Maharah Human Resources profits fell to SR36 mln during the 3Q, by 26%

Maharah Human Resources Company net profit after zakat and tax for decreased to SR35.6 million during the third quarter, compared to SR48.11 million during the same quarter of the previous year, by 25.9%.

This came after the Maharah Human Resources Co. announced on Thursday its interim financial results for the period ending on 2021-09-30 (nine months)

The operational profit amounted to SR36 million during the third quarter, compared to SR47.47 million during the same quarter of the previous year, a decrease of 24.16%.

As for the gross profit, it amounted to SR54 million during the third quarter, compared to SR62.79 million during the same quarter of the previous year, a decrease of 13.95%.

The net profit after zakat and tax during the current period amounted to SR105.66 million, compared to 154.79 million during the same period of the previous year, a decrease of 31.74%.

Profits per share during the current period amounted to SR2.82, compared to SR4.13 during the same period of the previous year.

Consolidated net income attributable to the shareholders of the parent company decreased by 26% compared with the same quarter of the previous year, mainly due to:

• The company’s revenue decreased by 5% compared to the same quarter of the previous year, in which the corporate segment revenue decreased by 7% due to the decrease in the average number of resources caused by the continuing suspension of the international flights with the workforce’s sourcing main countries, while the individual segment maintained the same level of the revenue, with the recovery in revenue from the part-time services (Khidmah).

• Gross profit decreased by 14% compared to the same quarter of the previous year due to the abovementioned decline in the company’s revenues in general, in addition to an increase of the recruitment costs due to the impact of the Corona pandemic.

• Selling and marketing expenses increased by SAR 1 million due to the advertising campaigns during the current quarter compared to the same quarter of the previous year.

• Although, general and administrative expenses decreased by 4% due to the control on these expenses, as well as the gain from investment in the financial assets at fair value through profit and loss increased by SAR 1 million compared to the same quarter of the previous year.

Consolidated net income attributable to the shareholders of the parent company decreased by 8% compared with the previous quarter, mainly due to:

Although the enhancement of operating income elements during the current quarter compared to the previous quarter were as follows:

• The company’s revenue increased by 1% compared to the previous quarter, in which the corporate segment revenue increased by 2% while there was a slight decrease in the individual segment revenue compared to the previous quarter.

• Gross profit increased by 1% compared to the previous quarter in line with the increase in the company’s revenues in general.

• Whereas the company maintained its general and administration expenses at the same level during the current quarter, there was a slight increase in the selling and marketing expenses by SR 0.7 million due to the advertising campaigns during the current quarter, in addition to an increase in the sales commissions.

• The associate company (Bloovo) achieved positive results during the current quarter, compared to the losses amounting to SAR 1.2 million during the previous quarter.

• on the other hand, there was an increase in the doubtful debts expense compared to the previous quarter, which was including an expense reversal with amount of SR 6.3 million, in accordance with the ECL model, which impacted negatively on the comparative figures compared to the previous quarter.

Consolidated net income attributable to the shareholders of the parent company for the period ending 30-09-2021 (nine-months) decreased by 32% compared with the same period of the previous year, mainly due to:

• The company’s revenue decreased by 11% compared to the same period of the previous year, where the revenue from both corporate and individual segments decreased by 12% and 8% achieving revenue of SAR 698 million and SAR 271 million respectively during the current period, due to the decrease in the average number of resources as a result of the effects of the spread of the Corona pandemic and the continuing suspension of the international flights with the workforce’s sourcing main countries.

• The decrease in the gross profit by 25% during the period due to the abovementioned decline in the company’s revenues in general, in addition to the costs to apply the social distancing standards and precautionary measures, in addition to an increase of the recruitment costs due to the Corona pandemic consequences.

• The company maintained its general and administrative expenses at the same level during the current quarter due to the control on these expenses, with a slight increase in the selling and marketing expenses by SR 0.9 million due to the advertising campaigns during the current quarter.

• In contrast, the doubtful debt expense decreased by SAR 5.4 million compared to the same period of the previous year as a result of the enhancement in collection performance and in accordance with the ECL model
• Effective August 4, 2021, the company completed the procedures of acquiring 90% of the ownership of Spectra. The carrying value of Spectra net assets amounted to SAR 31.1 million, and the consideration paid for which is SAR 17.1 million by settling trade receivables due to the Company from Spectra.
• It should be highlighted that the abovementioned transaction treated as a pooling of interest resulted in an increase of SAR 11 million which is recognized in the retained earnings attributable to the parent company.