Theeb profits jump 72.5% to SR43 mln in Q2

The net profit after zakat and tax of Theeb Rent a Car Co. jumped to SR43.05 million during the second quarter, compared to SR24.9 million in the same quarter of the last year, at a rate of 72.5%. This came after Theeb announcement on Tuesday about the preliminary financial results for the period ending 30-06-2022 (6 months).

The operational profit amounted to SR52.6 million in the second quarter, compared to SR33.1 million in the same quarter of the last year, up 58.9%.

The net profit in the 6-month period amounted to SR85.6 million, compared to SR50.9 million in the same period last year, with increase of 68%.

Profits per share in the current period amounted to SR 1.99, compared to SR 1.18 in the same period last year.

The net profit increased by 72.5% from SAR 25.0m in Q2-2021 to SAR 43.1m in Q2-2022, mainly attributed to improved performance across all business segments.

Short term rental revenues increased by 43.7% reaching SAR114.9m in Q2-2022 from SAR79.9m in Q2-2021. This is due to an increase in demand for short term car rentals due to increased commercial activity driven by Saudi Seasons and other social events during the second quarter of 2022 and easing of COVID-19 related precautionary measures. Higher net profit and net margin in Q2-2022 is also attributed to increased fleet efficiency for the short term rental segment.

Long term rental revenues increased by 19.0% reaching SAR 77.8m in Q2-2022 from SAR 65.4m in Q2-2021, attributed to new long term contracts obtained and the renewals of its expiring contracts. The lease segment continued to show stable growth YoY as the company has focused its efforts of providing exceptional service to its corporate clients resulting in continued renewals of its expiring contracts as well as obtaining newer contracts.

In the Car sales segment, though the overall revenue slightly dropped by 2.9% in Q2-2022 compared to Q2-2021 due to lower number of motor vehicles sold, the gross margin increased by SAR 3.2m as the company was able to secure exceptional resale values for its used cars sold during Q2-2022, while ensuring that the company updates its fleet in a timely manner.

The company’s operational profit also grew by 58.9% in the second quarter of 2022, reaching SAR 52.7m from SAR33.2m in same quarter in 2021.

Moreover, the net profit increase is also attributed to increased gross profit margin which increased to 37.7% in Q2-2022 from 30.2% in Q2-2021, mainly driven by increased utilization of the short term rental segment and increased resale values in the car sales segment.

The net profit increased slightly by 1.1%, reaching SAR 43.1m in Q2-2022 compared to SAR 42.6m in Q1-2022. The following factors contributed to the increase:

1. Upside contributors included increased short term rental revenue which increased by 2.5%, to reach SAR 114.9m in Q2-2022.
2. Long term lease revenue increased by 2.9% compared to the previous quarter, showing steady growth.
3. Revenue from car sales segment increased by 2.0% despite 7.4% reduction in the number of cars sold, as the company was able to secure exceptional resale values for its used cars.

Operational Profit also increased by 4.4%, reaching SAR 52.7m in Q2-2022 compared to SAR 50.5m in Q1-2022.

The net profit showed an impressive increase by SAR 34.7m (68.2%), reaching SAR 85.7m in H1-2022 compared to SAR 50.9m in H1-2021. The main drivers of growth were increased demand for short term rental and continuous growth in the long term lease segment.

Short term rental revenue increased by 44.6%, reaching SAR 226.9m in the first half of 2022 compared to SAR 156.9m in the first half of 2021. Short term rental in H1-2022 has shown strong demand led-growth, driven by various Saudi Seasons. Other factors included company’s responsiveness to identify and capture market demand across various geographic locations in the Kingdom through new branch openings. This is evidenced by increased rented fleet in the short term rental segment. Gross margins have improved significantly resulting from impressive utilization of its rental fleet.

Long term lease revenue increased by SAR 23.4m (18.0%) to reach SAR 153.4m in H1-2022 compared to SAR 130.0m in the same period last year. This is a result of continuous efforts to improved customer experience and level of service, resulting in high contract retention and newer contracts in 2022.