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Following the announcement by SAL Saudi Logistics Services Company (“SAL”, “Company”), the market leading cargo handling player and growing logistics solutions business in Saudi Arabia (“KSA” or “Saudi Arabia”), on 12 September 2023G of its intention to proceed with an initial public offering of 30% of its share capital, the Company announces today the price range for the initial public offering (the “IPO” or the “Offering”) as well as the commencement of the participating parties’ bidding and book-building period. The approved prospectus containing the full details of the Offering has been published on 12 September 2023G. The price at which all subscribers in the Offering will purchase Shares will be determined at the end of the book-building period.
For more information about the IPO, please visit: www.sal.sa/en/ipo
The Offering is restricted to the following two groups of investors:
Tranche (A): Participating Parties:
– Tranche (B): Individual Investors:
Book-building and Subscription Procedures for Participating Parties:
Subscription Procedures for Individual Subscribers:
Timeline of the Offering:
|Key Events||Date (Gregorian)||Date (Hijri)|
|Bidding and Book-Building Period for Participating Parties||25/09/2023G – 01/10/2023G 2PM KSA||10/03/1445H – 16/03/1445H 2PM KSA|
|Subscription Period for Individual Investors Based on Final Offer Price||11/10/2023G – 13/10/2023G 11:59PM KSA||26/03/1445H – 28/03/1445H 11:59PM KSA|
|Announcement of final allocation of Offer Shares||No later than 17/10/2023G||No later than 02/04/1445H|
|Refund of excess subscription amounts (if any)||No later than 24/10/2023G||No later than 09/04/1445H|
|Expected start date of trading on the Saudi Exchange||Trading of the Offer Shares on the Exchange is expected to commence after all relevant legal requirements and procedures have been fulfilled. Trading will be announced in local newspapers and on the Saudi Exchange website (www.saudiexchange.com)|
SAL is a world class cargo handling and logistics player in Saudi Arabia that is catalyzing the Kingdom’s transformation into a more diversified economy connected to global markets through corporate networks and increasing flows of goods.
The company operates across four different verticals; cargo handling, logistics solutions, passenger handling, and fulfilment, offering a broad spectrum of value-added services, covering 18 airports across the Kingdom – including the 4 major airports Riyadh, Jeddah, Medina, and Dammam – with 139k sqm of cargo terminal area.
In 2022G, its cargo handling business line contributed c.87% to total revenue, with the company handling 722k tonnes of cargo and retaining its position as the undisputed market leader in Saudi Arabia with a c.95% market share. SAL’s global logistics solutions business was launched in late 2021G and covers end-to-end solutions (for sea, air, and land freight), special projects, customs clearance, and warehousing. In 2022G, the business has delivered 7,000+ services for 30+ customers, across a variety of sectors including government/semi-government entities, entertainment and cultural events, and automotive, OEM and aerospace/aviation sectors.
SAL’s foothold across key airports in the Kingdom provides an attractive opportunity to expand its services into fulfilment, and passenger handling of low-cost carriers. Under passenger handling, SAL was granted an economic license to provide passenger handling services in KSA in December 2022G, and partnered with Menzies Aviation, the world’s largest aviation services company. All these factors make it well-positioned to capitalize on the growth of the Kingdom’s passenger ground services market, which is expected to experience a CAGR of 11.3%, increasing from 67 million passengers in 2022G to 158 million passengers in 2030G according to independent analysts, or c.330 million passengers by 2030G according to the Government’s Vision 2030 projections.
Financially, SAL holds a stellar track record with consistent growth trajectory and market-leading profitability. In the first half of 2023G, SAL recorded a YoY growth of 15.1% and 26.7% in revenue and net income respectively. Its EBITDA grew by 24.5% YoY, with margin improving to 47%. Moreover, due to the high cashflow generative business, the company’s capex is self-funded, and SAL was able to issue dividends amounting to SAR70m in the first quarter of 2023G, in addition to the dividends of SAR100m and SAR255m paid in FY21 and FY22 respectively.
Historically, SAL has performed consistently well with a revenue CAGR of c.20% over the period FY20-FY22. It also maintained strong EBITDA growth of c.15% CAGR over the period FY20-FY22 and achieved 45% margin in FY22. Net income margins have remained relatively steady, increasing from 28% in FY20 to 30% in FY22, while net debt reduced from 2.8x EBITDA to 1.7x at end of FY22.