Nahdi shifts gear to growth as Q2 2024 revenue increases 10.8% yoy

Financial Performance

Nahdi reported positive revenue growth for the third consecutive quarter, driven by its 8.9% retail growth and reaping the benefits of its facilitated investments into the Company’s strategic growth areas. Healthcare and UAE delivered 100.1% and 186.8% revenue increases, respectively. The Company’s retail performance is driven by the ongoing pharma growth momentum and its investment into front shop categories.

As an outcome, Nahdi experienced strong revenue growth for the second quarter, of 10.8% versus 7.2% in Q1 2024 and 3.6% in Q4 2023. Total revenue increased by SAR 241.2 million in Q2 2024, reaching SAR 2,472.7 million, compared to SAR 2,231.5 million for the same quarter last year. For the first half of the year, Nahdi recorded SAR 4,730.2 million in revenue, representing an increase of 9.1% or SAR 393.6 million versus SAR 4,336.5 million in H1 2023.

Nahdi’s investment in its emerging businesses is yielding strong results, with the Company experiencing accelerated growth in its online business. In the second quarter of 2024, the online business contributed 23.6% to total revenue, up from 16.4% during the same period last year, mainly driven by front shop categories. This growth was primarily driven by the expanded product assortment, with +8000 SKUs added to Nahdi Online during the first half of the year. Since Q2 2024, Guests in the UAE have enjoyed the same access to the full range of products as Nahdi’s Guests in Saudi Arabia. The increase in the online business revenue contribution reflects Nahdi’s ability to adapt to evolving consumer behaviours and leverage its digital capabilities to expand its reach, making it one of the leading e-commerce platforms in the region.

Nahdi strategically strengthened its market position in the region, opening 8 pharmacies in 2024 serving five Emirates in the UAE with revenues soaring by 186.8%.

During the second quarter, Nahdi expanded its polyclinic network by opening a new location in Yanbu. With a total of 8 polyclinics now in operation, the Company served over 680,000 Guests in the first half of the year compared to 460,000 Guests in the same period last year, resulting in a 100.1% revenue increase.

In the second quarter of 2024, the Company delivered a solid improvement in its operating expenses as a percentage of revenue which improved by 1.1% to reach 27.1%, compared to 28.2% during the same quarter last year. This improvement in operating expenses demonstrates the Company’s ongoing commitment to operational efficiency and cost optimization, which fuels Nahdi’s continued growth and allows the Company to facilitate the implementation of its strategic investments, all while maintaining its gross margin at 38% for the first half of the year 2024.

Nahidi’s balance sheet remains healthy, with a strong cash position and zero debt. Returns from Islamic Murabaha time deposits further support the company’s profitability. Moreover, the Company sustains a healthy cash flow supported by strong operational fundamentals and efficient working capital management.

Due to Nahdi’s strong financial performance, its Board of Directors approved a cash dividend distribution of SAR 2.50 per share for the first half of 2024.

The quarterly results underscore Nahdi’s success in adapting to evolving market and consumer trends with resilience and agility. By swiftly responding to changing dynamics, the company has successfully positioned itself for sustained growth and profitability in the future.