Tihama Advertising, Public Relations and Marketing Company announces its Interim Financial results for the Period Ending on 31-12-2025 (Nine Months)

Net results for the current quarter were also impacted by the recognition of losses arising from Zakat settlements, compared to gains from Zakat settlements recorded during the comparable quarter of the previous year.

01- Unrealized losses from financial assets at fair value through profit or loss (investment portfolio)

02-Zakat settlements relating to prior years.

03- A decrease in gross profit due to lower sales of educational books, as the previous quarter coincided with the back-to-school season.

04-Higher losses from discontinued operations.

01-Decrease in revenues from the Production segment due to the absence of major project acquisitions during the current period compared to the corresponding period of the previous year.

02-Decrease in from the Outdoor Advertising segment following the divestment of this business.

03-Decrease in from the Distribution segment due to a decline in educational book sales.

These decreases were partially offset by revenues from the Events and Entertainment segment, which was not part of the Company’s activities during the corresponding period of the previous year

01- Unrealized losses from financial assets at fair value through profit or loss, compared to gains recorded in the corresponding period of the previous year.

02-A decrease in the share of results from associates compared to the corresponding period of the previous year.

03-Lower other income, mainly due to the absence of bank deposits during the current period compared to the corresponding period of the previous year.

04-Recognition of losses arising from Zakat settlements, compared to gains from Zakat settlements recorded during the corresponding period of the previous year.

05-Higher losses from discontinued operations.

A. The investments in associates included an amount of SR 52,232,168, representing investment in J. Walter Thompson MENA. The Group accounts for its investments in associates using the equity method. The interim condensed consolidated statement of profit or loss of the Group for the three and nine-month period ended 31 December 2025 included share of results of the associate amounting to SR 2,537,830 and SR 7,018,350 respectively. The interim condensed consolidated statement of other comprehensive income for the three and nine-month period ended 31 December 2025 included share of other comprehensive income of the associate amounting to SR 16,233 and SR 136,752 respectively. Further, note (25) includes a restatement of comparative figures related to the investment in J. Walter Thompson MENA for the year ended 31 March 2025. The Group recorded these amounts based on neither reviewed management accounts of the associate for the three- and nine-months Period ended 31 December 2025 nor audited financial statements of the associate for the year ended 31 March 2025.

B. The shareholder agreement related to the Group’s associate United Advertising Company included call and put options over the Group’s shareholding. The Group has not accounted for such options as required by International Financial Reporting Standards as at 31 December 2025.

C. The Group has other investments in associates with nil carrying amount, for which no audited or reviewed financial statements were made available. Due to lack of sufficient evidence, we were unable to determine the value of investments, or whether there were any additional liabilities related to such investment in associates.

Accordingly, we were unable to determine whether any material adjustments need to be recorded in the interim condensed consolidated statement of financial position as at 31 December 2025, or to the interim condensed consolidated statements of profit or loss and other comprehensive income for the three and nine month period then ended or to the interim condensed consolidated statement of cash flows for the nine-month period then ended.

2. As disclosed in Note (9), trade receivable and other debit balances included a balance amount of SR 15,000,000 as at 31 December 2025, which represents cash paid to the Saudi Film Fund as an investment. Management has classified this balance as other debit balances without assessing a proper classification of this amount and without applying relevant measurement principles as at reporting dates. Accordingly, we were unable to determine whether any adjustments need to be recorded in the interim condensed consolidated statement of financial position as at 31 December 2025, or to the interim condensed consolidated statements of profit or loss and other comprehensive income for the three and nine month period then ended or to the interim condensed consolidated statement of cash flows for the nine-month period then ended.

Qualified conclusion

Except for the matters and the possible adjustments to the interim condensed consolidated financial statements that we might have become aware of had it not been for the matters described above, based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 that is endorsed in the Kingdom of Saudi Arabia.

Material uncertainty related to going concern

We draw attention to note (2/4) to the interim condensed consolidated financial statements, which indicates that the accumulated losses amounted to SR 65,704,612 as at 31 December 2025, The Group incurred total losses for the three-month and nine-month periods then ended of SR 43,279,626 and SR 65,434,898, respectively. Furthermore, its negative cash flows from operating activities amounted to SR 5,517,868 for the nine-month period ended 31 December 2025. These events and conditions, along with other matters set out in note (2/4), indicate the existence of a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern. Our conclusion is not modified in respect of this matter.

Other matter

The consolidated financial statements for the year ended 31 March 2025, were audited by another auditor who issued a modified opinion on those financial statements on 13 Muharram 1447 AH (corresponding to 8 July 2025). The interim condensed consolidated financial statements for the three and nine-month periods ended 31 December 2024, were reviewed by another auditor who expressed a modified conclusion dated 9 Ramdan 1446 AH (corresponding to 9 March 2025).

a) Restatement investment in associate - JWT: During the previous year, a total adjustment of SR 4,081,556 was made in relation to the Group’s investment in the associate company JWT (J. Walter Thompson), the adjustment included a reallocation of SR 3,920,827 between the Foreign Currency Translation Reserve and Retained Earnings, and a correction of SR 160,729 related to the associate’s retained earnings, the adjustment resulted from foreign exchange fluctuations, mainly in the Egyptian pound, with no impact on the Group’s total equity or net income.

b) Restatement investment in associate United Advertising Company: The investment in United Advertising Company was adjusted by SR194,354, resulting from the issuance of the associate’s final financial statements, to reflect its share of the associate’s profit for the comparative period.

c) Reclassification – Portfolio management fees: During the period, the Company reclassified portfolio management fees amounting to SR210,614 from accounts payable to a reduction in the carrying value of the investment portfolio for the same amount, this reclassification was made to present the balance in a manner that more appropriately reflects the substance of the transaction, there was no impact on net income or total shareholders’ equity as a result of this reclassification

d) Reclassified the provision for inventory from General and Administrative Expenses to Cost of Sales to more appropriately reflect the nature of the expense, Comparative figures for the prior period have been restated to reflect this reclassification,

e) Reclassification of Tihama Education Company’s profits and losses as discontinued operations:

On 18 November 2025, the Group’s Board of Directors resolved to initiate the procedures for the liquidation of Tihama Education Company under the Bankruptcy Law, with the aim of limiting the Company’s recurring annual losses that have negatively impacted the Group’s performance.

Accordingly, the results of Tihama Education Company have been reclassified in the condensed consolidated interim statement of profit or loss under discontinued operations for the comparative period, in compliance with the requirements of IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations.”

The company announces that the group's accumulated losses amounted to 65,704,612 Saudi riyals as of 31 December 2025 , representing 28.66% of the company's capital)

The reason for the increase / decrease in losses to this percentage is due to what was mentioned above regarding the reason for incurring losses during the current period in this announcement above

The company clarifies to the shareholders that the company is currently working on procedures to reduce losses and convert them into profits, especially since the company has sufficient liquidity to enable it to meet its obligations when due, in addition to plans to liquidate a number of subsidiaries and new investments and expand its business to generate cash flows to continue its operations.

The company indicates that the procedures and instructions for companies whose shares are listed on the market and whose accumulated losses amount to 20% or more of their capital will be applied.