BinDawood Holding profits decrease to SAR 52 million during Q1 by 20%

BinDawood Holding Company net profit after zakat and tax decreased to SAR 52 million during the first quarter, compared to SAR 65 million in the same quarter of last year, by 20%. This came after the announcement on Tuesday of the interim financial results for the period ended on 31.03.2023 (three months)

The operating profit amounted to SAR 76 million in the first quarter, compared to SAR 73 million in the same quarter of the previous year, an increase of 5%.

As for the total profit, it amounted to SAR 417 million in the current period, compared to SAR 384 million in the same period last year, a growth of 9%.

Earnings per share in the current period amounted to SAR 0.46, compared to SAR 0.57 in the same period last year.

Revenue in Q1 2023 was SAR 1,381.2 million, up 17.5% as compared to the same period last year where revenue of SAR 1,175.2 was reported.

The increase of pilgrims performing Umrah resulted in a significant uplift in performance of Haramain stores in Makkah and Madinah. Revenue growth also Improved by the better preparation for Ramadan season compared to the previous two seasons. The digital presence through Future Retail for Information Technology Company, also contributed to the overall increase in revenues.

Gross profit for Q1 2023 was SAR 416.6 million as compared to SAR 383.7 million in Q1 2022. Gross margin of 30.2% in Q1 2023 was lower than the 32.6% margin achieved in the corresponding period of the previous year. The major reason was the decline in supplier income.

Operating expenses in Q1 2023 were SAR 342.1 million versus SAR 312.8 million in Q1 2022. The increase vs. Q1 2022 was due to expenses related to branch openings and tech subsidiary operating cost.

Net profit for Q1 2023 was SAR 52.2 million versus SAR 65.5 million in Q4 2022, registering a decline of 20.2%. The net profit of Q1 FY 2023 does not include any exceptional gains. Where in Q1 2022 had rental relief of SAR 17.1 million.

Revenues in Q1 2023 was SAR 1,381.2 million, up 4.8% as compared to Q4 2022 where revenue of SAR 1,318.3 million was reported.

The primary driver behind the increase in revenue was the return of Pre-Ramadan season and Umrah season without limitations on pilgrims’ number.

Gross profit for Q1 2023 was SAR 416.6 million as compared to SAR 368.1 million in Q4 2022. Gross margin of 30.2% in Q1 2023 was higher by 2.3% than the margin achieved in the previous quarter, reflecting the positive impact of improved product mix, in addition to cooling down of inflationary conditions, more favorable contractual terms with suppliers.

Operating expenses in Q1 2023 were SAR 342.1 million versus SAR 330.1 million in Q4 2022. The expenses in Q4 2022 included certain one-time credits. Without such credits, there was a decline in operating expenses.

Net profit was SAR 52.2 million versus SAR 64.9 million in Q4 2022, registering a decline of 19.5%. The net profit of Q1 FY 2023 did not include any exceptional gains. Q4 2022 quarters had rental relief of SAR 40.2 million.

The company stated that no comparative figures for the previous period have been reclassified.

General Comments:

The Company’s financial position continued to be strong with no bank debt. Cash generated from operations in Q1 2023 was SAR 403.2 million versus SAR 420.1 million in Q1 2022. As of 31 March 2023, the Company had a cash balance of SAR 705.2 million, which represented a decrease of 9.4% as compared to the same quarter last year.

Significant changes in the Statement of Financial Position as at 31 March 2023 were noted as follows:

1. Non-current assets increased by 4.8% in Q1 2023 driven mainly by the increase in Property and equipment and Right-of-use assets.
2. Current assets increased by 17.5% in Q1 2023 mainly due to an increase in inventories and Cash and cash equivalents.
3. Current liabilities were increased by 25.4% in Q1 2023 mainly due to an increase in trade payables.
4. Non-current liabilities increased by 3.4% in Q1 2023 mainly due to lease contracts modifications.
5. Shareholders’ equity increased by 4.0% driven by the increase in retained earnings.