Al Hammadi Holding to receive SAR 80m compensation over partial land expropriation

ALHAMMADI
4007 -0.36% 27.64 -0.10

Riyadh – Mubasher: Al Hammadi Holding Company, a prominent healthcare provider listed on the Saudi Exchange (Tadawul), has announced a significant update regarding its recently acquired land in Riyadh’s Al Mounisiyah district.

Following a decision by the Royal Commission for Riyadh City, a portion of the property has been expropriated for public utility as part of the city’s major road development projects.

The company confirmed it will receive financial compensation totaling SAR 79.76 million, resulting in a non-recurring capital gain of approximately SAR 7 million.

The disclosure follows Al Hammadi’s initial announcement on 5 November 2024 regarding the acquisition of a 24,482 square meter land parcel located at the intersection of Sheikh Jaber Al Sabah Road and Thumamah Road.

The site was originally purchased for SAR 171.37 million, excluding real estate transaction taxes and brokerage fees, with the strategic intent of constructing a new hospital facility.

After accounting for capitalized costs, including the real estate transaction tax and commission, the total book value of the land in the company’s records stood at SAR 184.25 million.

The Royal Commission for Riyadh City has issued survey decisions and notices stating that a portion of the land is required for the development of the capital’s ring roads and main axes projects. Under the Law of Expropriation of Real Estate for Public Benefit (Royal Decree No. M/15), the authorities have designated 9,669 square meters of the property for expropriation.

From a financial perspective, Al Hammadi Holding detailed the impact of this regulatory action on its balance sheet. The book value of the specific portion being expropriated is calculated at SAR 72.76 million.

Given that the compensation due from the Royal Commission amounts to SAR 79.75 million, the transaction will result in a non-recurring profit of SAR 6.99 million. The company noted that this financial impact will be recognized in its financial statements in accordance with International Financial Reporting Standards (IFRS).

Operationally, the reduction in land size necessitates a re-evaluation of the company’s development plans for the proposed hospital.

Al Hammadi is currently reviewing the engineering, organizational, and master plans to accommodate the changes resulting from the loss of nearly 40% of the original land area. The management is assessing whether these adjustments will lead to material changes in the project’s total costs or the previously anticipated execution timeline.

At the end of March 2026, the group’s net profits attributable to the shareholders dropped by 23.92% to SAR 56.24 million from SAR 73.93 million a year earlier.

Source: Mubasher Source: {{details.article.source}}