Trading Facilities: Comprehensive Definition and Future Analysis

The term 'Trading Facilities' refers to the process of listing and operating public utility companies within the Saudi financial market (Tadawul). This concept emerged with the government's direction to privatize certain service sectors, transferring their management from the public sector to public joint-stock companies. The Facilities Company represents a model for these companies, as it will manage and operate infrastructure for water, sewage treatment, and waste disposal, focusing on improving operational efficiency and attracting private capital. The listing of utility companies on Tadawul aims to provide investors with the opportunity to participate in the growth of this vital sector while enhancing transparency and governance through periodic disclosures and financial market requirements. The Facilities Company is expected to play a pivotal role in this transformation, especially with its readiness for the official listing scheduled for November 2026.

The Facilities Company was established as part of Saudi Vision 2030, in collaboration with the Public Investment Fund and relevant government entities concerned with water and the environment. The company's goal is to transfer the management and operation of water, sewage, and waste projects from the public sector to the private sector, thereby increasing operational efficiency and enhancing investment opportunities in these important sectors. Facilities plays a strategic role in supporting major city projects such as Riyadh, Jeddah, and Mecca, by signing long-term contracts for managing and operating water and treatment facilities. Additionally, the company seeks to build partnerships with international institutions to bring in modern technologies and improve service quality. This strategic role makes Facilities a model for integration between the public and private sectors in developing Saudi infrastructure.

The Saudi stock market (Tadawul) announced plans to list the Facilities Company in September 2026, before the date was postponed to November 24 of the same year. This postponement was due to the need to complete certain legal and operational procedures and ensure the company's readiness to comply with financial market requirements. The listing process will involve offering a portion of the company's shares for public subscription, with the offering price determined based on asset evaluations and operational contracts. This listing reflects the government's ambition to attract new capital and achieve financial sustainability for the utilities sector. The listing of Facilities is expected to be a qualitative step in enhancing the sector's structure and providing new investment opportunities for local and international investors. So far, no official prospectus has been issued, but monitoring regulatory developments through the Tadawul website remains essential for interested parties.

The Facilities Company operates within the public utilities sector, which includes managing and operating water facilities, sewage treatment, waste disposal, and energy services. This sector is considered vital to the Saudi economy due to its role in supporting the growth of cities and mega-projects such as NEOM, Qiddiya, and the Red Sea. The sector is characterized by long-term contracts, relative revenue stability, and its close ties to government policies and development projects. Additionally, the sector is witnessing continuous technological development with the introduction of smart city technologies and environmental sustainability, raising the level of challenge and providing opportunities for growth and innovation. Upon its listing, Facilities will seek to benefit from these transformations by managing strategic projects and adopting the latest technologies.

Although the Facilities Company has not yet been listed on Tadawul, some press reports indicate that it achieved profits of approximately 514 million SAR in the first half of 2022, and 714 million SAR in the first nine months of the same year, with notable annual growth. This financial performance, while estimated, reflects the strength of the operational contracts managed by the company. Compared to other utility sector companies, Facilities is expected to achieve regular dividends ranging between 10–20% of the nominal share price after listing. The initial market capitalization may range between 3 to 5 billion SAR at the offering, according to market estimates of guaranteed contracts and operational assets. It is important to note that these figures are unofficial and subject to change upon the issuance of the prospectus and final financial information.

To provide the reader with a clear picture of the Facilities Company's position in the market, it can be compared to some listed infrastructure companies such as Hill Cement Company (symbol 3001). Despite the operational sector difference (utilities vs. building materials), cement companies are considered an indicator of the size of projects and infrastructure in the Kingdom. For example, Hill Cement's share price ranged between 50 and 60 SAR in 2024, with a market capitalization of approximately 10 billion SAR and a price-to-earnings ratio ranging between 10 and 15 times. These figures reflect market interest in companies with stable returns and highlight the importance of long-term contracts in achieving sustainable revenues. Upon the listing of Facilities, it is expected that valuation indicators will be similar to these companies if strong operational contracts and attractive dividends are secured.

The public utilities sector in Saudi Arabia is characterized by limited direct competition due to the nature of long-term government contracts and the need for projects to have substantial capital and advanced technical expertise. The National Water and Electricity Company (NWC) is the main government competitor, but it is not listed in the financial market. Additionally, there are some local and regional companies specializing in water desalination, waste treatment, and energy recycling, but they often operate through government partnerships or private contracts. The entry of Facilities into the market will create a new player with a quasi-governmental nature, which may lead to more collaboration and partnerships rather than direct competition. Furthermore, the nature of the sector requires continuous investment in modern technologies and digital transformation, presenting both challenges and opportunities.

The Facilities Company aims to expand its activities by acquiring contracts for major projects, such as the second project for treating Jeddah's water, in addition to entering into water desalination projects in major cities like Mecca and Medina. The company also aspires to build strategic partnerships with global companies to supply water and energy treatment technologies and benefit from international expertise in resource sustainability. The expansion plan also includes targeting new infrastructure projects related to smart cities, which will increase potential revenue and enhance the company's position in the sector. This strategy reflects the company's direction to build a strong and sustainable income base before the official listing.

The utilities sector traditionally features a policy of regular dividends due to stable revenues and the long duration of operational contracts. Preliminary estimates indicate that total dividends in the water and electricity sector exceed 118 million SAR annually. Upon the listing of the Facilities Company, it is expected to adopt a competitive dividend policy to attract investors, with the potential for achieving an annual return ranging between 10–20% of the nominal share price. It is important to monitor the official prospectus to know the final dividend policy, as it will be determined based on the company's financial results and the volume of signed contracts. Generally, dividends represent one of the attractive factors for investment in utility companies, especially for investment funds seeking stable and long-term returns.

The utilities sector in Saudi Arabia is experiencing rapid digital transformation, especially with the introduction of smart city technologies and Internet of Things (IoT) applications in water and energy networks. The Facilities Company seeks to adopt these technologies to improve operational efficiency, reduce waste, and enhance environmental sustainability. Digital transformation projects include the installation of smart meters, remote monitoring systems, and predictive maintenance solutions based on data analysis. In terms of sustainability, the company is committed to resource conservation standards and reducing emissions, in line with local and international regulations. This approach enhances Facilities' competitiveness in the future and increases its attractiveness as an innovative and technology-driven service provider.

Despite the significant opportunities ahead for the Facilities Company, there are several risks and challenges that must be considered. Among the most prominent risks are delays in executing major projects, heavy reliance on government contracts, changes in regulatory policies or government tariffs, and fluctuations in energy and operational material prices. Additionally, the company may face competition from international companies offering technologies or services at lower prices. Changing environmental regulations may impose additional financial obligations. It is essential for the company to adopt effective risk management policies and continue to develop its technical and administrative infrastructure to keep pace with market changes and ensure sustainable growth.

Recently, there have been several significant developments in the path to listing the Facilities Company in the financial market. The most notable of these developments was the announcement of Tadawul postponing the listing date to November 24, 2026, to complete certain legal and operational procedures. Additionally, media reports indicated the company's imminent acquisition of a stake in the second Jeddah water treatment project, which will enhance its operational income base. Furthermore, there are indications that the company is entering into partnerships with international entities to supply water and energy treatment technologies. The official prospectus is expected to be issued during 2026, announcing details of dividends and governance policies. Monitoring these developments is essential to understanding the company's trajectory and future plans.

To stay informed about the latest news regarding the Facilities Company and its listing developments, it is advisable to follow official financial sources such as the Tadawul Saudi website, Al Arabiya Economic Newspaper, and the Mubasher Financial website. Upon listing, financial performance data, share price, and trading volume will be periodically available through these platforms. One can also benefit from monitoring the performance of similar companies in the sector, such as Hill Cement Company (symbol 3001), to understand sector indicators and how the market reacts to news and financial reports. Regulatory authorities are keen to publish any disclosures or updates promptly, allowing investors to make informed decisions based on reliable information. However, consulting a licensed financial advisor remains an important step before making any investment decision.