CGS management confident to deliver growth and meet financial targets for the current financial year ending March 31, 2026

Peter Faerber CEO of Consolidated Grünenfelder Saady Holding Co. (CGS)

Argaam Q&A with Peter Faerber – CEO, CGS

The company’s quarterly profits declined by 32%. What is your comment on these results, and what factors had the greatest impact?

The decline in quarterly profit year over year is a reflection of the timing impact of lower revenues during the first half of the fiscal year, which was 13.4% lower than the same period last year  at SAR 187.4 million, . The driver for this was the delayed timing of new orders in this fiscal year compared with last year. We expect to meet our financial targets for the fiscal year and deliver revenue growth of 8-11% over the prior year. We expect our full year profit margins to be in a similar range to the prior year.

Our order book is more heavily weighted towards the second half of the year than in prior years and performance is tracking above previous years based on the existing contracts and backlog.

The automotive solutions segment is considered one of your key business drivers. What recent market changes have affected this segment, and do you expect a gradual recovery in activity?

CGS is the market leader and will continue to achieve growth in line with the growth of the overall market as validated by independent market studies and supporting development of the Kingdom under Saudi Vision 2030 in critical sectors such as food & beverage and pharmaceuticals.

Favorable regulatory reforms from the Saudi Food & Drug Authority and regulatory tightening across a number of areas will likely further increase demand and market size beyond current estimates where we are well placed to take advantage of the reforms as the leader in the sector.

What are the most prominent initiatives you are working on to strengthen the company’s contracts and services in the coming periods?

Whilst the main contributor to our sales volumes has historically been the Automotive Solutions segment, our business has grown to offer much more than this. As a result, our revenues have diversified over time and will continue to do so as we look ahead. What we have seen this year, in particular, is a change in the mix of our segment contributions to our revenues with the traditionally smaller segments of Stationary refrigeration and Customized solutions becoming a larger proportion of our overall revenues.

We will continue to target growth within our existing core sectors and open up new service channels and revenue streams, as we develop new products  including customized solutions for the medical, defence, telecom, and oil & gas industries,

We are aiming to build one of Saudi Arabia’s most advanced manufacturing facilities, by investing in a new, high-tech manufacturing facility in Al Kharj Industrial City, which will adopt the latest production technology, featuring Industry 4.0 upgrades on control and process digitalization and establish dedicated production lines for ambulances, defence and logistics.

What message would you like to convey to shareholders and investors regarding the company’s strength and your outlook for the future?

Our deep domain experience, developed over many years, combined with leading industry-specific solutions means that we are the partner of choice for customers, with considerable scale compared to others present in the market. CGS is a market leader and has been present in the Kingdom for almost 50 years. We have a high-quality, longstanding and loyal customer base with the opportunity to grow our business further and play a significant role in the Kingdom’s growth journey in line with Saudi Vision 2030.

We remain confident in the outlook for the remainder of the year. The order book for fiscal year 2026 is more heavily weighted towards the second half and we already have a healthy order backlog for our fiscal year 2027 and even 2028.

What are your expectations for performance in the next quarter? Are you observing any positive indicators that could reflect a gradual improvement in demand or in the pace of operational activities?

We expect to grow quarter on quarter for the remainder of fiscal year 2026. We have good visibility on the current backlog and order intake throughout this year, which is sufficient to deliver the results guidance for Fiscal Year 2026.

We expect demand to continue to be strong as we move forward with the expected growth in the overall market allowing CGS to continue to grow as a market leader in the Kingdom.