Revenue rises slightly, matching Bloomberg’s and our estimate
Arabian (Cenomi) Centers’ revenue inched up 0.8% YoY in 1Q25, coming in line with Bloomberg consensus (+0.7% variance) and our estimate (+0.1% variance). Revenue growth came despite a loss of contribution from Dhahran Mall, supported by higher net rental revenue, which benefited from improved occupancy (93.1% from 92.5% in 1Q24). Increased media sales, utilities, and other revenue also aided revenue growth.
Net income surges, exceeding our expectations
While revenue rose slightly, a significant decrease in cost of revenue (-20.1% YoY), advertising & promotional expenses (-64.1% YoY), impairment loss on a/c receivables (-18% YoY), and an increase in other income by SAR 27.8mn, led by gains from the sale of Sahara Plaza, boosted net profit in 1Q25 (+20% YoY). Net profit missed the Bloomberg consensus, but exceeded our expectations.
Maintain the target price
We maintain our SAR 26 target price on Cenomi’s stock. The company’s BoD recommended SAR 0.375 DPS for 4Q24, in line with our estimate, offering an attractive dividend yield of about 7.5% (annualized).