Emaar The Economic City narrowed its second-quarter net loss to SAR22 million, helped by higher revenue, lower financing costs and gains from property disposals as the developer continues restructuring its balance sheet and operations. The loss attributable to shareholders for the three months ended June 30 compared with SAR93 million in the same quarter of 2025, marking a 76% improvement. Revenue rose 7.6% to SAR127 million from SAR118 million, driven mainly by city operations and higher student enrolment in the group’s education business.
The improvement came despite weaker hospitality and leisure income caused by lower occupancy and a slight decline in sales of residential land and units. Gross losses narrowed to SAR5 million from SAR19 million, while the company recorded an operating profit of SAR66 million compared with an operating loss of SAR124 million a year earlier.
Compared with the first quarter of 2026, the performance also improved sharply at the bottom line. EEC had recorded a SAR180 million net loss in the January-March period. Second-quarter revenue, however, was 19% lower than the SAR157 million generated in the first quarter as residential unit and land sales weakened and operating income from city services and education declined sequentially.
Lower operating expenses contributed to the year-on-year improvement. Professional charges declined, with the comparable quarter in 2025 having included higher fees linked to debt restructuring. Financing charges fell by SAR72 million following the restructuring of long-term commercial debt at lower interest rates and the conversion of shareholder debt into equity during 2025.
Other operating income increased by SAR173 million, primarily because of a gain from the sale of investment property. The company also recorded a smaller share of losses from an equity-accounted investment. The comparable period had included a SAR49 million adjustment related to damage caused by a fire at a project in June 2025.
Those gains were partly offset by higher expected credit-loss provisions and the absence of a major one-off benefit booked a year earlier. The second quarter of 2025 included a SAR243 million gain from extinguishing debt after the company completed a bank-debt restructuring at lower interest rates. EEC’s expected credit-loss provision increased by SAR15 million during the latest quarter.
For the first half of 2026, EEC reported a net loss of SAR203 million, 6% narrower than the SAR216 million loss recorded in the corresponding period last year. Six-month revenue declined nearly 12% to SAR284 million from SAR322 million as property-development projects that had generated revenue under percentage-of-completion accounting were completed and delivered during 2025.
Operational revenue provided some support, rising 27% during the first half on stronger income from city operations and education. Financial charges fell by SAR153 million, while other operating income increased by SAR158 million, primarily reflecting investment-property disposals. Shareholders’ equity stood at SAR9.08 billion, about 80% above the year-earlier level, while the loss per share narrowed to SAR0.23 from SAR0.41.
EEC nevertheless continues to face liquidity and profitability pressures. The group reported a net operating cash-flow deficit of SAR150 million for the six months, compared with SAR174 million a year earlier. Current liabilities exceeded current assets by SAR457 million at the end of June, reversing the position at December 2025, when current assets exceeded current liabilities by SAR134 million. Its auditor highlighted material uncertainty over the group’s ability to continue as a going concern, while issuing an unmodified conclusion.
The company is the master developer of King Abdullah Economic City, a 185 million-square-metre development on the Red Sea coast north of Jeddah. The project combines residential development with logistics, manufacturing, tourism, education and commercial activities, with King Abdullah Port serving as a major component of its industrial and transport infrastructure.
Public Investment Fund initially acquired a 25% holding in EEC in 2021 through a transaction involving the conversion of SAR2.8 billion of debt into equity. Its influence increased substantially after shareholders approved another debt conversion in December 2025, raising EEC’s capital from SAR5.23 billion to SAR8.83 billion through the issuance of about 359.7 million new shares against more than SAR4.1 billion owed to PIF.
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