SAL Saudi Logistics to Sell 30% Stake via IPO on Tadawul Next Month

The IPO boom in the GCC region continues unabated with another Saudi company planning to get enlisted on Saudi main market Tadawul.

Saudi Logistics Services Co has announced its plans to offer 24 million shares representing 30% of its capital valued $213.28 million through an initial public offering (IPO) on the Saudi main market Tadawul.

In a filing with Tadawul, the company, said that the Capital Market Authority (CMA) approved SAL Logistics’ request for listing on June 21 this year. The shares will be traded in the second week of October.

According to the filing, participating parties include those entitled to participate in the book-building process. The number of shares allocated to this category is 24 million, or 100% of the total offer shares. In case of strong retail demand, the allocation to this category would decrease to a minimum of 21.6 million, or 90% of the offering’s total shares.

Retail investors include Saudi legal persons and non-Saudi legal residents in the Kingdom, as well as GCC nationals who have a bank account with the receiving banks and have the right to open an investment account with a financial institution. A maximum of 2.4 million shares, or 10% of the total offer, will be allocated to this category.

Participating parties entitled to participate in the book-building process will register from Sept. 25-Oct. 1. However, retail investors’ subscription will run for three days from Oct. 11 to 13.

SAL Logistics was spun off from Saudi Airlines Cargo Co. (SACC) and became an independent entity in December 2019.

Biggest Cargo Handler

SAL is the biggest cargo handling firm in Saudi Arabia, with a 99% market share and provides transit and export shipments across 18 airports including the four international airports of Riyadh, Jeddah, Medina, and Dammam.

SAL’s cargo handling client base is made up of mainly blue-chip cargo airlines, including Saudi Airlines Catering Company (SACC). The client relationships were formalised through long and medium-term contracts with terms ranging from one to 10 years.

Strong Revenue

The logistics company reported revenue of $325 million in 2022 and net income of $96.51 million. Its half-year revenue surged by 15% year-on-year while its earnings before interest, taxes, depreciation, and amortisation (EBITDA) grew by 24.5% Y-o-Y.

SAL has allotted capital expenditure (CAPEX) of more than $400 million to cater to the expected growth in cargo handling demand through 2030. The company has already invested $159.96 million with a further $241.54 million to be invested over the medium-term.

The firm is well-positioned to capitalise on the growth of Saudi Arabia’s passenger ground services market, which is expected to grow at a CAGR of 11.3% to 158 million passengers by 2030.

The company paid a dividend of $18.66 million for Q1 of 2023 and announced $18.66 million more as payout for the second quarter. SAL paid $26.66 million and $67.98 million dividends in 2021 and 2022, respectively.

In December 2022, the General Authority of Civil Aviation (GACA) licensed SAL to provide ground services at the Kingdom’s airports. Under the license, SAL will provide ground services, baggage and freight handling, passenger services, and aircraft towing.

Managing Director and CEO of SAL, Faisal Al-Baddah, said that the license underpinned the company’s expertise, success, and track record in the industry, in addition to its efforts to boost the sector’s role in the gross domestic product (GDP) in line with Saudi Vision 2030.