Gulf Pharmaceutical Industries

1. Company Overview & Earnings Context

Gulf Pharmaceutical Industries – Julphar is an Abu Dhabi Securities Exchange-listed pharmaceutical company headquartered in Ras Al Khaimah. The Group's core activities include the manufacturing and sale of medicines, drugs, pharmaceutical and medical compounds, as well as cosmetic products.

Julphar delivered a significant improvement in its continuing operations in H1 2026. Revenue increased 4.7% YoY to AED 573.7 million, while net income from continuing operations jumped to AED 56.2 million from AED 5.6 million.

2. Financial Performance Snapshot

• Revenue: AED 573.7 million (+4.7% YoY)

• Gross Profit: AED 261.2 million (+18.3% YoY)

• EBITDA: AED 86.8 Million (+84.7% YoY)

• Operating Profit: AED 63.5 Million (+172.5% YoY)

• Profit Before Tax from Continuing Operations: AED 61.5 Million, vs. AED 9.5 Million

• Net Income from Continuing Operations: AED 56.2 Million (+903.6% YoY)

• EPS from Continuing Operations: 4.86 fils, vs. 0.48 fils

The improvement in profitability significantly outpaced revenue growth, reflecting a better product mix, operational efficiencies, and lower finance costs.

3. Regional & Operational Performance

Growth was primarily driven by Julphar's core GCC markets. UAE revenue increased 15.3% YoY to AED 240.6 million, while revenue from other GCC countries rose 13.9% to AED 181.6 million. Revenue from other international markets declined 15.7% to AED 151.5 million.

During H1, Julphar launched four new products representing eight SKUs in the UAE and completed 16 international registrations outside the UAE. The company also continued progressing its planned new manufacturing facility in Saudi Arabia, including licensing, R&D and pipeline development for selected biotechnology and specialty products.

4. Key Performance Drivers

Julphar's H1 results show a substantial improvement in the profitability of its underlying pharmaceutical operations. Gross profit increased 18.3% despite revenue growing only 4.7%, supported by improved product mix and operational efficiency initiatives.

Finance costs also declined sharply to AED 6.9 million from AED 21.6 million, helping profit before tax from continuing operations rise to AED 61.5 million from AED 9.5 million.

Importantly, total reported net profit was AED 54.5 million, down 58.5% YoY. However, H1 2025 included a AED 118.7 million one-off gain from the disposal of Zahrat Al Rawdah Pharmacies. Excluding the impact of discontinued operations and the prior-year disposal gain, Julphar's continuing operations showed significantly stronger underlying earnings.

5. Balance Sheet, Cash Flow & Financial Position

Julphar's total equity increased to AED 1.016 billion at the end of June 2026 from AED 959.8 million at the end of 2025. Accumulated losses improved to AED 106.9 million from AED 163.0 million, primarily supported by the profit generated during H1.

Following its debt restructuring completed in 2025, Julphar reported AED 263.8 million in total loans and other interest-bearing debt as of June 2026.

Cash flow was weaker despite improved profitability. Julphar used AED 4.3 million of net cash in operating activities, compared with AED 48.3 million generated in H1 2025, mainly reflecting movements in working capital, including higher receivables and inventories.

6. Growth Strategy & Investor Takeaway

Julphar remains focused on expanding its presence in selected markets, strengthening in-house R&D, pursuing strategic alliances, launching new products and progressing its planned pharmaceutical manufacturing investment in Saudi Arabia.

The company invested AED 19.2 million in capital expenditure during H1, covering infrastructure upgrades, equipment modernisation, process optimisation and R&D. It expects to continue investing in manufacturing capabilities and product development.

Overall, Julphar's H1 2026 results point to a strong turnaround in its continuing operations. Revenue growth was modest at 4.7%, but gross profit rose 18.3%, EBITDA increased 84.7%, and continuing net income increased more than tenfold to AED 56.2 million.

The key areas to monitor in H2 2026 are continued margin improvement, GCC sales growth, cash generation, new product launches, reduction of accumulated losses and progress on the planned KSA manufacturing facility.