Budget Saudi results reflect expansion, recovery to begin mid-Q2: CEO

He clarified that the strength of the company’s core revenue base was evident during this period, alongside temporary margin pressures that were expected as part of the investment and operational expansion cycle.

Net profit declined due to a dual impact: a temporary slowdown in short-term rental demand combined with higher operating expenses (OpEx). These factors fall under two main categories:

- Fleet strategy and asset valuation (non-cash impacts): The company proactively revalued its assets to reflect current market conditions, resulting in an additional SAR 20 million in depreciation due to more conservative assumptions on vehicle useful lives and residual values. It also increased accounts receivable provisions by SAR 6 million as a precautionary approach to collection periods.

- Operational and external challenges (cash impacts): The short-term rental business faced seasonal and geopolitical pressures, with utilization rates falling below 50% in some key regions and reaching 25% in the Eastern Province during Ramadan. This led to higher costs for underutilized fleet, alongside SAR 8 million in increased insurance costs and SAR 7 million related to total loss claims and a slowdown in the used car market.

Net cash generated from operating activities soared to SAR 90.9 million, compared to SAR 18.5 million in the same period last year.

Operationally, Budget Saudi added around 5,500 vehicles over the past 12 months, bringing its total fleet to more than 59,000 vehicles.

Danish expects a gradual improvement in fleet utilization starting mid-Q2 2026, with margins progressively recovering as the absorption cycle of new assets is completed.

He reaffirmed that the company’s priorities include expanding its long-term leasing portfolio, maintaining cost and capital discipline, and strengthening its competitive position in the local market.

According to Argaam data, the company reported Q1 2026 net profit of SAR 34.45 million, down 58% year-on-year (YoY), attributing the decline to lower margins driven by weaker utilization levels and higher operating costs.