SPIMACO CFO: Current operating indicators signal continued business strength

SPIMACO CFO Abdulaziz Al-Oud said government-sector sales and international expansion continued to drive revenue growth.

Saudi Pharmaceutical Industries and Medical Appliances Corp. (SPIMACO) delivered strong financial performance in Q2 2026, reflecting both improved earnings quality and revenue growth, CFO Abdulaziz Al-Oud told Argaam.

The company leveraged higher sales, an improved product mix and sales channel, and continued initiatives to enhance operational efficiency and cost management, all of which supported profitability margins, he said.

While results also benefited from year-on-year (YoY) comparisons, net profit growth outpaced revenue growth, reflecting stronger operating performance and the company's ability to convert commercial growth into more efficient and sustainable financial results.

Revenue growth was driven by improved performance across multiple business segments and sales channels, a strong contribution from the government sector, resilient demand from the private sector, and robust growth in international sales, Al-Oud said.

During H1 2026, private-sector sales reached SAR 507 million, while government-sector sales totaled SAR 257 million.

Although the private sector remained the largest contributor to revenue, the government sector was the primary growth driver, with sales increasing by approximately 55% YoY.

Al-Oud said the private sector's performance mainly reflected changes in the sales mix across distribution channels rather than weaker demand for the company's products, underscoring SPIMACO's success in diversifying its revenue base and reducing reliance on a single sales channel.

Commenting on the business segments that contributed most to second-quarter profit growth, the CFO said earnings growth was fueled by balanced contributions across several business activities rather than a single segment.

The government sector posted strong growth, while international sales increased sharply, Al-Oud said.

He emphasized that the private sector maintained its position as the company's largest revenue contributor, reflecting the diversity of SPIMACO's business portfolio and providing greater flexibility to navigate changing market conditions and deliver sustainable growth.

As for the 134% increase in international sales, Al-Oud said the performance reflects the company's progress in executing its regional expansion strategy, strengthening its product presence in overseas markets, and benefiting from commercial partnerships established during the past period.

SPIMACO does not typically disclose the performance of each market separately, he said, adding that the growth was generated across several regional markets rather than being driven by a single country.

Looking ahead to H2 2026, Al-Oud said the company expects international sales to maintain their positive momentum, while acknowledging that growth rates may vary quarter-on-quarter depending on shipment schedules and contract execution.

Nevertheless, the company remains optimistic about the contribution of international markets to medium- and long-term growth, he said.

Commenting on Q3 2026 estimates, the CFO said current operating indicators reflect the continued strength of the company's business.

He said SPIMACO will continue focusing on revenue growth, improving operating efficiency, and enhancing profitability while capitalizing on strategic initiatives, including international expansion, the development of specialized businesses, and strengthening its product portfolio.

At the same time, the company will maintain its focus on operational discipline and cost management to support balanced, sustainable growth and create long-term shareholder value.

Responding to a question on whether geopolitical disruptions had affected costs, product availability, shipping, or distribution, Al-Oud said the company has not experienced any material impact on its operations or its ability to meet market demand.

He attributed this resilience to diversified sourcing, proactive inventory management, and an efficient supply chain, all of which have enabled uninterrupted operations without any meaningful effect on performance.

The CFO added that the company continues to monitor global developments closely but believes the flexibility of its business model and the strength of its operating platform position it well to manage any potential changes.

At present, SPIMACO does not expect any material pressure on profitability margins.

Commenting on the company's recent five-year agreement with Saqala Medical as a second distributor in the UAE and Qatar, Al-Oud said the partnership represents a strategic step in expanding SPIMACO's presence in Gulf markets by strengthening its distribution network and broadening the reach of its products.

He noted that no financial impact can be disclosed at the time of signing, as future contributions will depend on the pace of product registrations, demand levels, and commercial activity over the coming period.

The company views the agreement as a strategic investment that supports its regional growth plans and enhances opportunities to increase sales and market share over the long term.

Al-Oud concluded that SPIMACO benefits from a diversified business model spanning the government and private sectors, in addition to international sales and contract manufacturing, providing resilience and reducing reliance on any single source of revenue.