This decrease is mainly attributable to lower sales at existing branches, driven by intensified competition in the fast-food sector and the impact of purchasing power on demand levels. This was despite the positive contribution from consolidating the sales of the “Simple Burger” (SMPL BRGR) brand from 1 March 2026 and the opening of new branches during the period.

This decrease is mainly attributable to:

1. Lower revenue and a 6.41% decrease in gross profit.

2. Higher general and administrative expenses due to increased salaries and related costs.

3. Higher finance costs arising from lease liabilities and the unwinding of the discount on the acquisition’s contingent consideration.

4. Recognition of the Company’s share of losses of an associate (“Brand Developers Company”), as it is in its establishment phase.

This was despite a 7.80% decrease in selling and marketing expenses, resulting from lower delivery-platform costs and commissions, and an increase in other income.

• On 9 February 2026, the Company entered into an agreement to acquire 100% of the capital of “Simple Burger for Meal Services Establishment” for a total contractual value of SAR 23.8 million (including contingent consideration subject to financial performance levels for 2026 and 2027). The acquisition became effective on 1 March 2026, following the fulfilment of regulatory conditions and the transfer of full operational and financial control.

• Impact on retained earnings and shareholders’ equity: As the transaction was conducted with a related party, it was accounted for in accordance with the standards and guidance of the Saudi Organization for Chartered and Professional Accountants (SOCPA), by recognising the acquired net assets at their book value (SAR 3,991,494) without recognising any goodwill. The difference between the book value of the net assets and the purchase consideration of SAR 23,042,797 (including the recognised contingent consideration) was recorded as a direct negative adjustment to “Retained Earnings” and total shareholders’ equity in the amount of SAR (19,051,303), with no impact on the statement of profit or loss. This is the principal reason for the decrease in retained earnings and shareholders’ equity at the end of the period.

2. Establishment of Brand Developers Company (Investment in an Associate in its Establishment Phase):

• On 8 April 2026, the Group entered into a partnership agreement to establish “Brand Developers Company” with an ownership stake of 66.66%, and to contribute interest-free financing (Qard Hasan) of SAR 2.0 million, repayable during 2028 and 2029.

Statutory Reserve and Other Reserve Balance:

• The Extraordinary General Assembly held on 4 June 2026 approved the transfer of the entire statutory reserve and other reserve balance of SAR 5,090,016 to retained earnings, in line with the provisions of the new Companies Law and the amendment of the Company’s Bylaws.