Bin Dawood Holding Profits Decrease to SR70 mln during 3Q, by 10%

Bin Dawood Holding Company net profit after zakat and tax decreased to SR70.24 million during the third quarter, compared to SR78.65 million during the same quarter of the previous year, at a rate of 10.69%.

This came after BinDawood Holding Co. announced on Tuesday its interim financial results for the period ending on 2021-09-30 (nine months).

The operational profit amounted to SR95.46 million during the third quarter, compared to SR86.85 million during the same quarter of the previous year, an increase of 9.9%.

The gross profit amounted to SR397.29 million during the third quarter, compared to SR356.27 million during the same quarter of the previous year, an increase of 11.5%.

The net profit after zakat and tax during the current period amounted to SR227.35 million, compared to 390.33 million riyals during the same period of the previous year, a decrease of 41.75%.

Revenue remained unchanged in Q3 2021 versus Q3 2020. The sales contribution from stores near the vicinity of holy mosque increased due to resumption of local pilgrims compared to Q3 2020. This increase was off-set against drop in sales from other stores due to easing of travel restrictions during summer holiday out of the Kingdom.

The gross profit increased by 11.5% versus Q3 2020 from SAR 356.3 million to SAR 397.3 million. The significant increase is a result of procurement efficiency and careful inventory management.

Operating expenses were SR 304.1 million in Q3 2021 versus SR 272.2 million in Q3 2020. The increase of 11.7% in expenses is mainly due to termination of Covid related governmental waivers and additional employment costs arising from strengthening the executive management team.

Net profit for Q3 2021 was SR 70.2 million which is 10.8% lower than Q3 2020. This was mainly because of increase in operating expenses by 11.7% as explained above in Q3 2021 as compared to Q3 2020.

Revenue for Q3 2021 declined by 4% versus Q2 2021 due to easing of travel restrictions out of the country which led to lower footfall in stores during the third quarter.

Gross profit was decreased mainly due to decrease in revenue. However, Gross margin percentage increased from 35.6% to 36.9% due to procurement efficiency and careful inventory management.

Operating expenses increased by 6.9% from SAR 284.4 million to SR 304.1 million due to increase in employment cost to strengthen the executive management team and impact of cost associated with new store opening in the month of Aug 2021.

Net Profit reduced by 26.1% in Q3 2021 versus Q2 2021 mainly due to result of the impact of fixed costs following a decline in revenue and increase in operating expenses.

Revenue for the nine months period of 2021 decreased by 17.8% compared to the same period last year, mainly due to the revenue for the first six months of 2020 being unseasonably higher due to i) the effect of pantry buying in response to the pandemic, ii) bulk buying in anticipation of the change in VAT on 1 July and iii) restrictions on international travel.

Gross margin improved by 2.7% from 32.5% to 35.2% bearing testimony to the Company’s ability to careful inventory management, stringent wastage and shrinkage controls, efficient pricing and procurement efficiency.

Operating expenses were SR 877.1 million in 9M 2021 versus SAR 869.8 million in 9M 2020. Despite the absence of Covid related governmental waivers and the higher costs associated with new branch openings since October 2020, there was a little increase in operating expenses due to the stringent cost containment measures introduced by management to offset the effect in costs.

The Company’s net profit margin reduced by 2.9% from 9.7% in 9M 2020 to 6.8% in 2021 due to a greater impact of fixed costs due to a decline in revenue.