Jabal Omar Hotels Drive Recovery

Jabal Omar Company recorded a significant increase in revenues during the second quarter of 2026, rising by 43% year-over-year to approximately 715 million riyals. The company shifted from a loss to a net profit of 158 million riyals. This strong performance was driven mainly by the hotels, which achieved nearly 50% year-over-year growth supported by the Hajj season, improved pricing, and the start-up of the Rove Hotel. These factors contributed to an occupancy rate exceeding 65%, an average daily rate of 1,377 riyals, and an increase in revenue per room to 902 riyals. Additionally, nearly equal contributions from higher occupancy and higher prices helped boost overall revenue. The results also showed improvements in operating cash flows, although net profit has not yet reflected sustainable profitability levels due to non-operational factors such as reduced provisions for deteriorated assets and lower financing costs. On the other hand, shopping malls did not exhibit the same growth; revenue per square meter declined despite an increase in leased space, indicating that performance improvement requires enhanced productivity and converting new occupancy into stable rental income. It is expected that ending the capital expenditure cycle—while reducing annual spending to around 365 million riyals—will help improve the financial position by lowering debt levels and increasing steady cash flows. The company will continue delivering new asset components in the second half of 2026, although the impact on profits will take time to become fully evident.

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