BAAN Holding Group Co. announces its Annual Financial results for the period ending on 2025-12-31

This decline is mainly attributable to the mixed performance across the Group’s segments. Revenue from the Hospitality segment decreased by SAR 25.26 million, driven by lower revenues in certain regions, particularly the Eastern Province and Tabuk, due to lower occupancy rates and a decline in the average room rate, amid an increase in hotel supply and intensified competition. On the other hand, the segment recorded a noticeable improvement in the Western Region (Jeddah and Yanbu) as well as in Hail, supported by higher occupancy and improved average rates. Revenues were also affected by the temporary closure of one of the Group’s hotels in Riyadh for refurbishment and redevelopment to keep pace with market developments and enhance the hotel’s readiness for future operations.

The Entertainment segment also recorded a decrease in revenues of SAR 45.68 million due to a decline in visitor numbers and lower average customer spending at a number of entertainment centers, as a result of intensified competition and a wider range of entertainment options—especially during seasons and holidays—along with changes in consumer behavior, which affected demand patterns and spending levels.

In contrast, revenues from other activities increased by SAR 41.28 million, led by the Catering segment, due to higher catering volumes, supported by increased occupancy rates at sites associated with the Group’s activities.

This is mainly due to the recognition of impairment provisions for certain assets, as well as losses resulting from the disposal of assets related to the closure of underperforming branches. These actions were taken as part of restructuring the business portfolio and improving asset efficiency. Additionally, expected credit loss provisions were recorded for trade receivables in accordance with International Financial Reporting Standards (IFRS).

In contrast, the results for the comparable period included non-recurring income recognized in the previous year, related to insurance compensation amounting to SAR 24.8 million, as well as the reversal of provisions totaling SAR 12.70 million following the collection of related receivables.

Operating costs also increased due to the expansion of the catering segment this year, along with higher marketing expenses and general administrative costs.

Furthermore, revenues from the hospitality and entertainment segments declined due to changes in market dynamics, including increased competition and evolving consumer behavior. This negatively impacted on occupancy rates and average spending, and consequently, profitability.

In addition, the results were affected by operating costs and pre-operating expenses associated with catering projects as part of the company’s expansion strategy in this segment, which temporarily impacted profitability

Operating loss amounted to SAR 129.05 million compared to operating profit of SAR 61.99 million for the corresponding period of the previous year.

Total comprehensive loss for the period amounted to SAR 202.01 million compared to comprehensive income of SAR 3.10 million for the corresponding period of the previous year.

Accumulated losses

Accumulated losses amounted to SAR 312.73 million as at the end of the current period, representing 99.28% of the Group’s capital of SAR 315 million.

The main reason for the increase in accumulated losses was the impact on performance in the hospitality and entertainment

segments due to changes in consumer behavior and intensified competition, in addition to decreased revenues in certain sites and branches with weak operating performance.

Results were also impacted by the recognition of impairment provisions on certain assets, in addition to book losses resulting from the exit from a number of branches and sites that are not economically viable.

This comes within the framework of the Group’s execution of its transformation strategy, which includes restructuring the business portfolio, exiting non-viable activities, reassessing assets, and expanding into future high-quality hotel and entertainment projects, with the aim of improving operating efficiency and enhancing financial sustainability over the medium and long term.

Actions taken to address accumulated losses

• Continue implementing the strategic transformation program and plan.

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

• Expand into new and high-quality entertainment and hotel projects with economically viable returns after exiting non-economically viable projects and branches.

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

• Work to complete the procedures related to the two agreements signed on 29 December 2024, which include the acquisition of real estate assets through a capital increase of SAR 304.96 million, after obtaining the required regulatory approvals.

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

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