Saudi Ground Services Company: Comprehensive Financial Analysis

Saudi Ground Services Company, abbreviated as SGSCO, was established to be the main operational arm for civil aviation ground support services in the Kingdom of Saudi Arabia. Its operations focus on the transport and logistics sector, making it the primary provider of passenger, baggage, and cargo handling services at all Saudi civil airports. The company is listed on the main market of Tadawul under the symbol 4031, with a paid capital of 1,880 million Saudi Riyals distributed over 188 million shares with a nominal value of 10 Riyals per share.

The ownership of the company is distributed among Saudi Airlines Holding, government investment funds, and private sector shareholders. Its services cover all Saudi airports, including new airports under Vision 2030 projects such as the Red Sea International Airport and NEOM projects. This extensive reach makes Saudi Ground Services Company a fundamental pillar in the value chain of the local aviation sector, playing a pivotal role in ensuring the efficiency of air travel operations and developing airport infrastructure.

Saudi Ground Services Company provides all activities related to aircraft handling on the ground. These services include pushback and towing of aircraft, baggage transfer between aircraft and passenger terminals, refueling aircraft, cabin cleaning, light ground maintenance, and support services for passengers with special needs.

The company operates through an integrated system of equipment and trained personnel, offering its services to various local and international airlines operating in the Kingdom. Its services comply with the highest international safety and quality standards, qualifying it to win service contracts with major airlines such as Riyadh Air and new tourism projects like the Red Sea Airport. The company also aims to enhance its services by adopting modern technologies and digitization, aiming to reduce wait times and improve passenger experience.

Saudi Ground Services Company has a diverse ownership structure that includes both government and private sectors. The main owner is Saudi Airlines Holding (Saudi Airlines), along with government entities such as the Public Investment Fund and the Civil Aviation Authority, as well as individual and institutional investors from the private sector.

Administratively, the company is led by a board of directors that includes representatives from major shareholders and independent regulatory bodies, with specialized committees overseeing audit, risk, and compensation. This diversity in management contributes to enhancing governance and ensuring operational and financial sustainability. The company also adheres to strict disclosure and transparency standards imposed by the Saudi Capital Market Authority.

Saudi Ground Services Company has witnessed significant growth in its financial results over the past two years. The stock price at the beginning of 2025 was approximately 39.80 Saudi Riyals, giving the company a market value of around 7.48 billion Saudi Riyals. The price-to-earnings (P/E) ratio was about 23.6, indicating a relatively stable profit position compared to sector averages.

In terms of profits, the company recorded a net annual profit for 2024 of 327 million Riyals, a growth of 55% compared to 2023. Fourth-quarter profits for 2024 rose to 95.8 million Riyals, while the first quarter of 2025 achieved profits of 97.6 million Riyals, with an annual growth rate exceeding 37%. This strong performance is attributed to increased business volume, new contracts, and improved operational efficiency.

Although full revenue details are not disclosed in available sources, the significant growth in net profits reflects an improvement in revenues and profit margins. Saudi Ground Services Company has greatly benefited from the reopening of tourism sectors and increased domestic and international air traffic post-pandemic, leading to a substantial rise in demand for ground handling services.

A large part of the revenue growth is attributed to the company securing strategic contracts with new airlines (such as Riyadh Air) and expanding its operations in developing airports. Investments in updating equipment and developing digital services have also contributed to enhancing efficiency and reducing operational costs, positively impacting net profit.

Saudi Ground Services Company follows a regular dividend distribution policy, making it a preferred choice for investors seeking periodic income. In 2024, the company decided to distribute cash dividends at a rate of 10% (1 Riyal per share) for the second half of the year. In 2025, it distributed 188 million Riyals (1 Riyal per share) for the first half of the year, bringing the total annual dividend yield to about 2 Riyals per share, equivalent to an annual dividend yield of approximately 5% based on the current stock price.

These distributions reflect the company's stable cash flows and its commitment to sharing profits with its shareholders while maintaining its ability to finance future expansions and capital projects.

The activities of Saudi Ground Services Company fall within the air transport and logistics sector, which is one of the most dynamic sectors in the Kingdom. The growth of the sector supports the trends of Vision 2030, which focuses on developing air infrastructure and increasing the tourism share in GDP. The government is continuously working on developing new airports and expanding the capacity of existing airports, thereby enhancing the demand for ground services.

In this context, the company benefits from its leading position and close ties to major development projects such as the Red Sea and NEOM. On the other hand, the regulatory environment in Saudi Arabia imposes restrictions on the entry of international competitors, granting the company a significant market share and continuous growth opportunities.

Saudi Ground Services Company enjoys a quasi-monopolistic position in the aircraft handling market in the Kingdom, covering all major airports. There are no local companies of comparable size, except for some small companies with limited operations or national airlines that provide ground services for their own fleets.

International competition is currently very limited due to regulatory restrictions, although the presence of global companies like Dnata or Swissport may pose future competition if regulations are adjusted. Key strengths of the company include operational scale, long experience, government partnerships, and the ability to win long-term strategic contracts.

In 2024 and 2025, Saudi Ground Services Company signed several strategic contracts that enhanced its financial and operational position. Among these contracts is a long-term agreement with Riyadh Air worth approximately 500 million Riyals and an agreement to provide ground handling services at the Red Sea International Airport, one of the most ambitious tourism projects in the Kingdom.

The company's general assembly also approved a set of new contracts with related parties in June 2025, with a total value of approximately 1.5 billion Riyals. These contracts secure future revenue streams and support the company's plans for expansion into new projects related to Vision 2030.

In May 2025, Saudi Ground Services Company announced the signing of credit facilities with local and international banks totaling 850 million Riyals. These facilities aim to finance capital expansions and major projects amid increasing demand for ground handling services.

This move reflects the confidence of banks and financial institutions in the company's credit position and the sustainability of its cash flows, providing the company with greater flexibility in implementing growth strategies without affecting its distribution policies or financial solvency.

Saudi Ground Services Company plays a pivotal role in achieving the objectives of the Kingdom's Vision 2030, particularly in the aviation and tourism sectors. Through its participation in new airport projects (such as the Red Sea and NEOM), the company contributes to enhancing air transport infrastructure and supports accelerated growth in passenger and cargo traffic.

The company's ability to adapt to the requirements of tourism projects and provide high-quality services enhances the Kingdom's competitiveness as a regional logistics hub. The company focuses on updating its fleet of equipment, training its personnel, and attracting the latest digital technologies to support growth and digital transformation strategies.

Despite Saudi Ground Services Company's leading position, it faces several potential challenges and risks. Among the most prominent are fluctuations in the global economy and oil prices, which may affect air travel and, consequently, the company's business volume. Additionally, the heavy reliance on local airlines makes the company vulnerable to any fluctuations in domestic demand.

In terms of competition, the opening of the market to international companies in the future may increase challenges, although the current regulatory environment provides high protection for local operators. Finally, any delays in implementing airport infrastructure projects or updating operational systems may impact growth plans and financial performance.

The growth prospects for Saudi Ground Services Company appear promising amid the continued expansion of the Saudi aviation sector and increased government investments in infrastructure. Long-term contracts, expansion into new airport projects, and the adoption of modern technological solutions enhance the company's ability to achieve sustainable profitable growth in the coming years.

The company is expected to benefit from the rising number of flights and passengers, especially with the lifting of travel restrictions and increased tourism activities. Additionally, the company's strategies in developing its services and improving operational efficiency will contribute to enhancing profit margins and achieving a competitive advantage in the market.

To obtain the latest information about Saudi Ground Services Company, it is advisable to refer to official sources such as the Saudi Capital Market website (Tadawul), the company's official website, and the Capital Market Authority. Specialized news platforms like 'Argaam' and 'Mubasher' also provide periodic reports and analyses regarding the company's performance and stock price.

Regularly reviewing these sources is essential to stay updated on contract developments, business results, distributions, and any regulatory changes that may affect the company or the air transport sector in general.