Al Othaim Markets Profits Decrease to SR45 mln during the 3Q by 26%

Abdullah Al Othaim Markets Company net profit after zakat and tax decreased to SR44.87 million during the third quarter, compared to SR60.69 million during the same quarter of the previous year, at a rate of 26%.

This came after Abdullah Al Othaim Markets Co. announced on Wednesday its interim financial results for the period ending on 2021-09-30 (nine months).

The operational profit amounted to SR56.25 million during the third quarter, compared to SR77.17 million during the same quarter of the previous year, a decrease of 27%.

As for the gross profit, it amounted to SR400 million during the third quarter, compared to SR411.6 million during the same quarter of the previous year, a decrease of 2.8%.

The net profit after zakat and tax during the current period amounted to SR150.48 million riyals, compared to SR285.5 million during the same period of the previous year, down 47%.

Profits per share during the current period amounted to SR 1.67, compared to SR3.17 during the same period of the previous 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 sales growth by 10.15% from existing and new branches. While the third quarter of the previous year witnessed notable drop in sales after raising VAT to15%, the sales in current quarter started to return to the normal levels.

Gross margin dropped down due to the hard promotions and the change in consumers’ behavior by focusing on discounted goods. In addition, G&A expenses increased due to recording advisory fees for the acquisition transaction related to the Fourth Milling Company and for enhancing competencies in senior positions, while the company benefited from government initiatives in the third quarter last year.

On the other hand, the real estate activity was positively affected after witnessing a decline in the same quarter last year. Also, the performance of the subsidiaries and associates improved as they were affected by the preventive measures in the third quarter last year.

Sales decline by 8.04% as a result of the Ramadan season in the previous quarter, despite the decrease in gross margin and the recovery of the real estate activity.

Sales decline by 7.41%, where the first half of previous year witnessed high demand for buying as a precaution to the preventive measures to limit the Corona virus outbreak. This is in addition to the high demand before raising VAT on 01/07/2020. Gross margin dropped down due to the increase in promotions and the change in consumers behavior by focusing on discounted goods. In addition, G&A expenses increased due to recording advisory fees for the acquisition transaction related to the Fourth Milling Company and for enhancing competencies in senior positions, while the company benefited from government initiatives in the same period last year.

On the other hand, the real estate activity was positively affected after witnessing a decline in the same period last year. Also, the performance of the subsidiaries and associates improved as they were affected by the preventive measures in the same period last year.

Some comparative figures have been restated to be consistent with the presentation of the current period.