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Arabian Contracting Services Co. Announces Signing a contract with Remat Al-Riyadh Development Company for purpose of ''Establishing, Operating, and Maintaining Outdoor Advertising Billboards in Riyadh City''.
| Element List | Explanation |
|---|---|
| Introduction | Referring to the announcement of Arabian Contracting Services Co. on 25-10-2023 Corresponding to 10-04-1445, regarding winning the project of "establishing, operating, and maintaining outdoor advertising billboards in Riyadh City" which was offered by Remat Al-Riyadh Development Company. Arabian Contracting Services Co. would like to announce signing of a contract on Wednesday 25-10-2023 corresponding to 10-04-1445 for establishing, operating, and maintaining outdoor advertising billboards in Riyadh City with Remat Al-Riyadh Development Company - that serves as the development arm of the Riyadh Municipality and is responsible for managing the outdoor advertising portfolio- in order to invest in specific sites within Riyadh City for the establishment of various advertising mediums. This project includes all forms of outdoor advertising in municipal sites for a period of 10 years, where the contract includes a preparation period of up to 12 months and an investment period of 9 years. This project is based on Revenue sharing model. |
| Date of Announcement of the Award | 2023-10-25 Corresponding to 1445-04-10 |
| Contract Subject Matter | A project contract for establishing, operating and maintaining outdoor billboards in Riyadh City. |
| Date of Signing the Contract | 2023-10-25 Corresponding to 1445-04-10 |
| Contract Value | Sharing the project's net revenue according to previously agreed percentage or the minimum guarantee of SAR 1,522,000,000 annually (excluding value-added tax) – which is higher, and starting from the sixth year of the contract until its completion, there will be a 10% increase applied to both the annual minimum guarantee and the percentage of project's net revenue. |
| Contract Details | The total number of billboards is 1,325 billboards of various types and mediums, with a total advertising area estimated at (25,700) square meters, with the ability to increase and modify the number of billboards and sites to reach 3,000 billboards, with doubling the advertising space. To enhance and facilitate data collection and expand the database size, all billboards in the project will be equipped with data collection technologies. The collected data will be shared with our consortium the Saudi Company for Artificial Intelligence (SCAI) while adhering to regulations and instructions and ensuring the privacy of the data. The advertising sites also contain four digital zones, where Alarabia will undertake the design, development and operation of these zones with the aim of transforming them into one of the prominent landmarks of Riyadh city, in accordance with the agreed specifications. Each of these zones will encompass a range of digital billboards distributed across a cluster of the buildings to form a network of screens displaying fixed or animated advertisements throughout the day. The annual returns due to Remat Al-Riyadh Company consist of sharing the project’s net revenue according to previously agreed percentage with a guarantee that the value of this is not less than the annual minimum guarantee for Remat Al-Riyadh Company, which has been set at SAR 1,522,000,000 (excluding value-added tax), and starting from the sixth year of the contract until its completion, there will be a 10% increase applied to both the annual minimum guarantee and the percentage of project's net revenue, in addition to determining the value of the annual advertising fees due on the billboards with the amount of SAR 10,280,000. |
| Contract Duration | 10 Years, where the contract includes a preparation period of up to 12 months and an investment period of 9 years. |
| Financial Impact and the Relevant Period | The financial impact of the project will become apparent by the end of the fourth quarter in 2023. |
| Related Parties | N\A |
The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.
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