Promising growth Prospects for the Saudi Education Sector –Al-Jazira Capital Forecast

The Kingdom of Saudi Arabia’s education sector is rapidly developing, and has a lot of room for furthermore expansion, “Maaal” quoted Al-Jaizra Capital report.

As it has strong fundamentals, as proven by the Saudi government’s recent focus on strengthening the education system through pumping huge investments, in the industry.

Aside from the predicted big growth for educational demand, it is also as a result of the large number of young people.

In addition, rising demand for international curricula has enhanced support for parents’ shift to private education, and optimism about the sector’s prospects has risen due to the government’s stimulus for private sector engagement, in the Kingdom Vision 2030 initiative.

The report predicted that Ataa Company’s profits would fall to SR29.7 million at the end of this year, down from SR75.8 million in 2020, before rising to SR87 million by the end of 2022, with a growth rate of 192.8 %, and a sum of SR106 million, in 2023, with a growth rate of 22 %.

A decrease in the profits of the tender company to SR29.7 million by the end of this year, it expected.

The percentage of the decrease predicted to move up to 60.8% compared to its profits in the Year 2020, which was SR75.8 million.

Then it would jump to SR87 million by the end of 2022, with a growth rate of 192.8%. And it would rise to SR106 million, at a rate of 22% in 2023.

According to “Al-Jazira Capital”, the profits of the National Education Company would decline to SR29.6 million by the end of this year, a 48.9% rate of slump from the profits of the Year 2020, which was SR57.8 million, before rising to SR48.4 million in 2022 and reaching SR68.8 million in the following Year 2023.

On the other hand, the Gulf Training Company’s profits would rise to SR22.4 million by the end of this year, up from 108% the previous year’s SR10.7 million, and then to SR52.3 million in 2022, or up 134%, and then to SR70.2 million in 2023.

In the Kingdom of Saudi Arabia, the public education was the norm. But, the demand for private education, nowadays, has surged by 100% as consumer preferences changed and the education industry became more open to international investment.

In addition, the growing demand for international curricula has aided parents’ migration to private education.

With the government’s backing for the private sector’s engagement in the Saudi Vision 2030 initiative, sentiment regarding the sector’s potential has also risen.

The new regulatory criteria under “The Tadraj” system offer a chance to increase business with larger private education companies.

Mergers and acquisitions are used to accomplish this.

Small-size businesses that couldn’t afford to comply with the new regulations, were targeted. The education industry was reversely impacted in 2020 by the rampant Coronavirus pandemic, as educational institutions were forced to shift to remote education and give fee concessions, putting a strain on their financial resources.

In general, the return to schooling as usual, would begin gradually beginning in September 2021, with fees projected to revert to pre-pandemic levels.

Together, these factors indicate that the sector is ready to recover, in the 2021-2022 school Year.