National Shipping Company of Saudi Arabia (Bahri) - Q1 FY2026 Earnings Analysis

Performance Highlights

Bahri delivered an exceptional first quarter, with revenue of SAR 4.96 billion rising 129% year-on-year and net profit of SAR 2.15 billion surging 303%, well ahead of prior-year comparisons, as EBITDA margin expanded 2 percentage points to 57%. EPS climbed to SAR 2.33 from SAR 0.58, while free cash flow swung from an outflow of SAR 1.20 billion to a SAR 1.28 billion inflow, reflecting the step-change in earnings quality.

The single most important driver was Bahri Oil, where revenue rose 241% to SAR 3.74 billion and EBITDA grew 253% to SAR 2.12 billion, fuelled by higher VLCC freight rates, the expanded 50-vessel owned fleet, and aggressive charter-in activity to capture elevated demand following Strait of Hormuz disruptions. Bahri Chemicals & Products reinforced group results with EBITDA up 42% and margin expanding 13 percentage points to 64%, while Dry Bulk improved EBITDA margin to 42% through disciplined basin positioning; Integrated Logistics was the lone drag, with EBITDA declining 35% partly due to a SAR 21 million one-off gain in the base period.

Management Outlook and Forward Catalysts

Management framed Q2 2026 as an environment of continued high volatility, with near-term performance heavily dependent on Strait of Hormuz developments, while reaffirming strategic priorities of fleet growth through 10 newbuild deliveries spanning 2026 to 2029, cargo mix optimisation toward higher-margin CPP, and expansion of the integrated logistics platform including Jeddah bonded zone and offshore support vessel additions. These signals position Bahri as entering a sustained investment and diversification phase underpinned by strong cash generation.

The central investor debate centres on whether elevated VLCC freight rates are sustained or mean-revert as geopolitical risk premiums unwind, and whether Bahri can maintain 57% EBITDA margins once charter-in costs rise in a normalising market; bulls point to the 10-vessel orderbook, renewed COAs with Luberef, SABIC, and Mitsui, and a net debt-to-EBITDA of just 1.14x as structural supports, while bears will watch for freight rate compression and Integrated Logistics margin recovery.