‎Budget Saudi CEO: Demand set to improve in Q3

Source: Argaam - Main News
Source link: https://www.argaam.com/en/article/articledetail/id/1930763
Published: 2026-08-20 12:25:00
Discovered by ProcIntel: 2026-08-20 20:35:27
Category: GCC Spotlight
Geography: Saudi Arabia
Organisations: —
Review status: Pending
Record type: REAL

Summary

‎<img src="https://argaamplus.s3.amazonaws.com/ad93f85c-fdd1-4f82-baca-57a0e7f54b6a.png" > Fawaz Danish, CEO of United International Transportation Co. (Budget Saudi) <hr> The recent pressures facing the car rental sector do not reflect any weakness in its fundamentals, but were primarily driven by geopolitical developments, said <a href="https://www.argaam.com/en/tadawul/tasi/budget-saudi/organizationemployhistory/fawaz-abdullah-danish/481" target="_blank">Fawaz Danish</a>, CEO of United International Transportation Co. (<a href="https://www.argaam.com/en/tadawul/tasi/budget-saudi" target="_blank">Budget Saudi</a>). Speaking to Argaam, Danish said the impact was more pronounced at the onset of the events, before individuals and companies gradually adapted and activity began to recover. He noted that a return to normal conditions could drive demand to stronger levels, given the travel plans and requirements that were postponed during the period. The CEO added that demand could rebound once the uncertainty subsides, citing the sharp increase in global travel following the lifting of restrictions imposed during the COVID-19 pandemic. Q3 2026 outlook Danish said current indicators point to a positive outlook for Q3, with operating levels and demand expected to improve compared to Q2 2026. He attributed the expected improvement to continued growth in domestic tourism, the gradual recovery in inbound travel, and companies that had previously postponed decisions on long-term rental contracts resuming their purchasing decisions. Greater clarity among individuals and companies has also started to support a recovery in activity and decision-making, which is expected to benefit the sector in the coming period, he added. Danish noted that Q2 2026 results should be compared with caution, given the SAR 25 million in non-recurring non-operating income recorded during the quarter. Q2 2026 performance Danish said the company’s operating performance improved significantly in Q2 2026 compared to Q1 2026. Excluding the SAR 25 million in non-recurring non-operating income, net profit reached around SAR 68 million in Q2 2026, compared to approximately SAR 34.45 million in the previous quarter. Regarding the short-term rental business, he said fleet utilization began to improve during the final month of Q2 2026, coinciding with the start of the summer season in Saudi Arabia. Demand for short-term rentals increased by around 3%-4% during the final month of Q2 2026, while short-term rental fleet utilization reached approximately 65%-66% at the start of Q3 2026. However, Danish stressed that utilization levels have not yet returned to normal. Domestic tourism was the main driver of the improvement, supported by increased travel by citizens and residents to the southern regions and destinations with moderate climate, as well as Makkah, Madinah and Jeddah. Al Baha also recorded strong demand during the summer season, positively contributing to short-term rental activity. As for long-term rentals, Danish said the company has begun to see improved demand after a period of delayed decision-making by some companies. Some customers that had planned to order new vehicles postponed their decisions amid the uncertainty. The company, however, is now receiving new orders as customers resume making decisions on rental contracts. The business was also affected by supply chain disruptions, with existing orders unable to be delivered on schedule due to limited vehicle availability. A two- to three-month delay in receiving vehicles postpones revenue recognition on rental contracts until the vehicles are delivered, he explained. He also noted that this is a temporary impact and does not indicate a loss of demand, but rather a deferral of revenue to subsequent periods. Supply shortages support used-car prices Danish said delays in new vehicle deliveries also positively affect the company, as they support demand for used cars and improve vehicle resale values. The shortage of new vehicles is driving demand for used cars and, consequently, supporting resale values. Meanwhile, new vehicles may arrive at higher costs due to factors related to shipping and insurance. Budget Saudi’s business model allows it to benefit, to some extent, from both sides of the market: shortages of new vehicles delay the delivery of some rental contracts, while supporting the value of the used vehicles it sells. Vehicle recovery rate rises to 65-66% Regarding used-car sales, Danish said the company sold more vehicles than usual during Q2 2026, alongside an improvement in resale prices. Some of the vehicles sold had reached their target replacement age, while others could be disposed of given current utilization levels. The vehicle recovery rate improved to around 65-66% in Q2 2026, compared to approximately 60-61% previously. The increase in vehicle sales and improved resale values positively contributed to the business’s earnings, he added. What happened to the used-car market? Danish said the used-car market came under pressure during Q1 2026 due to increased supply, alongside a decline in the re-export of certain small cars, particularly those with engine capacities of 1.3-1.5 liters. These vehicles are exported to several international markets, but geopolitical developments and higher transportation costs affected export activity, leaving larger quantities in the domestic market and putting pressure on resale prices. The market began to recover toward the end of Q2 2026 as demand gradually picked up and the number of vehicles available declined, supporting higher resale prices. Geopolitical events affected travel, business and Umrah Danish said geopolitical developments had a significant impact on short-term rental demand, with the effects extending to tourism, business travel, airport traffic and religious visits. The uncertainty at the onset of the events prompted many travelers to reconsider their trips, while business travel became more closely tied to essential needs than during normal periods. Airports and air traffic were among the main channels through which the impact on demand was felt, amid concerns over flight cancellations, delays and travel disruptions. He noted that domestic tourism helped mitigate part of the impact, with increased travel by citizens and residents between different regions of the Kingdom during the summer season. According to data available with Argaam, Budget Saudi’s net profit rose 9% to SAR 93.38 million in <a href="https://www.argaam.com/en/financial-reports/company-report/843/2026/71" target="_blank">H1 2026</a>, compared to SAR 85.63 million in H1 2025.

Procurement Relevance Gate

PASS — score 31.6/100 — evaluated 2026-08-20 20:35:27

Passed on: logistics_freight_transport, price_availability_leadtime_demand, geographic_exposure (score 31.6/100, threshold 20.0).

logistics_freight_transport (weight 12) — matched on "shipping"
price_availability_leadtime_demand (weight 10) — matched on "shortage"
geographic_exposure (weight 8) — matched on "1 linked geography"

Initial Signal Assessment ProcIntel's automatic, provisional read of this individual Signal -- Initial Significance and Initial Confidence, computed deterministically before any Event extraction or human review.

A provisional, automatically-computed reading of this individual Signal, before Event extraction or human review. Not a final rating.

Initial Significance: 2 · Moderate (26.0/100)
Initial Confidence: 1 · Very Low (16.5/100)
Data sufficiency Whether enough structured evidence exists to trust this Signal's Initial Confidence reading. 'Sufficient' has no cap; 'Partial' and 'Insufficient' cap Confidence until more evidence is available; 'Not Assessed' means the Signal did not pass the Relevance Gate.: Partial
Strongest contributor: Procurement Impact
Limiting factor: Likely Event Severity

Initial Significance Moderate (26.0/100). Strongest contributor: Procurement Impact (12.0/30 points). Limiting factor: Likely Event Severity (3.0/30 points). Initial Confidence Very Low (16.5/100, data sufficiency: Partial). Strongest contributor: Source Authority (20.0/40 points). Limiting factor: Corroboration (2.5/25 points).

No likely Event type matched; a low contextual baseline was applied.
Entity Criticality data quality warning: all_linked_entities_data_insufficient.
no matched Event type
no actor entities (only attribution/metadata, if any)
no actor content-derived geography
single source only
Entities were mentioned as context or document attribution rather than as actors in the reported development, so they did not increase Initial Confidence.
Geographies were mentioned only in diplomatic reaction, commentary or background context rather than as the actor, event location or affected party in the reported development, so they did not increase Initial Confidence.
Only source-level geography metadata was available.
Source metadata did not contribute to Initial Confidence.
3 distinct hedging pattern(s) matched (capped at 20).

Methodology signal_scoring_v1 — calculated 2026-08-20 20:35:28.

‎Budget Saudi CEO: Demand set to improve in Q3

Summary

Procurement Relevance Gate

Initial Signal Assessment ⓘMore about Initial Signal AssessmentProcIntel's automatic, provisional read of this individual Signal -- Initial Significance and Initial Confidence, computed deterministically before any Event extraction or human review.

Initial Signal Assessment ProcIntel's automatic, provisional read of this individual Signal -- Initial Significance and Initial Confidence, computed deterministically before any Event extraction or human review.