Mobico Group’s ALSA Secures Major Saudi Arabia Contract

Mobico Group Plc (LON: MCG) announced Thursday that its ALSA subsidiary, as part of a Joint Venture, has been awarded a significant eight-year contract in the Kingdom of Saudi Arabia, sending positive signals to the market.

The capital-light contract, worth €500 million in revenue, underscores Mobico's strategic expansion in the Middle East and its commitment to sustainable transport solutions.

The contract involves operating 156 vehicles, with a substantial 126 being electric, to serve Qiddiya, a burgeoning entertainment destination near Riyadh.

Mobico said the project aligns with Saudi Arabia's key strategic initiatives, positioning Mobico as a pivotal player in the region's evolving infrastructure. The services include Park & Ride facilities and shuttle connections between Riyadh and Qiddiya, highlighting the breadth of the operation.

This win builds upon ALSA's existing footprint in Saudi Arabia, which began in October 2023 with long-haul, intercity services across the southern region. The new contract not only expands their geographical reach but also diversifies their service offerings, making them a more integral part of the Saudi Arabian transport landscape.

The markets reacted favorably to the announcement, anticipating a positive impact on Mobico's revenue streams and profitability. Analysts suggest that this contract win could lead to increased investor confidence, potentially driving the share price higher in the coming weeks.

The focus will be on Mobico's ability to efficiently execute the contract and maintain profitability within the agreed terms.

A key driver behind this success is ALSA's proven track record in delivering reliable and sustainable transport solutions. Their experience in operating long-haul services in Saudi Arabia gave them a competitive edge in securing this new contract.

Additionally, the emphasis on electric vehicles aligns with global trends towards eco-friendly transportation, further enhancing Mobico's appeal to environmentally conscious investors.