Leejam Sports H1 2026 Net Profit Falls 22% Despite Revenue Growth
Leejam Sports Company (1830) announced its H1 2026 financial results, with net profit declining 21.7% YoY to SAR 112 million, while revenue grew 4.8% to SAR 780 million. The profit drop was mainly due to margin pressure and higher finance costs.
Key Numbers
Leejam Sports Company (1830) reported its interim financial results for the six months ended June 30, 2026, showing a 21.7% year-on-year decline in net profit to SAR 112 million, while revenue increased 4.8% to SAR 780 million. The profit decline was primarily attributed to gross margin contraction and higher financing costs.
Key Financial Results
| Metric | H1 2026 | H1 2025 | Change |
|---|---|---|---|
| Revenue | SAR 780M | SAR 744M | +4.8% |
| Net Profit (attributable) | SAR 112M | SAR 143M | -21.7% |
| Gross Profit Margin | 33.2% | 35.5% | -2.3 ppts |
Key Highlights from the Statement
The company attributed the net profit decline to several factors:
- Gross profit margin contracted by 2.3 percentage points to 33.2%, impacted by new fitness centers still in their maturation phase.
- Non-recurring gain of SAR 11.5 million recognized in H1 2025 from reversal of impairment was not repeated.
- Finance costs increased 29% due to higher average borrowings and increased lease liabilities.
- General, administrative and selling expenses rose 8%.
Partially offsetting these headwinds were the 5% revenue growth, absence of associate losses (SAR 4.6 million in H1 2025), and higher profit from short-term Murabaha.
Guidance
The company did not provide specific forward guidance in the announcement.
Impact on the Stock
The weaker-than-expected profitability is likely to pressure Leejam Sports' stock (1830) in the near term, given ongoing cost pressures. However, sustained revenue growth and network expansion may support long-term confidence.
What This Means for Investors
The results indicate an investment phase as the company opens new centers, temporarily impacting profitability. Investors should monitor margin trends and the pace at which new centers mature to assess return on investment.
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