Tihama eyes advertising business resumption: CEO

In an interview with Argaam, Al Saleh said Tihama's return to advertising would be carefully planned through partnerships and alliances, adding that the company would not enter any project until its profitability had been established.

He noted that advertising is the company's identity and that it is the only company whose name has become synonymous with advertising. The advertising business came to an abrupt halt after competitors entered the market and offered contracts worth astronomical amounts.

Regarding the advertising business, Al Saleh said Riyadh Region Mayor Prince Faisal bin Abdulaziz bin Ayyaf had given initial approval to reschedule Tihama's debts owed to the municipality. The debts are subject to a final, non-appealable court ruling and arose from leasing advertising locations on Riyadh’s streets, he added.

Commenting on the delay in announcing Q3 2026 financial results, the CEO said the company's general assembly was held on Sept. 30, during which the external auditor responsible for reviewing the company's financial statements was changed, affecting the timetable for issuing the results.

The delay in holding the general assembly and the changes in executive management over the past period also contributed to postponing the completion of certain procedures related to preparing and announcing financial statements within the regulatory deadline, according to Al Saleh.

As regards the decision to terminate the distribution agreement with HMH ahead of its scheduled expiry in 2028, Al Saleh said the relationship began in 2010 and involved extensive cooperation that served more than 185 schools and established a large customer base in the Saudi market.

“We reviewed the agreement's performance over the past five years, specifically from 2021 to 2025, and found that the associated costs exceeded the returns generated,” he stated.

Tihama spent about SAR 93 million over the past five years under its HMH agency agreement, while revenue was estimated at around SAR 40 million. After accounting for operating, selling, and marketing expenses, the curriculum distribution business recorded a cumulative deficit of approximately SAR 26 million over the same period, prompting management to reassess the viability of continuing the agreement, said Al Saleh.

He also noted that the HMH-related business accounts for between 20% and 25% of the company's revenue, but the expenses associated with it exceeded the revenue generated.

The CEO said Tihama does not expect the termination of the agreement to have a negative impact on its future results, explaining that the amounts paid to the partner exceeded the revenue generated by the business. He added that there could be a limited short-term impact, but the company does not expect any negative long-term effect, believing the decision will serve its long-term interests.

Regarding the fate of existing inventory following the termination of the agreement, Al Saleh confirmed that all curricula and products held in the company's warehouses are fully owned by Tihama, having been purchased from HMH. He explained that most of the curricula currently in stock have obtained the required approvals from the National Center for Curriculum, adding that the company is holding ongoing meetings and coordinating with the center to renew certain approvals that expired last year.

The CEO also highlighted the important role played by the National Center for Curriculum in ensuring that international curricula are aligned with the culture of Saudi society. He affirmed that Tihama Distribution supports the center's role and will not distribute any curricula that do not comply with the Kingdom's culture, values, and principles.

Al Saleh noted that Tihama has successfully built a diversified investment portfolio and strategic partnerships with several leading international companies. These partnerships reflect Tihama's commitment to expanding its business, strengthening its market position, and leveraging global expertise and capabilities across the region.

He said Tihama's partnership with WPP Group is one of the company's most prominent and longest-standing strategic alliances. “WPP is one of the world's largest communications and marketing groups, with expertise spanning media, creative services, advertising, public relations, technology, and data,” Al Saleh added.

“Our relationship with WPP extends beyond the Saudi market to a broader presence across the Middle East and Africa. Through this partnership, Tihama has been associated with several leading international agencies, including Ogilvy, Grey, Mindshare, Wavemaker, and MediaCom,” he continued.

Moreover, an important aspect of the partnership is its role in advancing the creative sector in Saudi Arabia, showcasing the capabilities of Saudi talent, and opening new opportunities for local professionals to work with global brands and participate in campaigns and projects that receive international recognition.

Al Saleh said that investment in local talent is a key pillar of the partnership, with developing Saudi capabilities, transferring knowledge and expertise, and empowering local professionals as central elements in building a sustainable creative, communications, and marketing sector in the Kingdom.

He added that this approach aligns with the broader ambition of helping establish Saudi Arabia as a leading regional and global hub for creativity, innovation, and communications.

Regarding the company's plans to reduce losses and maximize profits, Al Saleh said Tihama is pursuing a strategy built around several key pillars.

He added that the first pillar is represented by entering into partnerships and alliances with local and international companies in advertising, production, and curriculum distribution.

Tihama Distribution has recently signed a cooperation agreement with Al Rowad International Group, which specializes in education, publishing, and distribution. Tihama Production is also in the final stages of signing an agreement with an international production company, with most of the contract terms already agreed upon, he continued.

Al Saleh highlighted the advantages of strategic alliances, including economies of scale, as partner companies share production costs rather than one company bearing the entire expense. Other benefits include easier market entry, access to diverse skills, and cooperation in reducing risks.

Meanwhile, the second pillar comprises diversifying revenue sources in the education sector. The company will not rely on a single publisher, but will distribute for multiple publishers. It will expand its provision of curriculum development and educational content preparation services, he stated.

Al Saleh further explained that the third pillar is represented in capitalizing on investment opportunities through the Etimad, Furas and Estithmar platforms. The company is also close to obtaining a Local Content Certificate, which grants national products a price preference in government tenders.

He added that the fourth pillar includes maximizing the value of existing assets, foremost among them the company's inventory.