BAAN Holding Group Co. announces its Interim Financial results for the Period Ending on 2026-03-31 ( Three Months )

This is mainly attributable to variations in the performance of the Group’s segments and the impact of seasonality on certain segments. Hotel segment revenues declined by SAR 10.72 million. Although hotel performance improved in terms of occupancy rates and average room rate during January, seasonality, the earlier timing of Ramadan and Eid Al-Fitr in the current quarter compared to last year, as well as geopolitical events in the region and the resulting cancellation of some hotel bookings in Riyadh and the Eastern Province, contributed to lower revenue levels during March. Occupancy rates in the Western Region were not affected and increased compared to the corresponding quarter of last year. Revenues were also affected by the temporary closure of one of the Group’s hotels in Riyadh for renovation and development works to align with market developments and improve the hotel’s readiness for future operations.

The entertainment segment also recorded a decline in revenues of SAR 10.69 million, mainly due to the impact on revenues at entertainment centers in the UAE as a result of geopolitical events during March and the Eid Al-Fitr holiday, as well as seasonality, the change in the timing of the mid-year holiday, and the overlap of Founding Day holiday with Ramadan.

In contrast, other activities’ revenues increased by SAR 14.05 million, led by the catering segment, due to higher catering and food services volumes, supported by increased occupancy rates at sites linked to the Group’s activities.

cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter

Total shareholders’ equity amounted to SAR 50.60 million as at the end of the current quarter compared to SAR 191.56 million at the end of the corresponding quarter of last year, a decrease of 71%.

Accumulated losses: Accumulated losses amounted to SAR 263.64 million as at the end of the current quarter, representing 83.70% of the Group’s subscribed capital of SAR 315 million.

Main reasons that led to reaching these losses

While noting the Group’s initiatives to increase revenues, reduce operating costs, improve profit margins, and close underperforming locations, several factors contributed to the accumulation of losses, most notably:

Operating losses for a number of branches and joint ventures in previous periods, in addition to book losses from exiting certain branches and loss-making, underperforming joint ventures. This comes within the framework of implementing the Group’s transformation strategy, which includes restructuring the business portfolio, exiting unviable activities, revaluating assets, and expanding into distinctive hotel and entertainment projects in the future, aiming to improve operational efficiency and enhance financial sustainability over the medium and long term.

As well as impairment losses on assets during the past year, in addition to decreased revenues in some operating segments during previous years.

Actions taken to address accumulated losses

• Continue implementing the financial restructuring program and plan.

• Continue restructuring the Group’s segments to enhance operational and administrative efficiency.

• Expand into new and distinctive entertainment and hotel projects with viable economic returns after exiting projects and branches that are not economically viable.

• Focus on promising segments, led by the catering segment, to support growth and improve financial performance.

• The Extraordinary General Assembly, in its session dated 23/04/2026, approved increasing the capital by SAR 304.96 million to become SAR 619.96 million instead of SAR 315 million, through the acquisition of real estate assets, after completing the required regulatory procedures.

The Group confirms its commitment to implementing its transformation strategy and continuing to improve operational efficiency and maximize returns from assets, thereby enhancing its ability to achieve sustainable financial performance and create added value for shareholders in the long term.

The procedures and instructions applicable to companies listed on the Saudi Stock Exchange whose accumulated losses reach 20% or more of their capital will be applied.