18. Borrowings

Long-term borrowings comprise of the following:

Currency denomination of the borrowings in Saudi Riyals equivalent is as follows:

On August 19, 2021, the Company entered into an Islamic loan agreement under Murabaha arrangement. The agreement involved a loan syndication of Saudi Riyals 1,687.5 million from five local banks. In addition, USD 150 million (equivalent of Saudi Riyals 562.5 million) from a commercial bank. The principal repayments began from June 30, 2022 and will continue on an agreed semi-annual installment basis till June 30, 2029. These facilities bear finance costs at market rates, which are generally based on Saudi Inter Bank Offered Rate (“SIBOR”) for Saudi Riyals denominated borrowings and on Term Secured Overnight Financing Rate (“Term SOFR”) for USD denominated borrowings. The spread during the year ended December 31, 2025, on these facilities varied between 0.9% and 1.25% (December 31, 2024: 0.75% and 1.25% per annum). Moreover, there is no collateral on the Company’s assets due to these long-term borrowing agreements.

The above long-term borrowing agreements contain certain covenants, which among other things, require the Company to maintain annually net debt to equity and certain other financial ratios. As at and during the year ended December 31, 2025, and 2024, the Company was compliant with all the covenants with the lenders.

1 As at December 31, 2025 and 2024 the Company does not have any potential ordinary shares.

As at December 31, 2025, the Company has two Islamic credit facilities from local commercial banks for managing its working capital amounting to Saudi Riyals 345 million (December 31, 2024: Saudi Riyals 415 million). There are no financial covenants applicable to the Company under such facilities with the respective bank. The facilities are unsecured. The maturity of the Islamic credit facilities are within twelve months. Total unused credit facilities available to the Company as at December 31, 2025 is Saudi Riyals 345 million (December 31, 2024: Saudi Riyals 415 million).

Fair value of long-term borrowings is approximately equal to their carrying amounts as they are subject to variable interest at market rates. Finance costs recognised as expense on the above borrowings have been disclosed in Note 30.

The Company’s main interest rate risk arises from borrowings with variable rates, which expose the Company to cash flow interest rate risk. During the year ended December 31, 2025 and 2024, the Company’s borrowings at variable Murabaha profit rates were mainly denominated in Saudi Riyals and USD.

The breakdown of the aggregate maturities of borrowings is as follows: