Nahdi Medical lifts third-quarter profit 6.6% to 171.8 million riyals
Key Facts
Nahdi Medical Company’s net profit rose 6.6% year on year in the third quarter of 2026 to 171.8 million riyals from 161.2 million riyals in the year-earlier period, CNBC Arabia reported, citing the company’s results on October 28. Profit growth came as revenue increased 9.4% to 2.69 billion riyals from 2.46 billion riyals a year earlier. But higher sales did not prevent gross margin from contracting to 35.5% from 38.2%. Gross profit rose 1.7% to 956.9 million riyals, while operating profit increased 4.4% to 195.9 million riyals from 187.6 million riyals. The results reflect a divergence between annual growth in revenue and profit and pressure on margins, as net profit declined from the previous quarter.
The company attributed revenue growth to strong retail performance, alongside a 23.9% increase in healthcare sales and 31.4% growth in regional operating businesses during the quarter. It said the decline in gross margin was linked to a change in the business-segment mix. It pointed to accelerating growth in healthcare services and e-commerce platforms among the factors associated with the change. The company also said its continued investment to support sales growth contributed to shaping the mix. Gross profit also increased, but its 1.7% growth was slower than revenue growth of 9.4%.
Quarter on quarter, revenue rose 0.7% compared with the second quarter of 2026, while net profit fell 20.2%. The company linked the decline to lower gross profit resulting from a change in the business-segment mix. The divergence shows that the increase in revenue from one quarter to the next was not matched by a similar rise in net profit. The year-on-year trend was different, with net profit up 6.6% and revenue up 9.4%. Nahdi shares, listed under the symbol 4164.SR, closed at 89 riyals on October 28, according to EL7 data. This was the closing price recorded that day.
In the first nine months of 2026, revenue rose 7% to 8.16 billion riyals, compared with 7.62 billion riyals in the corresponding period a year earlier. Despite sales growth, net profit fell 4.9% to 622.7 million riyals from 654.8 million riyals. Operating profit also declined 2.3% to 701.5 million riyals. The company attributed sales growth during the period to increases of 5.7% in retail sales, 32.1% in healthcare and 29.1% in regional operating businesses. Healthcare and regional businesses grew faster than retail, while overall revenue growth remained below the pace of net profit growth in the corresponding period.
The company attributed the decline in net profit over the first nine months to higher operating expenses related to strategic growth initiatives, expansion in healthcare and digital transformation. It added that other expenses after operating profit increased by about 15.4 million riyals compared with the corresponding period. It linked the increase to lower returns from Islamic investment instruments and higher zakat provisions. These items provide context for the gap between year-on-year revenue growth over the nine months and declines in net profit and operating profit. In the third quarter, meanwhile, annual profit growth coincided with a quarterly decline in net profit, amid a change in the business mix and pressure on gross margin.