Source FY2025 audited financial statements, restated in the modelWorkings data appendixUpdated 24 September 2026
The read
On the reported arithmetic this is the best business in Saudi milling: 23.2% on invested capital that costs 9.5%, a spread of +13.6pt, the widest in the cohort and by a distance. It is worth being precise about where that comes from before treating it as an operating verdict.
Modern Mills carries no acquisition goodwill and the smallest invested capital in the sector, SAR 1.1B, on a plant no smaller than its peers'. The equity was paid out ahead of listing rather than left in the company, which is why debt to equity is 2.51x, the highest here. Measured on operating capital, where a purchase premium stops flattering anybody, it earns 23.3%, second-lowest of the four rather than highest.
The operating record is genuinely strong in one place and weak in another. It runs the tightest working capital in the sector: 7 days to collect, 51 days for the whole cash cycle, both the shortest of the four. But it also has the thinnest margins here, 42.6% gross and 30.6% EBITDA, distributes the most at 73.1% of net profit, and is running the heaviest capital program in the cohort at 13.3% of revenue. Paying out three quarters of earnings while expanding capacity on the most leveraged balance sheet in the sector is the tension in this company.
The bet it made
Modern Mills is the one that was not bought with goodwill, and the one that spent 2025 doing the opposite of First Mills. It raised wheat milling capacity by more than a third and left the rest of the plant alone, which is a bet on the regulated half of the ton, taken on the smallest capital base in the sector.
What it does carry is debt. Its equity was cut sharply before listing, taking debt to equity above six times at the trough, and after several years of repayment it is still the most leveraged of the four. The high reported return on capital and the high leverage are the same decision seen from two ends.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|---|---|
| First Mills | 1.1% | 7.6% | 4.9% | 4.8% | 4.2% | 12.4% | 5.5% | 7.4% |
| Modern Mills | 2.2% | 3.0% | 4.7% | 3.3% | 3.5% | 6.0% | 10.6% | 13.3% |
| Arabian Mills | n/a | n/a | 7.7% | 14.5% | 8.1% | 2.3% | 1.9% | 5.8% |
| Fourth Mills | n/a | n/a | 7.5% | 6.2% | 12.8% | 1.8% | 2.5% | 5.4% |
Where the volume comes from
Regulated flour
1.57 million tons of wheat milled in 2025 at 92% utilization, second only to First Mills, on daily wheat capacity that rose from 3,450 to 4,700 tons during the year, the largest single capacity addition in the cohort.
Bran and feed
1,400 tons a day of feed capacity, the largest of the four, plus 1,175 tons a day of bran. On the unregulated half of the ton this is the best-equipped company in the sector.
Beyond the allocation
The expansion of its western plant is the visible strategy: more capacity at the same granted margin. Whether that creates value depends entirely on the margin holding, because the capital goes in first.
What it does with the money
Modern Mills does two expensive things at once. It distributes the largest share of its earnings in the cohort, and it runs the largest capital program, on the most leveraged balance sheet here.
That combination works while the granted margin holds and cash conversion stays as tight as it is, and this is much the fastest working capital cycle of the four. It is also the least forgiving of the four balance sheets if either changes.
What comes back to shareholders
Of what it earned in FY2025, Modern Mills declared SAR 2.00 a share, 73.1% of net profit, against free cash flow of SAR 126M. Every riyal a miller earns arrives at the same fork: back into the plant, or out to shareholders. That ratio is the answer this one gave.
In context
This company only means something next to the other three and against the economics of the industry they share.
Read the industry piece See it against the others