Maharah expects continued momentum in H2, market share at 14%: CEO

Abdulaziz Al-Kathiri, CEO of Maharah Human Resources Co.

Maharah Human Resources Co. expects momentum to continue during the second half of 2025, backed by new contracts worth more than SAR 500 million, whose impact will gradually reflect on its financial results during H2 2025, 2026 and 2027, CEO Abdulaziz Al-Kathiri told Argaam in an interview.

The company continues to work to improve margins and achieve higher efficiency, especially with its investments in technology development and training, he added.

Al-Kathiri also pointed out that, despite the market witnessing the entry of new players and the presence of competitors offering services at lower prices, Maharah continues to maintain its market share of over 13%.

Below are excerpts from the interview:

*How do you evaluate Maharah's performance in H1 2025?

-Maharah delivered positive operational and financial performance in H1 2025, with revenues increasing by 40% year-on-year, reaching SAR 1.46 billion. This growth is largely attributed to Maharah's implementation of its 2024-2030 growth strategy. The company is working on 11 initiatives that have contributed to improving performance in its business and retail services segments, which witnessed growth of 51% and 12%, respectively. We also witnessed improved operational efficiency and a 38% YoY increase in workforce numbers, enabling us to meet the growing demand from our clients in vital sectors.

Maharah is today one of the largest licensed human resources companies, with a 13-14% share among human resources companies and a workforce of approximately 55,000 workers. During the first half of the year, Maharah signed contracts exceeding SAR 500 million for about 6,200 workers, the impact of which will be reflected in the years 2025, 2026, and 2027.

*Why did net profit decline despite revenue growth?

-Maharah posted SAR 52 million net profit for H1 2025, a 49% decline YoY. This decrease is due to several factors, most notably, the non-recording of the results of Health Systems Co., an affiliated company, due to the non-receipt of the financial statements for the first and second quarters. The financial statements are pending completion, and the results will be recorded later after receipt. Net profit was also partially affected by the decline in profits from Kingdom Hospital, in which Maharah holds a 41% stake through Care Shield Holding Co., which was reflected in the results of investments in affiliated companies. A loss was also recorded from the disposal of Nabd Co. operations as part of discontinued operations.

Profit margins in the business segment were also affected as a result of our strategy to retain strategic customers and provide competitive long-term solutions, as a number of contracts with strategic customers were renewed at lower prices. Increased competition in the retail segment also led to price pressures.

NPLs provisions increased according to the credit loss model due to increased revenues and higher general expenses resulting from human capital investment programs (long-term incentives and training programs).

Meanwhile, operating profit rose by 11% YoY in H1 2025, supported by improved performance in key segments, the sale of underutilized assets, and government support for localization programs.

*What about the performance of our subsidiaries?

-We continue to restructure our subsidiaries to maximize value and minimize negative financial impact. A decision has been made to liquidate Nabd Logistics Services Co., which we consider an important corrective step. The company's investments are periodically reviewed, and a roadmap is being developed as a general direction for each investment.

In contrast, Atyaf, a facility and operations company, reached break-even after a series of operational improvements and has several projects underway that will have a positive impact in the future. Shifa Medical Co. continues to expand its home care services, while Ayadi Institute is working to provide quality training solutions aimed at improving the quality of the workforce in the individual sector, which will positively impact customer satisfaction.

*How do you face competition in the market, especially in the retail segment?

-We are aware that the market is witnessing the entry of new players, but at Maharah, we adhere to three pillars: quality, reliability, and customer experience. Despite the presence of companies offering services at lower prices, we continue to maintain a market share exceeding 13% thanks to our extensive network, the flexibility of our services, and our focus on innovation.

*At the beginning of 2025, you set specific targets for revenue, profits, and operations. How do you assess them so far?

-Since the beginning of the year, we have set a clear roadmap focused on revenue growth of 15% to 18%, an average workforce increase of more than 15%, and maintaining a gross profit margin of 9-11% and a net profit margin of 7-9%.

Today, we are pleased to announce that we have achieved—and even exceeded—a number of these targets in the first half of the year alone. For example, we exceeded our expected revenue growth rate, reaching more than 40% YoY, and we recorded an improvement in our gross profit margin within the targeted range. Strategic targets were also achieved in the retail and business segments, including signing contracts worth more than SAR 500 million, whose impact will be felt over the next two years. We also continued to maintain our market share in the retail segment and increased our market share in the business segment despite competition from low-cost service providers, which we consider an indicator of customer confidence and the excellence of the service experience at Maharah.

All these results confirm that we are steadily moving toward achieving all our 2025 targets, and even exceeding them in some areas, with our continued commitment to achieving operational efficiency, investing in technology, and enhancing service quality.

*What are your expectations for H2 2025?

-We expect the momentum to continue, backed by new contracts worth more than SAR 500 million and employing more than 6,200 workers. The impact of these contracts will gradually appear during H2 2025 and throughout 2026 and 2027. We also continue to work to improve margins and achieve greater efficiency, especially with the investments we have made in technology development and training.

*How do you see the role of the Ministry of Human Resources in supporting the growth of licensed companies and addressing challenges?

-The ministry plays a pivotal role in empowering companies operating in this sector, not only by supporting growth, but also by enhancing governance and compliance, diversifying recruitment sources, opening new channels such as home maintenance, training, and accommodation services, as well as supporting new programs related to improving service quality.