024, the lease modification related to a reduction in lease rentals and finalizing a 20-year term for the Riyadh Terminal Lease which resulted in decrease in the carrying value of lease liabilities and right-of-use asset by 372 million. The Group has committed to upgrading the Riyadh terminal to the value up to 400 million and not below 350 million. Further, the Group also committed to upgrading the Dammam terminal to the value up to 100 million.

(f). The current and non-current portion of the lease liabilities is as follows:

The remaining undiscounted contractual maturities of lease liabilities at 31 December 2025 are disclosed in the note 30.

(g). In applying IFRS-16 ‘Leases’, the Group elected to use the recognition exemptions for lease contracts that, at the inception date, have a lease term of 12 months or less and do not contain a purchase option (short-term leases), and lease contracts for which the underlying asset is of low value (low-value assets) and variable leases amounted to 34.52 million (2024: 34.73 million) (note 22 and note 25).

(h). On 1 May 2024, the Group subleased a warehouse building in Riyadh. The Group has classified the sublease as finance lease as the Group transferred substantially all the risk and reward incidental to the leased asset. The improvement was completed in May 2024 and accordingly, the warehouse was subleased to the ultimate lessee.

(i).  Long-term loan receivable represent consideration receivable on the sale of permanent utilities on leasehold land from Jeddah Airports Company (lessor). As per the agreement, the amount is recoverable from the lease liability. The amount is not subject to any credit risk.

The movement of intangible assets during the year is as follows:

The amortisation for the year is allocated as follows:

Non-current assets comprise of the following:

Trade receivables comprise of the following:

The movement in allowance for expected credit loss is as follows:

Prepayments and other receivables comprise of the following:

11.1 Others include unbilled revenue and contract assets amounting to 7.36 million (2024: 22.35 million).

11.2 Prepayments and other receivables include 37.58 million (2024: 37.70 million) that are due from related parties (note 20).

Cash and cash equivalents comprise of the following:

12.1 At 31 December, all bank balances and short-term Murabaha deposits are maintained with local banks, which are rated at investment grade levels. Moreover, the carrying value of bank balances and short-term Murabaha deposits represents its maximum exposure to credit risk without taking into account any collateral and other credit enhancement and none of the balances is impaired at the reporting dates.

These short-term Murabaha deposits earn commission at an average rate of 5.3% per annum as at 31 December 2025 (2024: Nil).

At 31 December 2025, the authorized, issued and paid-up share capital of the Group is 800 million divided into 80 million shares of 10 each (2024: 800 million divided into 80 million shares of 10 each) and owned as follows:

This balance represents the total amounts appropriated from net income in prior years as statutory reserves in accordance with the requirements of the previous Companies Law and the Company’s By-Law prior to alignment with the new Companies Law. The utilization of these reserves is subject to the decisions of the shareholders' assembly.

The Group operates an approved unfunded employees’ end of service benefits plan (“EOSB”) for its employees as required by the Kingdom of Saudi Arabia Labour Law. The entitlement to these benefits is based upon the employees’ last drawn salary and length of service, subject to completion of minimum service period. The following table shows a reconciliation from opening balance to the closing balance of employees’ end of service benefits:

As at 31 December 2025 the valuation of EOSB liabilities was carried out by an independent firm of actuaries. The main financial assumptions used to calculate the indicative defined unfunded benefit plans liabilities are as follows:

The quantitative sensitivity analysis for principal assumptions is as follows:

The weighted average duration of the defined benefit obligation relating to Employees is 9.47 years (2024: 9.54 years).

The expected maturity analysis of undiscounted employees’ benefit obligations is as follows:

Trade payables comprise of the following: 

Trade payables include 33.11 million (2024: 48.71 million) payable to related parties (refer note 20).

Accrued expenses and other liabilities comprise of the following:

Accrued expenses and other liabilities includes 10.95 million (2024: 6.80 million) due to related parties (refer note 20).

During the year ended 31 December 2025, based on the recommendation of Company's Board of Directors, the shareholders in Ordinary General Meeting, held on 24 June 2025 (corresponding to 28 Dhul Al-Hijjah 1446H), approved cash dividend amounting to 114.4 million (1.43 per share) and authorised Board of Directors to declare interim dividends.

During the year ended 31 December 2025, on 19 February 2025, the Company's Board of Directors approved distribution of cash dividends amounting to 106.4 million (1.33 per share). Similarly, on 6 August 2025 and 3 November 2025, respectively, the Board of Directors of the Company approved distribution of cash dividends amounting to 121.6 million (1.52 per share) and 136.0 million (1.70 per share), respectively. (31 December 2024: 493.6 million (6.17 per share)).

Related parties includes the Group’s shareholders and Key management personnel of the Group entities controlled, jointly controlled or significantly influenced such parties . Pricing policies and terms of these transactions are approved by the Group’s management. All outstanding balances with these related parties are priced on mutually agreed terms. 

The Group’s parent entity is Saudi Arabian Airlines Corporation (“Saudia”). The Group’s ultimate parent entity is the Government of Saudi Arabia. The Group operates in an economic regime whereby there are various entities that are directly or indirectly controlled by the Government of Kingdom of Saudi Arabia through its government authorities, agencies, affiliations and other organizations, collectively referred to as government related entities (‘GRE’). The Group applies the exemption in IAS 24 Related Party Disclosures that allows to present reduced related party disclosures regarding transactions with government related parties.

• List of related parties other than government related entities
  

Name of related parties	Nature of relationships
Government and related entities	Shareholder of Parent Company and its affiliates
Saudi Arabian Airlines Corporation	Parent Company
Saudi Airlines Cargo Company	Entity under common control
Saudia Aerospace Engineering Industries Company	Entity under common control
Saudi Ground Services Company	Entity under common control
Saudi Airlines Air Transport Company	Entity under common control
Saudi Private Aviation	Entity under common control
Catrion Catering Holding Company	Entity under common control
Flyadeal Company	Entity under common control
Saudia Royal Fleet	Entity under common control
Prince Sultan Aviation Academy	Entity under common control

• Significant related party transactions with major shareholders, their subsidiaries, entities with significant influence, government entities and other related parties for the period are described as under:

	For the year ended
	31 December 2025 X ‘000	31 December 2024 X ‘000
Nature of transactions
Cost charge	(81,047)	(76,490)
Revenue	411,296	478,085
Shared service recovery (note 23)	1,099	1,194
Finance cost	(41,681)	(51,149)




Name of related parties	Nature of transactions	For the year ended 31 December
		2025 X '000	2024 X '000
Government-related entities	Revenue	99,399	155,316
	Cost charge	(42,479)	(35,078)
	Finance cost	(41,681)	(51,149)
Saudi Airlines Cargo Company	Revenue	194,594	216,884
	Cost charge	(16,255)	(17,207)
	Shared service recovery	1,099	1,194
Saudia Aerospace Engineering Industries Company	Revenue	77,167	64,936
Saudi Ground Services Company	Revenue	475	-
	Cost charge	(21,162)	(23,352)
Saudi Airlines Air Transport Company	Revenue	19,872	30,063
	Cost charge	(398)	(576)
Saudi Private Aviation	Revenue	7,644	2,775
	Cost charge	(101)	(139)
Saudia Royal Fleet	Revenue	7,147	2,469
Flyadeal Company	Revenue	4,998	5,642
Catrion Catering Holding Company	Cost charge	(385)	(34)
Prince Sultan Aviation Academy	Cost charge	(267)	-
Saudi Arabian Airlines Corporation	Cost charge	-	(104)



• Significant related party balances with major shareholder, their subsidiaries, entities with significant influence, government entities and other related parties at the period end are described as under:

Nature of the balances	Balances as at 31 December
	2025 X ‘000	2024 X ‘000
Amounts due from related parties:
Trade receivables	275,942	412,993
Sublease	10,494	10,494
Prepayments and other receivables	37,577	37,703
Amounts due from related parties:
Trade payables	34,721	48,712
Accrued expenses and other liabilities	10,952	6,796
Lease liabilities	577,503	656,539
Long-term loans	131,850	151,649




Name of related parties	Nature of the balances	Balances as at 31 December
		2025 X ‘000	2024 X ‘000
Amounts due from related parties:
Government-related entities	Trade receivables	109,930	279,256
	Sublease	10,494	10,494
Saudia Aerospace Engineering Industries Company	Trade receivables	139,552	95,500
Saudi Airlines Cargo Company	Trade receivables	18,915	23,881
	Prepayments and other receivables	2,778	1,555
Flyadeal Company	Trade receivables	4,264	829
Saudi Private Aviation	Trade receivables	2,062	1,266
Saudia Royal Fleet	Trade receivables	662	2,222
Saudi Ground Services Company	Trade receivables	542	-
Saudi Arabian Airlines Corporation	Trade receivables	15	-
	Prepayments and other receivables	34,799	36,148
Saudi Airlines Air Transport Company	Trade receivables	-	10,039


At 31 December 2025, provision for trade receivables from related parties are carried with the expected credit loss allowance of 17.85 million (31 December 2024: 20.96 million).

Name of related parties	Nature of the balances	Balances as at 31 December
		2025 X ‘000	2024 X ‘000
Amounts due to related parties:
Government-related entities	Trade payables	29,281	41,981
	Accrued expenses and other liabilities	3,461	1,339
	Lease liabilities	577,503	656,539
	Long-term loans	131,850	151,649
Saudi Ground Services Company	Trade payables	4,057	5,134
	Accrued expenses and other liabilities	4,465	3,515
Saudi Airlines Cargo Company	Trade payables	406	127
	Accrued expenses and other liabilities	2,983	602
Saudi Arabian Airlines Corporation	Trade payables	763	763
	Accrued expenses and other liabilities	-	80
Prince Sultan Aviation Academy	Trade payables	145	384
	Accrued expenses and other liabilities	-	652
Saudi Private Aviation	Trade payables	43	323
	Accrued expenses and other liabilities	43	154
Catrion Catering Holding Company	Trade payables	26	-
	Accrued expenses and other liabilities	-	19
Saudi Airlines Air Transport Company	Accrued expenses and other liabilities	-	435



• Key management compensation
• Compensation to Group’s key management personnel includes salaries, non-cash benefits, and contributions to post-employment defined benefit plan. The following table illustrates details of remuneration and compensation incurred for the Board of Directors, Audit and Executive committees and Key Management Personnel:

	31 December 2025 X ‘000	31 December 2024 X ‘000
Short-term employee benefits	26,549	29,216
Post retirement benefits	2,073	1,318
	28,622	30,534

• Board of Directors, Audit committee and Executive committee compensation charged during the year ended 31 December 2025 amounted to 5.3 million (31 December 2024: 5.6 million).

21.1   Revenue streams

Revenue for the year comprise of the following streams:

Disaggregation of revenue from contracts with customers

(i) Primary geographical markets

The revenue from contracts with customers is derived from the primary geographical market that is the Kingdom of Saudi Arabia.

(ii) Major service lines

Cost of revenue comprise of the following:

Other income comprise of the following:

Selling and marketing expenses comprise of the following:

General and administration expenses comprise of the following:

Finance income comprise of the following:

Finance cost comprise of the following:

The movement in the Zakat provision of the Group for the year is as follows:

Status of assessments of the Company

The Group has filed its annual Zakat declarations up to year ended 31 December 2024. The Group has obtained Zakat certificate valid until 30 April 2026.

 Zakat, Tax and Custom Authority (ZATCA) has reviewed the declarations filed and issued assessment dated 17 September 2024 for the year 2020 and 2021 determining additional Zakat liability of 8.44 million and 19.82 million respectively. The Group submitted its objection to ZATCA against this assessment for these years 2020 and 2021, and settled the non-objected amounts of 0.28 million, and 4.07 million respectively, the objections were later rejected by ZATCA, and the Group raised its objections to General Secretariate of Zakat, Tax and Customs Committees (“GSTC”) still under review by the Appellate Committee. Additionally, the declaration for the year 2022 is currently under review by ZATCA.

ZATCA issued its assessment for the year ended 31 December 2023 claiming additional Zakat of 0.79 million and the Group settled the amount due and finalize the Zakat status with ZATCA for the said year.

Status of assessments of the Subsidiary

As this is the first financial period of the Subsidiary, the Zakat return will be filed for an extended period from 9 October 2025 to 31 December 2026.

At 31 December 2025, the Group has outstanding commitments for capital expenditures amounting to 806.4 million (2024: 91.05 million). The commitments primarily pertain to construction of cargo terminals.

At 31 December 2025, the Group’s bankers have issued letters of guarantee amounting to 50.55 million (2024: 29.63 million).

As at 31 December 2025 and 31 December 2024, the Group have no outstanding contingency.

The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value and cash flow interest rate risks and price risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial performance.

Risk management framework

Risk management is carried out by senior management under policies approved by the Board of Directors. Senior management identifies and evaluates financial risks in close cooperation with the Group’s operating units. The most important types of risk are market risk, credit risk and liquidity risk. The Board of Directors has overall responsibility for establishment and oversight of the Group’s risk management framework. The executive management team is responsible for developing and monitoring the Group’s risk management policies. The team regularly meets, and any changes and compliance issues are reported to the Board of Directors through the audit committee. Risk management systems are reviewed regularly by the executive management team to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The audit committee oversees compliance by management with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group, audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad-hoc reviews of risk management controls and procedures, the results of which are reported to the management.

The Group’s principal financial assets include trade receivables, sublease, long-term loan receivable, other receivables and cash and cash equivalents that derive directly from its operations. The Group’s principal financial liabilities comprise trade and other payables, long-term loans, and lease liabilities. The main purpose of these financial liabilities is to finance the Group’s operations.

Financial asset and financial liability are offset and net amount reported in the consolidated financial statements, when the Group has a legally enforceable right to set off the recognised amounts and intend either to settle on a net basis, or to realize the financial asset and financial liability simultaneously.

The Group is exposed to market risk, credit risk and liquidity risk. The Group management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: (i) interest rate risk, (ii) currency risk and (iii) other price risk, such as equity price risk and commodity risk.

Interest rate risk

Interest rate risks are the exposures to various risks associated with the effect of fluctuations in the prevailing interest rates on the Group’s financial positions and cash flows. The Group’s interest rate risks arise mainly from long-term loan which is at floating rate of interest and is subject to re- pricing on a regular basis and for which the management closely monitors the changes in interest rates.

The interest rate profile of the Group’s interest-bearing financial instruments as reported to the management of the Group is as follows:

Sensitivity analysis for variable rate instruments

Change in 100 basis points in interest rates, with all other variables held constant, would have increased or decreased the equity and profit before Zakat for the year by 4.3 million (2024: 4.6 million).

Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group's transactions are principally in Saudi Riyals, United States Dollars and Euros. The management believes that there is no currency risk arising from the transactions in currencies to which the Saudi Riyals is pegged with United States Dollars. The Group’s exposure to currency risk arising from currencies to which the Saudi Riyals is not pegged is not material to these consolidated financial statements.

The cash and cash equivalents, short-term Murabaha deposits, trade receivables, sublease, long-term loan receivable, long-term loans and trade and other payables of the Group are denominated in Saudi Riyals.

Price risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from special commission rate risk or currency risk) whether those changes are caused by factors specific to the individual financial instruments or it's issuer, or factors affecting all similar financial instruments traded in the market. The Group is not exposed to other price risk such as equity risk and commodity risk as the Group is neither involved in investment in trading securities nor the commodities.

Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The management also continuously monitors the credit exposure towards the customers and makes provision against those balances considered doubtful of recovery which is based on customer profile and payments history. Outstanding customer receivables are regularly monitored.

The Group’s maximum exposure to credit risk at the reporting date is as follows:

Trade receivables

Trade receivables are carried at net of provision for expected credit losses. The expected credit loss allowance at 31 December 2025 is  31.39 million (2024: 31.96 million).

At 31 December, the exposure to credit risk of trade receivables by type of counterparty was as follows:

Customer credit risk is managed by management subject to the Group’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment.

The Group does not obtain collaterals over receivables, and all of receivables are, therefore, unsecured. However, unimpaired receivables are expected to be recoverable based on past experience.

The Group renders its services to a large number of customers. The five largest customers (including related parties) account 71% of outstanding trade receivables as at 31 December 2025 (2024: 77%). As at 31 December 2025 trade receivables from related parties and Government entities comprise of 66% of total outstanding trade receivables (31 December 2024: 83%).

An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns (i.e., by geographical region, service type, customer type and rating, and coverage by letters of credit or other forms of credit insurance). The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions.

Generally, trade receivables from private entities are written-off if once determined that the amount is uncollectable. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in the statement of financial position. The Group does not hold collateral as security.

Loss rates are calculated using flow rate method based on the probability of a receivable progressing through successive stages of delinquency. Flow rates are calculated separately for exposures in different class of customers based on the common credit risk characteristics.

The following table provides information about the exposure to credit risk for trade receivables at the reporting date:

Loss rates are based on historical credit loss experience and are adjusted to reflect differences between economic conditions during the period over which the historical data has been collected, current conditions and the Group’s view of economic conditions over the expected lives of the receivables.

Other receivables

Other receivables credit risk is managed by management. The Group’s exposure to credit risk arises from the default of the counterparty, with a maximum exposure equal to the carrying amount as disclosed in the statement of financial position.

Short-term Murabaha deposits and cash and cash equivalents

Credit risk from balances with banks and financial institutions is managed by the Group’s treasury department in accordance with the Group’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The Group place funds with banks and recognised financial institutions that have high credit ratings ranging from A- to BBB+ assigned by the international credit rating agencies.

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in raising funds to meet commitments associated with financial liabilities when they fall due. Liquidity requirements are monitored on a monthly basis and management ensures that sufficient funds are available to meet any commitments as they arise and through management of the Group’s operations and credit facility agreements to meet any future liabilities.

The primary objective of the Group’s capital management is to maximize the shareholders’ value. The Group manages its capital structure by monitoring return on net assets and makes adjustments to it in the light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, issue new shares and other measures commensuration to the circumstances. The Group monitors its capital structure using a gearing ratio, which is calculated as total liabilities divided by total equity. Total liabilities comprise both current and non-current liabilities, as presented in the statement of financial position.

The Group’s debt to adjusted capital ratio is as follows:

Basic earnings per share (EPS) is calculated by dividing profit for the year attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares in issue outstanding during the year.

The diluted EPS is same as the basic EPS as the Group does not have any dilutive instruments in issue.

Reclassification in Consolidated Statement of Cash Flows

During the year, the Group revised the presentation of the Consolidated Statement of Cash Flows. Certain comparative figures have been reclassified to conform with the current year’s presentation.

The effect of such reclassifications are summarised as follows:

• X 3,500 thousand related to capitalisation of depreciation of right-of-use assets was reclassified from operating activities to additions to property and equipment under investing activities.
• X 930 thousand related to capitalisation of interest on lease liabilities was reclassified from operating activities to payments of finance cost on lease liabilities under financing activities.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability; or
• In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
• Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

If the inputs used to measure the fair value of an asset or liability falls into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest input level that is significant to the entire measurement.

The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. As at 31 December 2025 and 31 December 2024, the fair values of the Group’s financial instruments are estimated to approximate their carrying values. No significant inputs were applied in the valuation of accounts receivables as at 31 December 2025 and 31 December 2024.

The reportable segments have been identified as follows and derive their revenues and incur costs from the following operations:

Ground handling: Cargo handling services to air cargo carriers operating at the Kingdom’s airports and consignees for warehouse handling and storage thereof.

Logistics: End to end logistic solutions services, customs clearance, inventory management and provision of warehouse management solutions.

SAL Zones: Streamlined logistics operations through high-quality warehousing and flexible bonded and non-bonded areas, all supported by an efficient business center that enhances daily warehouse and logistics activities—creating a cohesive and convenient one-stop logistics hub.

The executive committee assesses the performance of the operating segments based on profit before Zakat.

B. Reconciliations of information on reportable segments to IFRS measures

All assets, liabilities and total profits relate to reportable segment and there are no intersegment assets, liabilities and profits.

C. Geographical information

The revenue from contracts with customers is derived from the primary geographical market that is the Kingdom of Saudi Arabia.

D. Major customer

Revenue from one customer of the Group represented approximately 11% (2024: 13%) of the Group’s total revenue for the year ended 31 December 2025.

(a) On 10 February 2026, the Board of Directors approved a dividend payment of X151.2 million (X1.89 per share) for the year ended 31 December 2025. The dividends are attributable to the shareholders of the Group who own shares with the effective date of 10 February 2026 as registered in the registry of the Group’s shareholders in the Securities Depository Center (Edaa).

(b) On 28 January 2026 the Company issued a  X denominated unsecured Sukuk Program amounting to X 1 billion with profit rate of six-month SAIBOR plus an agreed markup rate. Sukuk Program will mature by January 2031.

There have been no other significant events since the year ended 31 December 2025, that would require disclosures or adjustments in these consolidated financial statements.

These consolidated financial statements were approved by Board of Directors of the Group on 10 February 2026, corresponding to 22 Sha'aban 1447H.