Riyal: Everything You Need to Know About Riyal Investment and Development

Riyal Investment and Development Company was established to be a contributor to the investment and leasing services sector in the Kingdom of Saudi Arabia by providing innovative solutions for leasing vehicles and equipment to government and private sectors. The company is listed on the parallel market (Nomu) under the symbol 9584, which is a market dedicated to small and medium-sized enterprises that are subject to less stringent listing and trading requirements compared to the main market. This market attracts qualified investors looking to diversify their investment portfolios through stocks with lower trading volumes and liquidity, but which often hold promise for future growth.

Riyal's activity revolves around investment and development with a particular focus on long-term leasing contracts, especially with government entities that rely on vehicle and equipment leasing services as part of their operational processes. These contracts reflect the company's importance in supporting the government sector and provide it with a competitive advantage in the investment and leasing services market. The company relies on relatively small capital, which affects the trading volume and daily liquidity of its stock, while simultaneously offering investors an opportunity to explore small companies with varying returns and risks.

Riyal's business focuses on providing vehicle and equipment leasing services, which include leasing the government fleet of transport vehicles, trucks, and buses, in addition to managing and maintaining these fleets. The company primarily contracts with government or quasi-government entities, which grants it relative revenue stability through long-term contracts. The company also seeks to diversify its activities by entering into other developmental and investment projects, such as infrastructure services supporting transportation and logistics.

Government leasing contracts contribute to enhancing the company's cash flows and provide it with a stable customer base. However, this focus carries challenges related to competitiveness and scalability, especially in light of the presence of other companies offering similar or complementary services. Additionally, reliance on contracts with specific entities imposes on the company the necessity to achieve high levels of operational efficiency and commitment to quality to ensure contract renewals and the continuity of partnerships.

Riyal has witnessed a series of significant financial developments during 2024 and 2025. The company's stock price at the end of the session on December 4, 2025, was approximately 17.80 Saudi Riyals, showing a slight increase from the previous close. The company's market capitalization is estimated at around 178 million Saudi Riyals, assuming the number of issued shares is approximately 10 million shares.

In terms of profitability, the annual net profit for 2024 was approximately 16.4 million Riyals, down 10% from 2023, when the company recorded 18.3 million Riyals. This decline reflects challenges in achieving growth or stability in revenues and may be related to rising operational costs or changes in government contracts. The price-to-earnings (P/E) ratio was approximately 10–11 times, placing the stock within the range of small companies with limited risks and liquidity.

Regarding cash distributions, the company's board of directors approved a cash dividend of 5% of the nominal value of the share for 2024 (i.e., 0.5 Riyal per share with a nominal value of 10 Riyals), which provides a dividend yield of approximately 2.8% based on the current price. The results for the first half of 2024 showed a net profit of 9.9 million Riyals, while the second half produced about 6.5 million Riyals, indicating continued pressure on profitability throughout the year.

Data from Riyal over recent years shows a pattern of contraction in net profits. In 2022, the net profit was 19.1 million Riyals, declining to 18.3 million Riyals in 2023, and then to 16.4 million Riyals in 2024. This relative decline reflects a combination of factors, most notably competition in the fleet leasing market, changes in contract terms, and rising operational and maintenance costs.

Although the company has not disclosed detailed information on operational revenue growth, the decline in profits likely reflects stable revenues against rising expenses or a decrease in profit margins. It is important to note that the continued distribution of dividends despite declining profitability reflects management's desire to maintain shareholder confidence and stable cash flows, but it may also indicate limited new investment opportunities or the need to enhance liquidity for shareholders.

Riyal belongs to the investment and leasing services sector, which plays a pivotal role in supporting the infrastructure and logistics services of the Kingdom. The performance of this sector is closely linked to government trends, especially with the accelerated implementation of Vision 2030 projects aimed at diversifying the Saudi economy and increasing the private sector's contribution to development. Through leasing contracts with the government sector, Riyal contributes to achieving the goals of developing transportation and efficiently managing government fleets.

With increasing government spending on infrastructure projects, new opportunities arise for leasing and investment companies, such as updating vehicle fleets or expanding the government transportation network. However, these opportunities are often accompanied by competitive and financial challenges, especially with the entry of new companies or shifts in government contract requirements. Given the company's relatively small size, its ability to capitalize on these opportunities depends on its operational flexibility and the quality of its services.

Riyal's stock is characterized by low daily trading volume compared to companies listed in the main market. For example, during one session, only 283 shares were traded, with a total value of approximately 5,000 Riyals. This is due to the limited number of issued shares and the small size of the company, in addition to the fact that Nomu market is primarily directed towards qualified investors with experience.

This low liquidity means that the stock may be more susceptible to price fluctuations resulting from small buy or sell orders, which can pose a challenge for investors looking to enter or exit their investment quickly. Additionally, limited liquidity reflects the nature of the parallel market, which offers growth opportunities but carries additional risks related to price volatility and the difficulty of liquidating shares in some cases.

In 2024, Riyal highlighted the signing of a vehicle leasing contract extension with a government entity worth 54.5 million Saudi Riyals, which enhances its revenue stability in the medium term. Such contracts reflect the company's ability to retain its public sector clients and renew existing partnerships.

These projects directly impact the company's financial results and provide it with a competitive advantage in the government leasing services market. They also allow the company to enhance its position within the government supply chain and provide future opportunities for expansion in transportation and logistics-related sectors. It is important to monitor the company's ability to attract new contracts and diversify its customer base to enhance financial stability and growth.

Riyal has demonstrated a commitment to a regular cash dividend distribution policy in recent years, with the board of directors approving a distribution of 5% of the nominal value of the share for 2024 profits, which was approved at the general assembly. This policy reflects the company's desire to reward shareholders and maintain their confidence, even with declining profitability ratios.

The current dividend yield (approximately 2.8%) is relatively good within the small companies sector in the Nomu market, but it may change depending on stock price fluctuations and the company's performance in future periods. Additionally, the company's continued distribution despite declining profits may reflect limited internal growth opportunities or management's desire to maintain a stable financial image. It is important for investors to monitor the sustainability of this policy in light of future changes.

Despite the limited direct competitors for Riyal in the field of government vehicle leasing, the competitive environment includes other small real estate and investment companies listed in the Nomu market, in addition to financing and leasing companies linked to banks or specialized leasing companies. Some industrial and service companies may also compete indirectly by providing complementary or overlapping services with Riyal's activities.

The absence of direct competition provides the company with an opportunity to enhance its market share in government contracts, but at the same time poses a challenge in diversifying its customer base and expanding its activities beyond government sectors. With the entry of startups or the expansion of some existing companies in the leasing field, Riyal may face future challenges related to maintaining its competitive position and attracting new contracts.

Riyal faces a range of risks associated with the nature of the parallel market and low liquidity, in addition to its reliance on a limited number of government contracts. Fluctuations in interest rates, changes in government spending policies, and any delays in contract renewals or declines in demand for leasing services are among the most significant risks that may affect the company's performance.

Moreover, the company's reliance on a limited customer base increases the risks associated with contract renewals or the loss of part of its revenues if existing partnerships do not continue. Additionally, fluctuations in operational costs and fleet maintenance may exert additional pressure on profit margins. It is essential for the company to continue developing its operational capabilities and diversifying its revenue sources to mitigate the impact of these challenges.

Riyal's performance is directly affected by the general economic conditions in the Kingdom, especially with its contracts linked to government entities and the level of public spending on infrastructure projects. The Saudi economy witnessed a relative recovery in 2024, supported by increased government spending; however, the global economic slowdown and stable oil prices placed some pressures on small and medium-sized enterprises.

This economic environment requires companies like Riyal to be flexible in managing expenses and improving operational efficiency to keep pace with changes. Furthermore, the continued government spending on transportation and logistics projects represents a growth opportunity, but with the need to monitor economic shifts and financing policies that may affect future demand in the leasing and investment sector.

The recent period has included several key developments for the company, including the signing of a vehicle leasing contract extension worth 54.5 million Riyals in July 2024, and the announcement of financial results showing a 10% decline in annual profits compared to the previous year. Additionally, the board of directors approved a cash dividend distribution of 5% for 2024, which was approved at the shareholders' general assembly.

The company is currently seeking to strengthen its financial position by controlling expenses and focusing on developing new business. Internal discussions have also begun regarding gradual expansion in the services offered and attracting new contracts. The company is expected to continue focusing on government leasing activities while monitoring market developments for additional growth opportunities.

Investors and followers of Riyal have several official and reliable sources to obtain the latest information and updates about the company. The Saudi financial market (Tadawul) website is the primary source for price data, financial statements, and official announcements. The Saudi Capital Market Authority (CMA) also requires companies to disclose any material or financial events, ensuring that investors receive accurate information regularly.

Additionally, specialized news websites such as Argaam and Mubasher provide comprehensive coverage of the company's news and financial analyses. The official website of Riyal (if available) can also be referred to for official statements and periodic reports issued by management. It is always advisable to rely on official and trustworthy sources when analyzing the company's performance or making any financial decisions.