Maharah Human Resources profits increased to SAR 36.5 million Q1 by 47%

The net profit of Maharah Human Resources Company after zakat and tax increased to SAR 36.5 million during the first quarter, compared to SAR 25 million in the same quarter of last year, by 47%.

This came after the announcement on Sunday of the interim financial results for the period ended on 31.03.2023 (three months).

The operational profit amounted to SAR 30 million in the first quarter, compared to SAR 23 million in the same quarter of the previous year, a growth of 31%.

As for the total profit, it amounted to SAR 57 million in the current period, compared to SAR 49 million in the same period last year, an increase of 16%.

Profits per share in the current period amounted to SAR 0.97, compared to SAR 0.66 in the same period last year.

Consolidated net income attributable to the shareholders of the company increased by 47% compared with the same quarter of the previous year, mainly due to:

• The company’s revenue increased by 21% compared with the same quarter of the previous year, due to the increase in the overall average number of resources by 19%, whereas the revenue from the corporate segment increased by 37% compared to the same quarter of the previous year, supported by the revenue recognized from the new strategic contracts in the corporate segment and increase in the average number of resources. In contrast, the revenue from the individual segment decreased by 4% compared with the same quarter of the previous year due to the implementation of price ceilings for individual services in accordance with the new applied regulations, which led to a decrease in the average price per workforce.
• The company’s main segments (corporate and individual) witnessed an increase in gross profit by 21% compared to the same quarter of the previous year, despite the impact on the gross profit as a result of the decrease in revenue from the individual segment, however, the gross profit was adversely affected by the results of the facilities management, logistics, and home healthcare sectors, which are still considered in their startup and restructuring phases, which lead the company to achieve net growth in gross profit by 16% compared to the same quarter of the previous year.
• The general and administrative expenses decreased by SAR 1M compared to the same quarter of the previous year,
• The investment in associates acquired during the third quarter of previous year (Care Shield Holding Co. and Saudi Medical Systems Co.) achieved an income of SAR 15M during the current quarter representing the company shares of their profits, which we expect to continue its positive results during the coming periods.
• In contrast, the finance cost amounted to SAR 10.2M during the current quarter, which was mainly due to the obtained long-term loans to finance the new acquisitions that have been completed during the third quarter of the previous year.
• The income from the investment in financial instruments through profit or loss decreased by SAR 3.7M compared to the same quarter of the previous year due to reduce the financial investments amount and use it as part of financing of the acquisitions completed in the previous year.

Consolidated net income attributable to the shareholders of the company decreased by 9% compared with the previous quarter, mainly due to:

• The company’s revenue decreased by 2% compared to the previous quarter, whereas the revenue from the individual segment decreased by 7% compared to the previous quarter due to the implementation of price ceilings for individual services in accordance with applied new regulations, which led to a decrease in the average price per workforce while the revenue from the corporate segment maintained at the same level compared to the previous quarter. The revenues was also decreased from the facilities management by 11% compared to the previous quarter as the company continue its restructuring of their operations, which will lead to improving its results in the upcoming periods.
• The decreased of the investment in associates results that was acquired during the third quarter of previous year (Care Shield Holding Co. and Saudi Medical Systems Co.) by SAR 6.3M compared to the previous quarter.
• An increase in the finance cost by SAR 3M compared to the previous quarter due to the increase in the applied rates of borrowing during the period, while maintaining the same level of the loan amounts that were obtained as long term loans to finance the investment acquired in the previous year.
• In contrast, general and administrative expenses decreased by SAR 7.2M compared to the previous quarter, as the previous quarter was impacted by other non-recurring items.
• A reverse in the expense of doubtful debt by SAR 7.3M compared to the previous quarter as a result of improvement in collection performance, in accordance to the expected credit loss model.

The company state that Certain prior period’s figures have been reclassified to conform to the current period presentation.

Additional Information

• Total equity attributable to the shareholders of the parent company in the first quarter from this year amounted to SAR 598M (SAR 522M in the end of first quarter 2022)
• A conference call with analysts and investors will be held on Wednesday 17 May 2023 from 3:00 PM to 4:00 PM KSA.