Emaar EC eyes converting operating profit into actual cash flow, maximizing ROA: CFO

Mohammed Al-Arifi, CFO of Emaar The Economic City

Mohammed Al-Arifi, CFO of Emaar The Economic City stated that the main challenge for the developer in 2026 is converting operating profit into actual cash flow, which is achieved by accelerating collections, controlling spending, improving working capital management, and maximizing return on assets.

In an interview with Argaam, Al-Arifi expressed optimism about continued performance improvement in the coming periods to reach the company’s targets and meet shareholders’ expectations. 

He cited positive growth indicators, despite the real estate development cycle requiring more time for its full impact to materialize.

“We are focusing on strengthening recurring revenues across industrial, logistics, hospitality, and education segments, in addition to accelerating sales and securing new deals to achieve targets and ensure sustainable performance following the turnaround phase the company has undergone,” he continued.

Commenting on 2025 financial results, Al-Arifi stated that they marked a turning point from a phase of performance improvement and efficiency enhancement to a phase of value generation, with revenues rising to nearly SAR 1.14 billion compared to SAR 426 million in 2024, while operating profit reached SAR 368 million versus operating losses in the previous year.

He added that the net profit for Q4 2025 included a positive impact from the reversal of impairment losses on non-financial assets amounting to SAR 317 million, in accordance with IAS 36.

“Despite incurring a slight net loss of SAR 9 million, this represents a significant improvement compared to a loss of SAR 1.13 billion in 2024, driven by improved operational discipline and lower financing costs,” said the CFO.

He explained that the restructuring initiated in September 2024 marked a key turning point, as financing shifted from being a burden to an enabling tool. “This was achieved through loan rescheduling and accounting gains from partial debt amortization, which positively impacted the financial position during 2024 and 2025,” he added.

Al-Arifi also confirmed that Emaar EC has transitioned to a diversified revenue model, relying on sales, leasing, real estate development, and operations management.

The industrial and logistics zone represents a key pillar of recurring revenue, backed by rising occupancy rates, especially following the announcement of the King Salman Automotive Cluster in 2025. Combined with the land bridge project, the special economic zone, and King Abdullah Port, this positions the zone as a distinguished industrial and logistics hub on the Red Sea coast. The hospitality segment has also contributed to revenue, with ongoing efforts to improve profitability through pricing strategies, cost efficiency, and channel optimization, according to Al-Arifi.

The company’s asset base exceeds SAR 15 billion, spanning industrial, entertainment, administrative, and residential segments, said the COF, emphasizing ongoing efforts to maximize the return on assets through partnerships with both the public and private sectors to support growth.

He added that project details are announced upon signing, noting that the company is currently working on developing new strategic projects aimed at enhancing long-term shareholder value.

According to Argaam’s data, Emaar EC’s losses narrowed to SAR 9 million by the end of 2025, compared to SAR 1.13 billion in 2024. The fourth-quarter profits reached SAR 293 million, driven by one-off gains.