Al Hokair Group losses Decrease to SR31 mln during 1Q, by 48%

The Abdulmohsen Alhokair Group for Tourism and Development announced on Tuesday that it recorded a net loss after zakat and tax in the first quarter of SR31 million, compared to losses of SR60 million in the same quarter of last year, down 48%.

This came after Alhokair announcement on Tuesday the preliminary financial results for the period ending on 31.03.2022 (three months).

The operational loss amounted to SR18 million in the first quarter, compared to a loss of SR42 million in the same quarter of the previous year, a decrease of 57%.

The gross profit in the first quarter amounted to SR28 million, compared to SR2 million in the same quarter of the previous year, a growth of 1277%.

The loss per share in the current period was SR0.48, compared to a loss of SR1.09 in the same period last year.

The reason of the increase (decrease) in the net profit during the current quarter compared to the same quarter of the last year is:

The Group achieved a net loss of SR 31.36 million during current quarter of year 2022 compared to a net loss of SR 60.1 million during same quarter of last year 2021 that was mainly due to the following:

1- Revenues: The Group achieved revenues of SR 172.38 Million during Current quarter of year 2022 compared to revenues of SR 140.99 million during same quarter of last year 2021; a growth of SR 31.39 million (22.3%) due to:

1.1- The Hotel Division achieved Revenues of SR 97.19 Million during Current Quarter of Year 2022 compared to Revenues of SR 81.98 Million during Same Quarter of Last Year 2021; a growth of SR 15.22 Million (18.6%) that is mainly attributable to Hotel occupancy rates increased during the current quarter as a result of the complete lifting of precautionary measures, including international flights and performing Umrah, compared to the application of precautionary measures, which included stopping all events, celebrations, wedding halls and meeting rooms in hotels during the same quarter of the previous year.

1.2- The entertainment division achieved revenues of SR 65.89 million during current quarter of year 2022 compared to revenues of SR 50.31 million during same quarter of last year 2021; a growth of SR 15.59 million (31%) that is mainly attributable to The increase in the number of visitors to entertainment centres during the current quarter as a result of the complete lifting of precautionary measures and work at full capacity compared to the application of precautionary measures and the suspension of the operation of recreational centres for about a month during the same quarter of the previous year.

1.3- The other divisions achieved revenues of SR 9.29 million during current quarter of year 2022 compared to revenues of SR 8.71 million during same quarter of last year 2021; a growth of SR 0.58 million (6.7%).

2. Gross Profit: The gross profit reached SR 28.09 million during current quarter of year 2022 compared to a gross profit of SR 2.04 million during Same quarter of last year 2021; a growth of SR 26.05 million (1277.4%) that was mainly attributable to growth in the Group’s Revenues.

3. Operational Loss: The operational loss reached SR 17.96 million during current quarter of year 2022 compared to an operational loss of SR 41.94 million during same quarter of last year 2021; a reduction of SR 23.98 million (57.2%) that was mainly attributable to growth in gross profit.

4. Net Loss: The net loss reached SR 31.36 million during current quarter of year 2022 compared to a net loss of SR 60.1 million during same quarter of last year 2021; a reduction of SR 28.74 million (47.8%) that was mainly attributable to reduction in operational loss.

5. Total Comprehensive Loss: The total comprehensive loss reached SR 32.21 million during current quarter of year 2022 compared to a total comprehensive loss of SR 60.1 million during same quarter of last year 2021; a reduction of SR 27.9 million (46.4%) that was mainly attributable to reduction in net loss.

Item Two – Loss per share: The loss per share decreased to SR0.48 per share as at the end of the current period of the year 2022 compared to a loss of SR1.09 per share as at the end of the same period in the previous year 2021.

Item Three – Shareholders’ Equity: Shareholders’ equity increased by SR158.35 million (84.5%), as the total shareholders’ equity amounted to SR345.67 million as at the end of the current period of 2022 compared to SR187.32 million as at the end of the same period of the previous year.

Item Four – Accumulated losses: The accumulated losses amounted to SR303.66 million as at the end of the current period of the year 2022, which represents 46.7% of the group’s capital of SR650 million.

The reason of the increase (decrease) in the net profit during the current quarter compared to the previous period of the current year is:

The Group achieved a net loss of SR 31.36 million during current quarter of year 2022 compared to a net loss of SR 47.7 million during previous quarter of last year 2021 that was due mainly to the following:

1- Revenues: The Group has achieved revenues of SR 172.38 million during current quarter of year 2022 compared to revenues of SR 193.76 million during previous quarter of last year 2021; a reduction of SR 21.39 million (11%) due to:

1.1- The Hotel division achieved revenues of SR 97.19 million during current quarter of year 2022 compared to revenues of SR 107.97 million during previous quarter of last year 2021; a reduction of SR 10.78 million (10%).

1.2- The Entertainment division achieved revenues of SR 65.89 million during current quarter of year 2022 compared to revenues of SR 74.39 million during previous quarter of last year 2021; a reduction of SR 8.5 million (11.4%).

1.3- The other divisions achieved revenues of SR 9.29 million during current quarter of year 2022 compared to revenues of SR 11.4 million during previous quarter of last year 2021; a reduction of SR 2.11 million (18.5%).

2. Gross Profit: the gross profit reached SR 28.09 million during current quarter of year 2022 compared to a gross profit of SR 42.16 million during previous quarter of last year 2021; a reduction of SR 14.07 million (33.4%) that was mainly attributable to reduction in the group’s revenues.

3. Operational Loss: The operational loss reached SR 17.96 million during current quarter of year 2022 compared to an operational loss of SR 9.74 million during previous quarter of last year 2021; a growth of SR 8.23 million (84.5%) that was mainly attributable to reduction in gross profit.

4. Net Loss: The net loss reached SR 31.36 million during current quarter of year 2022 compared to a net loss of SR 47.7 million during previous quarter of last year 2021; a reduction of SR 16.34 million (34.3%) despite the growth in operational loss due to the net financial impact of non-recurring operations is:

First: The non-recurring financial impact of closing some sites and excluding their assets, with a loss equal to the net book value of SR5 million during the previous quarter.

Second: Recording a provision for impairment in the value of some property and equipment during the current year in the amount of SR19 million that was recorded during the previous quarter, based on the impairment test conducted by the Group in accordance with International Financial Reporting Standards.

5- Total Comprehensive Loss: The total comprehensive loss reached SR 32.21 million during current quarter of year 2022 compared to a total comprehensive loss of SR 48.77 million during previous quarter of last year 2021; a reduction of SR 16.56 million (33.9%) that was mainly attributable to reduction in net loss.

As indicated in note 2 to the interim condensed consolidated financial statements, the Group incurred a net loss of SR 31.37 million during for the three months period ended 31 March 2022 and, as of that date, the Group’s current liabilities exceeded its current assets, resulting in a negative working capital of SR 196.28 million. These conditions indicate that a material uncertainty exists that may cast a doubt on the Group’s ability to continue as a going concern. As stated in note 2, the management has made an assessment of the Group’s ability to continue as a going concern, and as result, these interim condensed consolidated financial statements have been prepared by management on a going concern basis. As further detailed in note 2, this assessment is dependent mainly on the Group’s ability to meet its business plan for the next 12 months from the date of the interim condensed consolidated financial statements and its ability to use the unutilized bank facilities and obtain additional bank loans. Our conclusion is not modified in respect of this matter.