Dur profits leap 582.6% to SR12.8 mln in 1Q

Dur Hospitality Co. announced that its profits after zakat and tax jumped 582.6% to SR 12.79 million in the first quarter of 2022 compared to 1.87 million during the same period of 2021.

This came after Dur Hospitality announcement on Monday of the preliminary financial results for the period ending on 31.03.2022 (three months).

The company’s operational profit rose to SR 23.3 million in the 1^st quarter of the current year from SR 1.78 million in the same period of the previous year.

Gross profit of Dur leaped 1162.2% to SR 35.20 million in the first quarter of this year from SR 2.78 million a year ago, while the profit per share climbed to SR 0.13 from SR 0.02.

The company’s net profit for the first quarter of 2022 amounted to 12.8 million riyals, increasing by 11 million riyals or 583% as compared to the same quarter of the previous year. The reason for the increase in net profit during the current quarter compared to the same quarter of the previous year is the increase in the revenues of the various segments of the Company, This is as a result of significantly easing the precautionary measures related to the spread of Corona Virus (COVID 19), the gradual return to the business sector, lifting the suspension of Umrah and increasing the capacity of the Grand Mosque. The Company also achieved an increase in net operating profit by 25.1 million riyals as compared to the same quarter of the previous year, 2021.

The growth in net profit for the current quarter compared to the previous quarter amounted to 20 million riyals, and the reason for this growth is the increase in the revenues of the various segments of the Company as a result of the significantly easing the precautionary measures related to the spread of Corona Virus (COVID 19), the gradual return to the business sector, the lifting of the suspension of Umrah and the increase in the capacity of the Grand Mosque.

Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor Opinion:

As stated in note (22.C) to the interim condensed consolidated financial statements, the Company is disputing the validity of two Interest Rate Swap derivative agreements (“the agreements”) with a local financial institution. During 2020, the Company filed a lawsuit (“the Lawsuit”) against the financial institution before the Committee for the Resolution of Securities Disputes (“the CRSD”). On 14 February 2022, the CRSD has issued its final decision for lack of jurisdiction of an authority and clarified that this lawsuit is subject to the Committee of Banking and Financial Disputes and Violations. On 10 March 2022, The Company filed a new lawsuit before the Committee of Banking and Financial Disputes and Violations to revoke the agreements. The new lawsuit is still at preliminary stage at the Committee of Banking and Financial Disputes and Violations and the potential outcome cannot be reasonably estimated at this stage. Had these agreements been accounted for in the interim condensed consolidated financial statements, the net income for the thee month period ended 31 March 2022 would be higher by SR 19.5 million (three month period ended 31 March 2021: net income would be higher by SR 8.8 million), the net equity as of 31 March 2022 would be lower by SR 47.1 million (the net equity as of 31 December 2021 and 1 January 2021: would be lower by SR 66.7 million and SR 83.1 million, respectively). Our opinion on the prior period review report has been qualified on the same matter.