Najran Cement Company announces the annual financial results for the period ending on 2025-12-31

We have audited the consolidated financial statements of Najran Cement Company - A Saudi Joint Stock Company (the “Company”) and its subsidiary (together “the Group’’), which comprise the consolidated statement of financial position as at 31 December 2025, and the consolidated statement of profit or loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2025, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting 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”).

Basis for Qualified Opinion

As disclosed in Note (10-3) to the consolidated financial statements regarding property, plant and equipment, the Group’s management has performed an impairment assessment with the assistance of an external consultant to verify that no impairment in the value of property, plant and equipment in accordance with the requirements of International Financial Reporting Standard (IAS 36) “Impairment of Assets.” This assessment was based on projected future cash flows and other key assumptions, due to the presence of potential indications of impairment in property, plant and equipment with their carrying amount to SAR 1,944 million as of 31 December 2025. These indications include, among others, a decline in the Group’s net profit for the year ended 31 December 2025 compared with the profits reported to prior years, and the underutilization of full production capacity of the main production lines, in addition to other factors and considerations, and the assessment concluded that no impairment exists. We were unable to obtain sufficient and appropriate audit evidence to assess the reasonableness of the key assumptions and forecasts used by management and its external consultants in performing this assessment. Accordingly, we were unable to determine whether any adjustments might be necessary to the consolidated financial statements as of and for the year ended 31 December 2025.

We conducted our audit in accordance with International Standards on Auditing as endorsed in the Kingdom of Saudi Arabia. Our responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements” section of our report. We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards), as endorsed in the Kingdom of Saudi Arabia, that are relevant to our audit of the consolidated financial statements, and we have fulfilled our other ethical responsibilities in accordance with that Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Note (10.3): As at 31 December 2025, assessed indicators of impairment of its property, plant and equipment in accordance with the requirements of International Accounting Standard (IAS) 36 “Impairment of Assets.” An impairment assessment was performed with the support of an independent certified valuer using a value-in-use model, which is based on estimated future cash flows and a number of key assumptions relating to expected operational performance and future economic conditions.

The results of this assessment concluded that no impairment exists in the value of these assets as at the reporting date. Management believes that the assumptions used in this assessment reasonably reflect the best available estimates under current and expected conditions.

The Company also affirms to its shareholders its continued commitment to applying best accounting policies and practices through the adoption of internal policies and procedures developed by specialized, accredited consulting firms and subject to periodic review and update. The Company further relies on independent certified experts and valuers for key technical estimates and significant valuations, enhancing the reliability and accuracy of its financial results.