Analysis: growth funded on the balance sheet, and a covenant note

Revenue rose by roughly 200 million riyals while net income fell by roughly 10 million. The reason is visible two statements away. Borrowings closed the half at 1,220,047,535 against 854,253,767 at 31 December 2025, made up of Murabaha facilities of 1,200,262,129 against 822,660,988 and conventional facilities of 19,785,406 against 31,592,779. Additions during the period were 924,652,519 against repayments of 558,592,919. Finance cost for the half was 45,714,764, and 45,980,596 of finance cost was paid.

Set that against net income of 55,653,050 for the same period. The group is carrying a financing charge close in size to its half year profit, on borrowings that grew by more than 40 per cent of their opening balance in six months. The statements explain why the borrowing is structured the way it is: the loans have bullet repayments with maturities ranging from 1 to 12 months, and are generally rolled over on maturity because of delay in collections from customers. During the period, loans of 142,704,327 were rolled over for another term. Rates carried on those loans are between 5.4% and 8.9%, against 3.7% to 8.8% in the prior year.

The disclosure that matters most is one sentence in the borrowings note. The group states that it is not in compliance with certain loan covenants, which could trigger immediate repayment of loans. The note does not identify which covenants, whether waivers have been sought, or what the lenders have said. The same note records that the loans are subject to financial ratios and restrictions on dividend declarations and are secured by promissory notes and the assignment of certain contract proceeds. Total facilities available stood at 5,194,715,668 against 2,067,265,843, with 2,885,917,690 utilised and 2,308,797,978 unutilised, and the unutilised portion maturing between July 2026 and July 2027.

The balance sheet shows the same growth pattern. Total assets reached 3,850,098,239 at 30 June 2026 against 2,990,094,413 at the end of 2025, and total liabilities 3,472,345,718 against 2,644,335,307. Shareholders’ equity at the end of 2025 was 345,759,106, down from 420,725,511 a year earlier, with retained earnings of 37,507,403 against 109,417,252. A company adding assets at that pace over six months on an equity base of that size is financing the expansion from lenders and from customer contract terms, not from retained profit.

That is the specific question these accounts put. Revenue for the half already stands at 910,083,628 against full-year 2025 revenue of 1,272,388,329, so the growth is real and concentrated in data centre work. Whether it converts into cash on a schedule the covenant package can absorb is what the borrowings note leaves open, and the next set of statements is where a reader would look for the answer.

Zakat for the half was 2,008,913 against 3,163,542, and the group has filed zakat returns with ZATCA for all years up to 31 December 2025.

What the documents say

Al Moammar Information Systems Company (Riyadh CR: 1010063470), the Saudi joint stock company that trades on the Saudi Exchange as MIS, reported revenue of 910,083,628 for the six months ended 30 June 2026, against 709,832,204 a year earlier. Net income fell to 55,653,050 from 66,128,084. All amounts are in Saudi riyals. The company published key financial performance highlights on August 6, 2026 alongside its interim condensed consolidated financial statements.

Revenue up, earnings down

The second quarter carried the growth. Quarterly revenue was 595,185,071 against 304,228,429, and quarterly net income was 43,516,361 against 32,280,828. Basic and diluted earnings per share for the quarter were 1.45 against 1.08, on a weighted average of 30,000,000 ordinary shares. For the half, earnings per share were 1.86 against 2.20, because the first quarter of the prior year had carried a larger share of that year’s profit.

The company attributes the revenue increase to the recognition of revenue from the Humain Data Centre and SDCF Phase 2 projects, and notes that contract assets rose alongside it. The disaggregation makes the shift visible. Services transferred over time produced 661,051,516 for the half against 464,461,524, while products transferred at a point in time were almost flat at 249,032,112 against 245,370,680.

The customer mix moved further. Revenue from government and government-controlled entities was 701,809,562 against 292,273,745, while private sector revenue fell to 208,274,066 from 417,558,459. By product, equipment and hardware produced 646,291,530 against 507,796,650, maintenance services 230,538,603 against 182,080,560 and software licences 33,253,495 against 19,954,994. Revenue booked as principal was 850,875,161 against 668,374,124, with 59,208,467 booked as agent against 41,458,080.

What the prior year looked like

The 2025 annual figures give the base. Revenue was 1,272,388,329 against 1,212,982,515 in 2024, gross profit 298,258,645 against 257,767,654, and operating profit 76,804,719 against 120,979,442, after impairment losses on trade receivables and contract assets and higher general and administrative expenses of 142,086,170 against 114,042,745. Finance costs were 86,978,724 against 83,473,651. The year also carried a gain from fair value changes of investments at fair value through profit or loss of 90,511,790 against 12,840,025.

Share capital has been 300,000,000 since 2023, having risen from 250,000,000 in 2022 and 200,000,000 in 2021. Total assets have grown from 1,147,799,674 in 2020 to 2,990,094,413 at the end of 2025.

The reporting obligation

Interim statements are disclosed under Article 66 of the Rules on the Offer of Securities and Continuing Obligations, which requires an issuer to prepare them under the standards adopted by SOCPA and disclose them to the public within a period not exceeding 30 days after the end of the period covered, after board approval and signature by an authorised director, the chief executive and the chief financial officer.

Separately, Article 64 requires disclosure without delay of any material development in the issuer’s sphere of activity that is not public knowledge and that may affect its assets and liabilities, financial position or general course of business. Article 65 lists events requiring immediate disclosure regardless of materiality, among them any debt outside the ordinary course of business of a value equal to or greater than 10% of net assets, and any significant change in the issuer’s production environment or activity.

The company was registered in Riyadh under commercial registration number 1010063470 dated 10 Muharram 1407H, corresponding to 15 September 1986.