Saudi listed companies invested more than SR177 billion (around $47 billion) in 2020 on their Capital Expenditure (CAPEX), which was equivalent to 7% of Saudi’s GDP last year, according to a first-of-its-kind research in the region.

Capital spending by leading Saudi listed companies is expected to significantly pick up in the coming years, in line with the expected acceleration of economic growth and the investments in new sectors and flagship projects, such as Neom, the Red Sea Project, and others.

According to the ground-breaking research by Awalan, the leading portal powered by Al-Iktissad Wal-Aamal, capital expenditures were maintained by Saudi listed companies, despite the challenges of COVID-19. The drive is consistent with the Kingdom’s Vision 2030, and aims to leverage opportunities offered by the country to diversify its economy away from oil.

>

"Awalan" started to monitor capital expenditures by Arab listed companies to provide indicators on market trends and to gauge business sentiment and identify the long-term plans of the corporate sector in the Gulf and other Arab markets.

The report also showed that the Saudi listed companies paid their shareholders around SR 330 billion in cash dividend during 2020. This trend will start to taper in the next two years (2021 and 2022), by introducing a partnering scheme between PIF and Saudi companies. More companies will be encouraged to allocate more of their profits to investments in significant projects, such as those launched as part of the Kingdom's Vision 2030. Subsequently, this will raise the Saudi private sector's share of GDP from 45% in 2016 to 65% by 2030.

Also revealed in the report is a decline of more than 14% in the 2020 capital expenditure, due to the economic contraction and the disruption of the supply chain. The slump in CAPEX affected companies in the hardest-hit sectors, such as energy, entertainment, real estate development, consumer services, durables, tourism, and media. In contrast, leading companies from other sectors such as the telecom, banking and insurance, transportation, and public services sectors increased their capital spending.

Aramco led Saudi listed companies in CAPEX as it spent more than SR 101 billion in 2020, followed by Saudi Electricity Company (SEC), which boasted a CAPEX of SR 23 billion. Sabic came third with SR 15 billion. Telecom companies managed to invest a sizeable CAPEX in 2020; for example, STC led the investments with more than SR9 billion on capital projects last year, representing about 65% of the sector’s CAPEX.

Saudi National Bank topped the list in the banking sector with a CAPEX of about SAR 1.1 billion, which represents 21% of the total investment spending in the banking sector. Sulaiman Al Habib Group was the biggest spender in the healthcare sector with a CAPEX of SAR 758 million in 2020, constituting 42% of the sector’s CAPEX. Jabal Omar topped the real estate sector’s investment with a CAPEX of SAR 356 million, or 31%.  Finally, Almarai led the food sector with a CAPEX of SAR 944 million, or 49%.

>

>

>

-Ends-

For media enquiries please contact:
Borouj Consulting
Randa Mazzawi or Rosie Azzi
+971 4 3403005
Randa@boroujconsulting.com
Rosie@boroujconsulting.com 

Send us your press releases to pressrelease.zawya@refinitiv.com

© Press Release 2021

Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.

The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.

To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.