‎“Theeb” profits up 97% during Q3 to SR54 mln

Theeb Rent a Car Co. revealed an increase in net profit after zakat and tax in the third quarter to 53.7 million riyals, compared to 27.3 million riyals in the same quarter of last year, at a rate of 96.6%, this came after today’s announcement of the preliminary financial results for the period ending on September 30 2022 (nine months).

The operational profit amounted to 64.3 million riyals in the third quarter, compared to 33.6 million riyals in the same quarter of the previous year, a growth of 91.2%.

The net profit after zakat and tax in the 9-month period amounted to 139.4 million riyals, compared to 78.2 million riyals in the same period last year, an increase of 78%.

The total shareholders’ equity “without minority rights” amounted to 641 million riyals in the current period, compared to 537.8 million riyals in the same period last year, an increase of 19%.

The earnings per share in the current period reached 3.24 riyals, compared to 1.82 riyals in the same period last year.

The net profit increased by 96.7% from SAR 27.4m in Q3-2021 to SAR 53.8m in Q3-2022 resulting from improved performance across all business segments.

Short term rental revenues increased by 29.8% reaching SAR125.6m in Q3-2022 from SAR96.8m in Q3-2021. The increase was due to an increase in demand for short term car rentals due to increased commercial activity driven by social events and opening of newer branches in strategic locations. The higher margin in Q3-2022 is also attributed to the company’s ability to acquire new car models while maintaining fleet utilization.

Long term rental revenues increased by 18.2% reaching SAR 79.8m in Q3-2022 from SAR 67.5m in Q3-2021, attributed to a mixture of new long-term contracts obtained and the renewals of its expiring contracts. The lease segment continued to provide a stable revenue stream for the company as the management focuses its efforts on providing outstanding service to its corporate clients.

The largest increase was witnessed in the Car sales segment, where the revenue increased by 149.1% in Q3-2022 compared to Q3-2021 due to the larger number of motor vehicles sold while ensuring extraordinary resale values during Q3-2022.

The company’s operational profit also grew by 91.3% in the third quarter of 2022, reaching SAR 64.3m from SAR33.6m in same quarter in 2021.

Moreover, the net profit increase is also attributed to increased gross profit margin which increased to 36.0% in Q3-2022 from 34.4% in Q3-2021, mainly driven by increased utilization of the short-term rental segment and increased resale values in the car sales segment.

The net profit increased significantly by 24.9%, reaching SAR 53.8m in Q3-2022 compared to SAR 43.1m in Q2-2022. The following factors contributed to the increase:

1. Positive contribution from the short-term rental segment where the revenue increased by 9.4%, to reach SAR125.6m in Q3-2022. This was mainly driven by the acquisition of newer car models to capture the increased demand in the market.
2. Revenue from Car sales segment increased significantly by 32.0% reaching a total revenue of SAR44.8m in Q3-2022, compared to SAR34.0m in Q2-2021, with extraordinary resale value.
3. Long-term lease revenue slightly increased by 2.5% compared to the previous quarter, showing steady growth.

Operational Profit also increased significantly by 22.0%, reaching SAR 64.3m in Q3-2022 compared to SAR 52.7m in Q2-2022.

The net profit showed an impressive increase by SAR 61.2m (78.0%), reaching SAR 139.4m in 9M-2022 compared to SAR 78.3m in 9M-2021. The main drivers of growth were increased demand for short-term rental, continuous growth in the long-term lease segment and extraordinary performance of the used car sales market.

Short term rental revenue increased by 39.0%, reaching SAR 352.5m in the first nine months of 2022 compared to SAR 253.7m in 2021. Short term rental in 9M-2022 has shown strong demand led-growth, driven by various social events, coupled with the company’s ability to cater to this demand by the acquisition of newer fleet. Other factors included the company’s responsiveness to identify and capture market demand across various geographic locations in the Kingdom through new branch openings. This is evidenced by the increased rented fleet in the short-term rental segment. Gross margins have improved significantly resulting from the impressive utilization of its rental fleet.

Long-term lease revenue increased by SAR 35.7m (18.1%) to reach SAR 233.1m in 9M-2022 compared to SAR 197.4m in the same period last year. This is a result of continuous efforts to improve customer experience and level of service, resulting in high contract retention and new contracts in 2022.