Sawaeed Holding

1. Company Overview & Earnings Context

Sawaeed Holding P.J.S.C. is an Abu Dhabi-based company registered on the Growth Market of the Abu Dhabi Stock Exchange. ESG Emirates Stallions Group PJSC is the parent company and Fount Trust is the ultimate parent. The Group’s activities include manpower recruitment and outsourcing, labour accommodation, real-estate investment and management, facilities management, catering and skills training. 

For the nine months ended 30 September 2026, Sawaeed delivered strong top-line and earnings growth. Revenue increased to AED 346.9 million from AED 305.2 million, while profit before tax rose to AED 76.8 million from AED 69.7 million. Management reiterated its focus on accelerating development across the Group’s operations to support sustainable growth.  

Growth was primarily supported by the Group’s core manpower and employment services business, complemented by a particularly strong increase in leasing income. Gross profit grew materially faster than revenue, indicating improved operating economics despite higher administrative costs.

2. Financial Performance Snapshot

• Revenue: AED 346.9 Million (+13.7% YoY)

• Cost of Operations: AED 235.4 Million (+9.5%)

• Gross Profit: AED 111.5 Million (+23.5%)

• Gross Margin: 32.1% vs. 29.6%

• G&A Expenses: AED 37.0 Million (+17.7%)

• ECL Reversal: AED 1.1 Million vs. AED 7.3 Million

• Investment Property Impairment: AED 0.8 Million vs. Nil

• Finance Income: AED 1.3 Million vs. AED 3.5 Million

• Finance Costs: AED 1.4 Million vs. AED 1.5 Million

• Other Income: AED 2.1 Million vs. AED 2.5 Million

• Profit Before Tax: AED 76.8 Million (+10.2%)

• Income Tax: AED 8.7 Million vs. AED 7.9 Million

• Net Profit: AED 68.1 Million (+10.2%)

• Parent-Attributable Profit: AED 67.8 Million (+9.7%)

• EPS: AED 1.33 vs. AED 1.21

• Q3 Revenue: AED 122.4 Million (+10.0%)

• Q3 Net Profit: AED 27.2 Million (+5.7%)

The key positive was the gross-margin expansion. Revenue grew 13.7%, while cost of operations increased only 9.5%, lifting gross profit by 23.5% to AED 111.5 million and increasing gross margin to approximately 32.1% from 29.6%. 

However, below-gross-profit items limited the conversion of this improvement into bottom-line growth. G&A expenses increased nearly 18%, the ECL benefit was substantially smaller than in 2025, finance income declined and the Group recorded an AED 0.8 million investment-property impairment. As a result, PBT and net profit grew approximately 10%, slower than gross profit.

3. Operating Performance & Major Programs

Manpower and employment services remained the core growth engine, generating AED 322.6 million of 9M revenue versus AED 292.3 million, an increase of approximately 10.3%. This activity represented roughly 93% of total Group revenue.

Other revenue streams also expanded:

• Leasing Income: AED 17.82 Million vs. AED 8.95 Million (+99.1%)

• Food & Catering: AED 4.78 Million vs. AED 3.36 Million (+42.2%)

• Training Services: AED 0.27 Million vs. AED 0.04 Million

• Other Services: AED 1.43 Million vs. AED 0.48 Million

Total service revenue reached AED 329.0 million, while leasing contributed AED 17.8 million. All reported revenue was generated in the UAE. 

The Group also continued simplifying its corporate structure. During the period, it completed the liquidation of Progressive Real Estate Development L.L.C – S.P.C. (PRED) and Sawaeed General Projects – Sole Proprietorship L.L.C. (SGP). The associated AED 7.1 million merger reserve was transferred to retained earnings. 

The broader operating platform continues to include Sawaeed Employment, Sawaeed Investment, Sawaeed Training Center, United International Group for Manpower Services and Solutions Investments Services, together with subsidiaries focused predominantly on manpower and employment services. 

4. Key Performance Drivers

Core manpower growth remained the principal revenue driver. Manpower and employment services increased by AED 30.2 million YoY to AED 322.6 million, accounting for most of the absolute increase in Group revenue.

Leasing provided an additional growth catalyst. Leasing income almost doubled to AED 17.8 million from AED 9.0 million, meaning real-estate-related income made a substantially larger contribution than in the prior period.

Gross-margin expansion was the strongest underlying earnings feature. Revenue increased 13.7%, but cost of operations grew only 9.5%. Consequently, gross profit increased 23.5%, and gross margin expanded by approximately 250 basis points to 32.1%.

Administrative expenses partially diluted operating leverage. G&A increased to AED 37.0 million from AED 31.5 million, a 17.7% rise, which was faster than revenue growth. 

The ECL benefit normalized. Sawaeed recorded an AED 1.1 million reversal of expected credit losses versus a much larger AED 7.3 million reversal in 9M 2025. This approximately AED 6.2 million reduction in the YoY ECL benefit explains part of why PBT growth lagged gross-profit growth. 

The receivables position still carries a sizeable provision. Gross trade and unbilled receivables totaled approximately AED 228.0 million, against which the Group held AED 110.9 million of ECL provisions. However, AED 30.5 million of trade receivables relates to the previous owner and is fully provisioned under the relevant agreement. 

Investment-property impairment provided another modest headwind, with AED 0.77 million recognized in 9M 2026 versus nil in the comparable period. 

5. Balance Sheet, Backlog & Cash Flow

• Total Assets: AED 412.8 Million vs. AED 481.2 Million (-14.2%)

• Total Equity: AED 260.2 Million vs. AED 337.1 Million (-22.8%)

• Total Liabilities: AED 152.7 Million vs. AED 144.1 Million (+5.9%)

• Trade & Other Receivables: AED 156.2 Million vs. AED 145.9 Million

• Investment Properties: AED 93.1 Million vs. AED 96.8 Million

• Goodwill: AED 33.8 Million, unchanged

• Bank Deposits: AED 51.5 Million vs. AED 119.2 Million

• Cash & Cash Equivalents: AED 55.3 Million vs. AED 59.4 Million

• Trade & Other Payables: AED 66.3 Million vs. AED 67.7 Million

• Employee End-of-Service Benefits: AED 32.7 Million vs. AED 29.0 Million

• Operating Cash Flow: AED 76.2 Million vs. AED 97.9 Million

• Investing Cash Flow: +AED 66.0 Million vs. +AED 50.5 Million

• Financing Cash Flow: AED (146.4) Million vs. AED (156.3) Million

• Dividends Declared & Paid: AED 145.0 Million

• Period-End Cash: AED 55.3 Million

The decline in total assets largely reflects the reduction in bank deposits to AED 51.5 million from AED 119.2 million, while cash remained relatively stable at AED 55.3 million. 

Operating cash generation remained healthy at AED 76.2 million, although it declined from AED 97.9 million. Working-capital pressure came principally from a AED 14.2 million increase in trade and other receivables. 

Investing cash flow was positive at AED 66.0 million, primarily because AED 67.8 million was released from longer-duration bank deposits. Financing cash flow was negative AED 146.4 million, almost entirely reflecting the AED 145 million dividend distribution. Period-end cash consequently remained at AED 55.3 million.  

The dividend was distributed through two shareholder approvals during 2026: AED 105 million (AED 2.055/share) and AED 40 million (AED 0.78/share). 

Traditional industrial backlog/order-book information is not disclosed in the interim statements. For Sawaeed, ongoing manpower/service contracts and customer relationships are more relevant indicators of forward revenue visibility, but the uploaded documents do not provide a quantified contract backlog.

6. Investor Takeaway

Sawaeed Holding delivered a solid 9M 2026 operating performance, characterized by double-digit revenue growth, stronger gross profitability and continued positive operating cash generation.

The strongest feature is the improvement in underlying operating economics. Revenue increased 13.7%, but gross profit rose 23.5%, expanding gross margin from approximately 29.6% to 32.1%. The core manpower and employment business remained the primary driver, while leasing income nearly doubled and provided meaningful incremental growth.

Net earnings growth was more moderate at approximately 10% because several below-gross-profit factors offset part of the operating improvement. These included higher G&A expenses, a much smaller ECL reversal, lower finance income and an investment-property impairment.

Cash generation remains supportive, with AED 76.2 million of operating cash flow, although this was below the prior-year level. The more significant balance-sheet development was capital distribution: AED 145 million of dividends exceeded the AED 68.1 million net profit generated during the nine-month period, contributing to the decline in equity from AED 337.1 million to AED 260.2 million. Bank deposits were also reduced materially, although combined cash and longer-term bank deposits still amounted to approximately AED 106.7 million at period-end.

Receivables remain an important monitoring area. Trade and other receivables increased, while the Group continues to carry a substantial ECL allowance against legacy and other balances. Future investor attention should therefore focus on manpower revenue growth, sustainability of the improved gross margin, G&A discipline, receivable collections/ECL trends, operating cash conversion, leasing growth and the relationship between future dividends and internally generated earnings.

Deloitte reviewed the interim financial information in accordance with ISRE 2410 and issued an unmodified conclusion, stating that nothing came to its attention causing it to believe the financial information was not prepared, in all material respects, in accordance with IAS 34. The review report was dated 27 October 2026. 

Overall, Sawaeed’s 9M 2026 results indicate strengthening underlying operations and improved gross margins, but the high level of shareholder distributions and sizeable receivables/ECL balance make cash conversion and balance-sheet discipline important areas to monitor alongside continued earnings growth.