SPIMACO CFO says private sector, expansions to drive Q3 growth

Abdulaziz Al-Oud, CFO of Saudi Pharmaceutical Industries and Medical Appliances Corp. (SPIMACO)

Abdulaziz Al-Oud, CFO of Saudi Pharmaceutical Industries and Medical Appliances Corp. (SPIMACO), expects the company to maintain its strong performance in Q3 2025, mainly supported by the growth in private sector sales, which is the primary driver of profitability.

This comes alongside a noticeable improvement in local demand for pharmaceuticals, fueled by economic stability and increased spending in the healthcare sector, Al-Oud told Argaam.

He added that SPIMACO's recent expansions could contribute to increasing production capacity and gradually improving margins.

The third quarter is likely to significantly enhance the company’s financial results, especially amid improved operational efficiency and cost optimization.

Both the public and private sectors contributed to revenue growth and a significant rise in profits, with the public sector witnessing a notable increase in sales compared to the same period last year.

The private sector maintained its pivotal role as the largest source of revenue with higher profit margins, in addition to increased revenues from contract manufacturing, Al-Oud said.

He added that operational efficiency also improved, with lower selling and administrative expenses, which supported operating profit and led to a 98% increase in net profit during the first half of the year.

The CFO pointed out that SPIMACO’s revenues rose by 7.3% during Q2 2025 compared to the same quarter of 2024, driven by strong growth in public sector sales, improved private sector demand, and a greater focus on high-margin products.

He highlighted that contract-manufacturing revenues also supported growth, along with improved distribution and stabilized supply chains, which enhanced the company’s ability to meet market needs more efficiently.

Private sector sales accounted for 66% of total revenue, while public sector sales represented around 24%. This reflects continued strong demand in the local market and the effectiveness of marketing and distribution strategies in both sectors, with a notable increase in the public sector’s share compared to last year.

The private sector contributed approximately 65.1% of pharmaceutical segment revenues, making it the primary driver of profitability due to higher profit margins. It was followed by the public sector at 22.2%, which supported earnings through expanded tenders and increased quantities supplied.

The contract-manufacturing activity contributed 4% to revenues. Although still limited in size, its role in enhancing profitability continues to develop steadily, Al-Oud noted.