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Saudi equity research · Tadawul Main Market & Nomu
Abdulla Ismaeel · updated 24 September 2026
Research › Mills

Saudi flour milling: four companies, one price, FY2018 to FY2025

Tadawul Main Market · FY2018 to FY2025 · 4 of 4 listed millers · IFRS-KSA

Four companies, one supplier, and one price for most of what they sell. The Kingdom sets what the mills pay for wheat and what the flour leaves at, so the margin on the core product is a policy rather than a performance, and the operating results duly cluster. What separates the four between FY2018 and FY2025 is the price each buyer paid when the state sold the company. Strip it out and the order inverts.

Total revenues
SAR 3.9B
FY2025, the whole cohort
EBITDA margin
35.8%
before capital charges
See the workings
Net profit margin
24.4%
per riyal of sales
See the workings
Free cash flow
SAR 958M
after capital spending

Source FY2025 audited financial statements, restated in the modelWorkings data appendixUpdated 24 September 2026

How the industry works

  1. 1
    The input

    Procurement and the state subsidy

    Unlike almost any other agricultural business, a Saudi miller carries no crop risk and buys nothing on a commodity market. The General Food Security Authority buys the wheat, internationally or from local farmers, holds it, and then allocates and sells it to the four licensed millers at one flat subsidized rate, SAR 180 a ton under the pricing policy in force. The quantity is an allocation rather than a sale won, and the price is a policy rather than a negotiation.

    3.15183.26193.38203.50213.41223.55233.68243.8225
    Million tons allocated to the four millers. Sourced rather than model output, and on a different basis from the tonnage the companies report milling.
    GFSA allocationSubsidized wheat

    Wheat on the ground, at a price nobody here negotiated. Nothing has been milled.

  2. 2
    The capacity

    Storage and core milling operations

    The allocated wheat arrives at regional facilities and goes into silos, which buffer an allocation that arrives in shipments against a mill that runs every day. The silos are licensed along with the mill, and what a miller holds is working storage rather than a national reserve: the strategic stock stays with the state, which keeps several times the four companies' combined capacity. First Mills holds the most of it and is the only one of the four to have added any. The other three carry the figure they carried in 2018, and Fourth Mills, holding the least, is not the shortest of cover.

    Silo storage, FY2025
    • First Mills49 days of cover 250K t
    • Modern Mills39 days of cover 185K t
    • Arabian Mills41 days of cover 202K t
    • Fourth Mills43 days of cover 150K t

    Bars to the largest silo here. Storage has no natural ceiling; days of cover does the comparing.

    SilosRoller mills

    The wheat is under cover and the mills are turning. What comes out of them has not been separated yet.

  3. 3
    The product mix

    Bifurcation into flour and feed

    Milling does not convert wheat, it separates it. One input leaves as two commercially unrelated streams: flour, graded by refinement into patent, bakery, whole wheat and specialty grades, and bran, the outer hull of the grain. The ratio between them is a product specification rather than a decision, which is why Modern Mills and Arabian Mills split the ton to the same point and First Mills lands a few points below both, disclosing less flour and bran than its wheat capacity implies. Fourth Mills does not disclose the split at all.

    One ton, separated, FY2025
    • First Mills5,150 t a day milled 71%
    • Modern Mills4,700 t a day milled 75%
    • Arabian Mills4,920 t a day milled 75%
    • Fourth Millssplit not disclosed –
    FlourBran

    Share of daily wheat capacity. The percentage is the flour half, the priced one.

    This is the core margin driver of the sector, because the two halves are priced by different people: basic flour is capped to protect food security, and the feed is sold at market rates. So the only real choice at this stage is how much of the ton a company has built the capacity to push into feed, and it is the one place in the core operation where the four visibly diverge. Modern Mills has committed the most of its throughput to it and First Mills is close behind, while Arabian Mills has built under half of that, the smallest feed line of the four, and Fourth Mills sits at much the same level.

    Feed line, share of wheat capacity, FY2025
    • First Mills1,350 t a day 26%
    • Modern Mills1,400 t a day 30%
    • Arabian Mills600 t a day 12%
    • Fourth Mills450 t a day 13%

    Bran milled again into feed and sold at market rates. This is the choice, and it is the one place the four separate.

    Flour extractionBran and feed

    Two products, two markets, and only one of them has its price set for it.

  4. 4
    The pricing power

    Brands and the value-add

    Because bulk regulated flour is priced for them, margin expansion has to be bought somewhere else, and that somewhere is the pack. Output divides into bulk sizes for industrial bakeries and corporate clients, and premium retail packs for households. The first is the volume and carries the administered price; the second sits outside the scheme entirely and is priced by whoever makes it, which is the closest thing to pricing power any of these companies has. Arabian Mills leans on it hardest of the four and First Mills least.

    Sales by channel, FY2025
    • First Mills18% retail 82%
    • Modern Mills20% retail 80%
    • Arabian Mills24% retail 76%
    • Fourth Mills22% retail 78%
    B2B bulkB2C retail

    Approximate, and a share of each company's own sales rather than of the four.

    That is also why the consumer brand matters here in a way it would not in a commodity manufacturer. Valuation growth comes from non-subsidized, higher-margin lines carrying a name: pasta, gluten-free products, pre-made bakery mixes and specialized animal nutrition. All four have built at least one. First Mills and Arabian Mills have built a second, which is the split worth reading in the table: a corporate name for the bulk trade, and a separate one for the shelf, where the price is theirs to set. It is also the only asset anywhere in this sequence that the state has no view on at all.

    Consumer brands
    CompanyKey commercial brands
    First MillsFirst Mills, Aloula
    Arabian MillsFinah, Kamil
    Modern MillsModern Mills
    Fourth MillsMC4

    Two of the four run a second brand to carry the premium end away from the corporate one.

    B2B bulkB2C retail

    A branded pack, priced by whoever makes it. It still has to reach a shelf.

  5. 5
    The live market

    Last-mile logistics and distribution

    Only at the final stage does any of it become money. Finished product goes out on large freight fleets to hypermarkets, bakeries, hotels, restaurants and catering clients across the Kingdom, and it cannot leave: exporting is prohibited unless the company repays the subsidy on that batch of wheat. Growth is therefore domestic share, and on the one measure the disclosures support, First Mills, Modern Mills and Arabian Mills land within a tenth of one another, and Fourth Mills does not report it at all. Nobody here has share power either, only volume.

    Tons milled, FY2025
    • First Millswheat milled 1.6M
    • Modern Millswheat milled 1.6M
    • Arabian Millswheat milled 1.5M
    • Fourth Millsnot reported –

    Bars to the largest reported. Not shares: one company does not report the figure, and a share would have given its tons to the other three.

    Freight fleetHORECA and retail

    Flour sold and paid for almost at once. The only door out of the Kingdom has a toll on it.

How they make money

Every bar below is that company’s share of everything the four sell through that door. Read down a door and the bars add to a whole; read across a company and they do not, because the doors are different sizes.

  1. Where the volume is

    Regulated flour

    The flour door is much the biggest of the three, about SAR 2.2B across the four, and the one where nobody has taken anything from anyone. Every company's share sits within three points of its share of the Kingdom's milling capacity, and First Mills leads it because it has the largest mill. You hold the share your plant entitles you to, and there is no mechanism by which any of them could hold more.

    Share of the flour door, FY2025
    • First MillsSAR 688M 31.2%
    • Modern MillsSAR 525M 23.8%
    • Arabian MillsSAR 577M 26.1%
    • Fourth MillsSAR 416M 18.9%
  2. Where the competition is

    Bran and feed

    Bran tracks the mill closer still: the four sit within two points of their milling shares, on a door worth less than a fifth of the flour beside it. Bran is a physical consequence of milling to a specification, so the quantity arrives whether anyone wants it or not. Fourth Mills holds meaningfully more of this door than of the plant, by about two points, and that is the whole of the variation.

    Share of the bran door, FY2025
    • First MillsSAR 115M 28.1%
    • Modern MillsSAR 105M 25.8%
    • Arabian MillsSAR 102M 25.0%
    • Fourth MillsSAR 85.8M 21.1%

    Feed is where the bars come apart from the plant, and it is the only one of the three doors sold at a price the company negotiates. Modern Mills holds a third of it, eight points more than its share of the Kingdom's milling capacity, and Fourth Mills an eighth, six points less than its plant implies. Share here is won rather than granted, which the other two doors could not show. Arabian Mills is the one to look at twice: about a quarter of the door on roughly a sixth of the cohort's feed capacity, so either it buys feedstock in or its disclosed capacity understates the line. It cuts both ways: this is the one stream a commodity market can move against them.

    Share of the feed door, FY2025
    • First MillsSAR 344M 27.7%
    • Modern MillsSAR 420M 33.8%
    • Arabian MillsSAR 319M 25.7%
    • Fourth MillsSAR 158M 12.8%

    The only one of the three sold at a price the company negotiates.

  3. Where the growth is

    Beyond the allocation

    Everything that is neither regulated flour nor the by-product sits here: durum and semolina, bakery lines, and flour exported under license since November 2024. It is the only door where a Saudi miller can both set its own price and add its own volume, and it is very nearly empty. First Mills runs the cohort's only durum line, and even there it is a rounding error against the wheat beside it. Arabian Mills reports none at all; the other two do not report the line. Whatever growth is not a bigger mill has to come from this door, and on today's disclosure barely anyone has opened it.

    Durum capacity, FY2025
    • First Mills300 t a day 6%
    • Modern Millsnot reported –
    • Arabian Millsno durum line 0%
    • Fourth Millsnot reported –

    Share of the company’s own wheat capacity. The only line here that is neither allocated nor priced by the authority.

Each bar is that company’s share of everything the four sell through that door. Read down a door and the bars add to a whole; read across a company and they do not, because the doors are different sizes. That is what makes the comparison worth making: hold a company’s share of a door against its share of the Kingdom’s milling capacity, and in the two regulated streams they agree to within a couple of points, while in feed two of the four are a long way from where their plant would put them. The durum panel is the exception and is not on this basis, because two of the four do not report the line and a share would be a share of a total nobody has measured. The revenue figures are sourced rather than model output, and the build refuses to publish them unless the three streams still add back to the revenue the workbook reports.

Why utilization is the whole growth story

If the price is fixed and the allocation is granted, growth has to come from tons, and tons come from two places: more capacity, or more use of the capacity already standing.

All four now run their mills close to flat out, which is comfortable and awkward at once. Comfortable, because a plant near capacity spreads its fixed costs as thinly as they will go. Awkward, because the free growth is finished: from here more tons means more plant, and more plant means more invested capital measured against a margin that policy still sets. A miller adding capacity is not chasing a better price. It is buying the right to sell more units at the same one, and that only creates value while the granted margin holds.

Capacity utilization, FY2025
  • First Mills15 lines, 5 plants 94%
  • Modern Mills9 lines, 3 plants 92%
  • Arabian Mills11 lines, 3 plants 90%
  • Fourth Mills7 lines, 3 plants 98%

Bars are the share of the company's own plant actually used, so the track is 100%.

The share of its own plant each company actually used in FY2025, so the track is 100% and every bar is close to the end of it. That is the argument beside it in one picture: the cheap growth, filling a mill that was already standing, has very nearly been taken.

A cash business, until recently

The third lever is working capital, and there is almost none of it. These companies are paid on delivery: receivables have run at a few days of sales for most of this period, and in several years at less than one. A telecom operator in the same market waits four months.

That is what selling to an approved list at an administered price does. The buyer is cleared by the authority, the price is not in dispute, and the product is a staple on a fixed schedule. What the cash cycle does contain is wheat: inventory, not receivables, is the whole of it.

The line has started to move, though, and in all four at once. A change that arrives across a whole industry is rarely one company's collections problem. It is more likely a change in who the customer is, and there is a dated candidate. Exports opened in November 2024, and small retail packs sit outside the price scheme altogether. Selling to a distributor or an overseas buyer means selling on terms. Selling to an approved bakery did not.

Days of sales outstanding for each company, FY2018 to FY2025. The lines run close to the floor and turn up at the right-hand end.Days of sales outstanding for each company, FY2018 to FY2025. The lines run close to the floor and turn up at the right-hand end. The figures are listed in the table below this chart.not yetreported0510151819202122232425
First MillsModern MillsArabian MillsFourth Mills
Chart data
20182019202020212022202320242025
First Mills0 days1 days1 days1 days2 days3 days4 days9 days
Modern Millsn/an/an/an/a0 days0 days2 days7 days
Arabian Millsn/an/an/an/an/a1 days8 days15 days
Fourth Millsn/an/an/an/a1 days3 days4 days9 days
Days of sales outstanding. The shaded years are before any of the four reported, and each line begins where that company’s accounts do. What they share is where each starts, at a day or two of sales, which is what selling to an approved list at an administered price looks like, and where each finishes, with every one turning up in the final year.

Where the cash goes

Three uses, and each one consumes cash the other two could have had. One of the three turns out to be very nearly empty here, which is its own answer to what a milling company is for: there is almost nothing to buy, so the choice is only ever between the plant and the shareholder.

  1. Back into the plant

    Reinvest in capacity

    Mills, silos and new lines: the only way to sell more tons at a price you do not set. Modern Mills is spending the most, having just rebuilt a plant a third larger than the year before. Arabian Mills spent heaviest of anyone early on and has been among the lightest since, which is the same decision from the other end. Fourth Mills is the lightest of the four, on the plant it runs hardest.

    Reinvest in capacity, each company, FY2018 to FY2025.Reinvest in capacity, each company, FY2018 to FY2025. The figures are listed in the table below this chart.0%5%10%15%1819202122232425
    First MillsModern MillsArabian MillsFourth Mills
    Chart data
    20182019202020212022202320242025
    First Mills1.1%7.6%4.9%4.8%4.2%12.4%5.5%7.4%
    Modern Mills2.2%3.0%4.7%3.3%3.5%6.0%10.6%13.3%
    Arabian Millsn/an/a7.7%14.5%8.1%2.3%1.9%5.8%
    Fourth Millsn/an/a7.5%6.2%12.8%1.8%2.5%5.4%
  2. Buy rather than build

    Acquire companies

    The emptiest chart on this page. In eight years First Mills is the only one of the four to have bought a company, once, in the final year. Modern Mills, Arabian Mills and Fourth Mills have spent nothing. These four were themselves the acquisitions, and the law needs the authority's approval before any of them buys another.

    99FirstMillsnoneModernMillsnoneArabianMillsnoneFourthMills
    SAR millions, FY2018 to FY2025
  3. Out to shareholders

    Dividends

    With nothing to buy, this is the only real competitor the plant has. First Mills pays the most per share and has paid every year since privatization, as has Modern Mills. Arabian Mills paid nothing until 2024, the other side of the acquisition debt it has been retiring fastest. Fourth Mills restructured its capital before listing, so its line is not one unit.

    Dividends, each company, FY2018 to FY2025.Dividends, each company, FY2018 to FY2025. The figures are listed in the table below this chart.05.010151819202122232425split
    First MillsModern MillsArabian MillsFourth Mills
    Chart data
    20182019202020212022202320242025
    First Mills0.000.000.0011.393.231.372.982.79
    Modern Mills0.000.000.003.001.881.732.002.00
    Arabian Millsn/an/a0.000.000.000.000.591.00
    Fourth Millsn/an/a0.000.001.294.190.260.22
Every figure here is read off the workbook at build time. Two things the charts cannot say for themselves. Three of the four columns in the middle chart are empty because those companies have spent nothing at all, not because a figure is missing; a zero there is a fact rather than a gap. And Fourth Mills' capital was restructured from about 47 million shares to 540 million before it listed, so the two halves of its dividend line are different units and the fall across 2024 is arithmetic. The earliest years on every line are carve-out accounts rather than the company as it trades today.

The four millers

Same authority, same allocation, same administered price, and five stages of plant and brand that the sequence above has just measured them all against. The striking thing about that exercise is how little separates them. Their returns on capital differ by nearly ten points anyway, which is what the two sections after this one are about.

The largest

First Mills 2283

Listed
Jun 2023
Market cap
SAR 2.5B
Revenue
SAR 1.1B
Net margin
24.2%
Free cash flow
SAR 260M
Dividend / share
SAR 2.79
FY2025 spread +5.9pt
The geared one

Modern Mills 2284

Listed
Mar 2024
Market cap
SAR 2.3B
Revenue
SAR 1.0B
Net margin
21.4%
Free cash flow
SAR 126M
Dividend / share
SAR 2.00
FY2025 spread +13.6pt
The one paying it down

Arabian Mills 2285

Listed
Oct 2024
Market cap
SAR 2.0B
Revenue
SAR 998M
Net margin
23.8%
Free cash flow
SAR 373M
Dividend / share
SAR 1.00
FY2025 spread +4.6pt
The clean one

Fourth Mills 2286

Listed
Oct 2024
Market cap
SAR 1.9B
Revenue
SAR 660M
Net margin
30.4%
Free cash flow
SAR 199M
Dividend / share
SAR 0.22
FY2025 spread +9.5pt

Figures for FY2025. Market cap is at the year-end close. Listed is the month each company began trading on the Main Market.

Side by side, FY2025

Everything above is the mechanism. This is the year just reported, on one page, with all 4 of them measured the same way.

FY2025 on a like-for-like basis. The stronger figure in each row is marked; on ratios where lower is better, that is the lower one. A row where neither direction is better is left unmarked.
MeasureFirst Mills2283Modern Mills2284Arabian Mills2285Fourth Mills2286
Financial Highlights
Net revenuesscale of the businessSAR 1,146MSAR 1,047MSAR 998MSAR 660M
Revenue growthyear on year+9.3%+3.1%+2.4%+7.0%
EBITDA marginbefore capital charges35.1%30.6%39.1%40.4%
Net profit marginper riyal of sales24.2%21.4%23.8%30.4%
Cash Highlights
Days sales outstandingdays to collect a sale9 days7 days15 days9 days
Capex % of revenuesas the cash flow statement reports it7.4%13.3%5.8%5.4%
Dividends per sharedeclared for the yearSAR 2.79SAR 2.00SAR 1.00SAR 0.22
Free cash flowafter capital spendingSAR 260MSAR 126MSAR 373MSAR 199M
Operational Highlights
Factoriesproduction sites5333
Millsmilling lines159117
Capacity utilizationof milling capacity in use94.0%92.0%90.0%98.3%
Wheat milling capacitytons a day5,1504,7004,9203,518
Other Highlights
Board remunerationpaid to directorsSAR 4.8MSAR 2.2MSAR 3.9MSAR 3.6M
Saudization rateof the workforce43.7%48.7%41.8%29.0%
Employeesheadcount at year end561451623172
Revenue per employeenet revenues per full-time employeeSAR 2.0MSAR 2.3MSAR 1.6MSAR 3.8M

Marking the stronger figure is arithmetic, not a recommendation. A company can lead every row here and still be the wrong price.

Does the capital earn its keep

Return on invested capital against what that capital costs, every year from FY2018 to FY2025. Above the line the business is creating value. Below it, it is consuming value, however healthy the revenue line looks.

First Mills+5.9pt FY2025

0%10%20%30%ROIC 15.1%WACC 9.2%FY18FY19FY20FY21FY22FY23FY24FY25
Chart data
20182019202020212022202320242025
ROIC13.0%12.8%15.0%22.0%11.8%12.9%14.3%15.1%
WACC11.1%9.6%8.1%6.7%5.4%10.0%9.6%9.2%
Spread+1.8pt+3.1pt+6.9pt+15.3pt+6.3pt+3.0pt+4.7pt+5.9pt

Modern Mills+13.6pt FY2025

0%10%20%30%ROIC 23.2%WACC 9.5%FY18FY19FY20FY21FY22FY23FY24FY25
Chart data
20182019202020212022202320242025
ROIC5.9%3.6%6.0%10.0%27.3%25.0%23.1%23.2%
WACC6.8%5.2%5.1%3.0%4.3%6.1%9.9%9.5%
Spread-0.9pt-1.6pt+1.0pt+7.1pt+23.0pt+18.9pt+13.2pt+13.6pt

Arabian Mills+4.6pt FY2025

0%10%20%30%ROIC 14.3%WACC 9.7%FY18FY19FY20FY21FY22FY23FY24FY25
Chart data
20182019202020212022202320242025
ROICn/an/a10.8%9.5%11.2%14.3%14.2%14.3%
WACCn/an/a6.6%6.2%2.7%8.8%8.5%9.7%
Spreadn/an/a+4.2pt+3.3pt+8.5pt+5.4pt+5.7pt+4.6pt

Fourth Mills+9.5pt FY2025

0%10%20%30%ROIC 18.1%WACC 8.7%FY18FY19FY20FY21FY22FY23FY24FY25
Chart data
20182019202020212022202320242025
ROICn/an/a8.4%8.2%16.6%15.1%17.9%18.1%
WACCn/an/a6.6%6.1%6.8%6.4%8.3%8.7%
Spreadn/an/a+1.8pt+2.1pt+9.8pt+8.7pt+9.6pt+9.5pt
value createdvalue destroyedSame vertical scale in every panel. is ROIC less WACC.

What decides the next two years

Whether the wheat support survives its next review

The commitment to hold the price differential ran to 12 July 2025 and then lapsed, and the support has carried on unchanged since. Every spread over cost of capital in this sector sits on top of it. The millers are not wholly unprotected: the Ministry of Finance agreed to compensate them if the law, the implementing regulations, the pricing policy or the license period were changed, which is a real backstop against a rewrite. The gap in it is the case that matters most. On the terms disclosed at listing, a complete lifting of the subsidy after July 2025 is not a change the companies can claim against. That is the one version of this risk the state has not agreed to absorb.

Whether the purchase premiums are ever earned

Two of the four carry a large privatization premium in invested capital, and it does not shrink as debt is repaid. On the plants themselves all four earn comfortably more than their cost of capital; on the price their owners paid, two of them are still working. Watch for either an impairment, which resets the denominator in a single line, or enough profit growth to absorb it, which takes years.

Whether growth has anywhere left to come from

All four now run close to full capacity and the free growth is finished. The next ton has to be bought with capital, at a margin the state still sets. The first meaningful capacity additions since privatization have already begun, and the sector's returns over the next few years will largely be the arithmetic of what those additions cost against a margin that does not move.

Whether the unregulated half of the ton outgrows the regulated half

Bran, feed and durum sell at market prices, and the authority only opened flour exports to the licensed millers in November 2024, on condition that they export surplus capacity and refund the wheat subsidy on whatever leaves the country. That is the only part of this business where a management team can be better than its peers rather than the same as them. It is also the only part exposed to a commodity market, which cuts both ways.