Elm Company announces its interim consolidated financial results for the period ended 30-06-2025 (Six Months)

Increase in revenue by 27.05% (SAR 478 million), which lead to an increase in gross profit by 29.97% (SAR 220 million).

Increase in operating expenses by 63.33% (SAR 171 million), as a result of increase in the general and administration expenses by SAR 102 million, increase in the expected credit losses by SAR 43 million, increase in depreciation and amortization expenses by SAR 15 million, increase in selling and marketing expenses by SAR 10 million, increase in research and development expenses by SAR 2 million, on other hand, there was a decrease in impairment of non-current assets by SAR 1 million.

Regarding other items impacting the net profit, finance expenses increased by SAR 21 million, a decrease in the fair value gain through profit or loss amounting to SAR 14 million, and an increase in the share of loss from associates by SAR 1 million, and a decrease in income from Murabaha deposits by SAR 1 million.

This was offset by a decrease in Zakat expense by SAR 91 million as a result of the prior years provision reversal amounting to SAR 69 million, after the zakat assessment completion with Zakat, Tax, and Customs Authority ("ZATCA") for the company’s zakat returns.

offset by a decrease in Professional Services revenue by 10.87%.

Gross profit increased by 23.42% (SAR 181 million), and operating profit increased by 8.92% (SAR 42 million).

Additionally, operating expenses increased by 46.03% (SAR 139 million), mainly due to an increase in general and administrative expenses by SAR 87 million, an increase in expected credit loss expenses by SAR 33 million, and an increase in depreciation and amortization expenses by SAR 24 million. This was offset by a decrease in impairment of non-current assets by SAR 2 million, and a decrease in selling and marketing expenses by SAR 3 million.

Also, regarding other items impacting the net profit, finance expenses increased by SAR 22 million, Income from Murabaha deposit decreased by SAR 15 million, and fair value gains from revaluation of investments through profit or loss decreased by SAR 2 million, offset by increase in other income by SAR 7 million.

Furthermore, this was offset by a decrease in Zakat expense by SAR 85 million as a result of the prior years provision reversal amounting to SAR 69 million, after the zakat assessment completion with Zakat, Tax, and Customs Authority ("ZATCA") for the company’s zakat returns.

Increase in revenue by 21.02% (SAR 716 million), which lead to an increase in gross profit by 27.27% (SAR 370 million).

Operating expenses increased by 32.74% (SAR 183 million), mainly due to an increase in general and administrative expenses by SAR 128 million, an increase in expected credit loss expenses by SAR 23 million, an increase in depreciation and amortization expenses by SAR 13 million, an increase in selling and marketing expenses by SAR 9 million, an increase in research and development expenses by SAR 9 million, and an increase in impairment of non-current assets by SAR 1 million.

Regarding other items impacting the net profit, finance expenses increased by SAR 23 million, the share of loss from associates increased by SAR 2 million and a decrease in fair value gains from revaluation of investments through profit or loss by SAR 8 million. This was offset by an increase in other income by SAR 9 million.

Furthermore, this was offset by a decrease in Zakat expense by SAR 92 million as a result of the prior years provision reversal amounting to 69 million, after the zakat assessment completion with Zakat, Tax, and Customs Authority ("ZATCA") for the company’s zakat returns.

During the period, the acquisition of Thiqah Business Services Company was completed and starting from 1 May 2025, Thiqah financial statements has been consolidated in the interim condensed consolidated financial statements for Elm for period ended June 30, 2025.

In addition, and given that the Acquisition is classified as a transaction between parties under common control, the accounting treatment of the Acquisition will be based on the value of the net asset acquired at its book value as of the Acquisition date and the difference between the consideration paid and the book value will be treated in the retained earnings balance. This is based on the International Financial Reporting Standards that are endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements issued by the Saudi Organization for Chartered and Professional Accountants (SOCPA).

This resulted in a decrease of SAR 2,810 million in retained earnings, representing the difference between the consideration paid and the book value of Thiqah's net assets. It should be noted that this procedure is of an accounting nature and does not have any impact on Elm Company’s business plans. For more details, please refer to Note 31 in the notes attached to the interim condensed consolidated financial statements.

The Company will host an Earnings Conference Call with investors and analysts to discuss the H1 2025 Results. The call is scheduled to be on Monday 04 August 2025 at 4:00 PM (KSA time).

Shareholders who are registered in Tadawulaty will be notified via text message explaining the process to participate in the call.

We are pleased to receive your inquiries by contacting Investor Relations Department through the following channels:

Tel: (+966) 112503962

Email: ir@elm.sa