‎“Al-Hokair Group” records SR 34 mln during Q1, an increase of ‎‎7%‎

The Abdul Mohsen Al-Hokair Group for Tourism and Development recorded losses after zakat and tax of 34 million riyals during the first quarter, compared to losses of 32 million riyals in the same quarter of last year, an increase of 7%. This came after today’s announcement of the preliminary financial results for the period ending in 2023- 03-31 (three months).

The operational loss amounted to 17 million riyals in the first quarter, compared to a loss of 18 million riyals in the same quarter of the previous year, a decline of 2%.

As for the total profit, it amounted to 25 million riyals in the first quarter, compared to 27 million riyals in the same quarter of the previous year, with a decrease of 8%.

The loss per share in the current period amounted to 1.09 riyals, compared to a loss of 1.02 riyals in the same period last year.

The reason for the (decrease) in the net profit during the current quarter compared to the same quarter of the previous year is due to the increase in the net loss of the group during the current quarter by SAR 2.35 million (7.4%) compared to the same quarter of the previous year, as the group recorded a net loss with a value of 34.34 million Saudi riyals during the current quarter, compared to a net loss of 31.99 million Saudi riyals during the same quarter of the previous year, as the financial performance of the group was according to the following details

1- The group’s revenues decreased by 8.54 million Saudi riyals (5%), as it achieved revenues of 163.84 million Saudi riyals compared to revenues of 172.38 million Saudi riyals, and the performance of its main sectors was as follows

1.1- Hotel sector revenues decreased slightly and amounted to 0.49 million Saudi riyals (0.5%), as the sector achieved revenues of 96.7 million Saudi riyals compared to revenues of 97.19 million Saudi riyals, which mainly resulted from the group’s policy to close some Low-performance hotels to improve profitability margins, as well as the evacuation of some hotels due to the state expropriating their ownership from the lessor (the main shareholder) for the public interest.

1.2- Revenues from the entertainment sector decreased by 6.57 million Saudi riyals (10%), as the sector achieved revenues of 59.33 million Saudi riyals compared to revenues of 65.89 million Saudi riyals, which resulted mainly from the impact of revenues on the seasonality of business due to The beginning of the holy month of Ramadan at the end of the current quarter, which caused a significant decrease in the number of visitors to entertainment centers compared to the same quarter of last year, during which the holy month of Ramadan did not coincide.

1.3- Revenues from other sectors decreased by 1.48 million riyals, as these sectors generated revenues of 7.81 million Saudi riyals, compared to revenues of 9.29 million riyals.

2- The group’s total profit decreased by 2.26 million Saudi riyals (8.2%), as it achieved a total profit of 25.22 million Saudi riyals compared to a total profit of 27.48 million Saudi riyals, which resulted mainly from the decrease in group revenues and According to the following

2.1- The total profit of the hotel sector increased by 5.12 million Saudi riyals (30.4%), as the sector achieved a total profit of 21.97 million Saudi riyals compared to a total profit of 16.85 million Saudi riyals, which resulted despite the decrease in the sector’s revenues Due to the closure of some low-performing hotels, which improved the profit margins of the sector

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2.2- The total profit of the entertainment sector decreased by 5.83 million riyals (50.9%), as the sector achieved a total profit of 5.63 million Saudi riyals compared to a total profit of 11.46 million riyals, which resulted mainly from the decrease in the sector’s revenues

2.3- The total loss for other sectors increased by 1.54 million Saudi riyals (183.3%), as the sectors achieved a total loss of 2.38 million Saudi riyals, compared to a total loss of 0.84 million Saudi riyals, which resulted mainly from the decrease in the revenues of those sectors. sectors

3- The group’s operating losses decreased slightly and amounted to 0.3 million Saudi riyals (1.7%), as it recorded operating losses of 17.19 million Saudi riyals, compared to operating losses of 17.5 million Saudi riyals, which resulted despite the decrease in gross profit. Because of the group’s continuous efforts to improve the efficiency of its operations and reduce its operating expenses

4- The net loss of the group increased by 2.35 million riyals (7.4%), as it recorded a net loss of 34.34 million riyals compared to a net loss of 31.99 million riyals, which resulted despite the decrease in operating losses due to the increase in the cost of Financing resulting from an increase in the reference lending rate between Saudi banks, SAIBOR

5- The total comprehensive loss of the group increased by 1.95 million Saudi riyals (6%), as it recorded a total comprehensive loss of 34.78 million Saudi riyals compared to a total comprehensive loss of 32.83 million Saudi riyals, which resulted mainly from the increase in net loss

The second item – loss per share: the loss per share amounted to 1.09 Saudi riyals per share as at the end of the current quarter of the year 2023 compared to a loss of 1.02 Saudi riyals per share as at the end of the same quarter of the previous year

Item Three – Shareholders’ Equity: The total shareholder’s equity amounted to 255.38 million Saudi riyals as at the end of the current quarter of the year 2023 compared to 339.21 million Saudi riyals as at the end of the same quarter of the previous year, with a decrease of 83.83 million Saudi riyals (25 %

Item Four – Accumulated Losses: The accumulated losses amounted to 58.96 million riyals as at the end of the current quarter of the year 2023, which represents 18.7% of the group’s subscribed capital, at a value of 315 million riyals.

The reason for the decrease in net profit during the current quarter compared to the previous quarter is due to the first item:

– The net loss of the group increased during the current quarter by 8 million riyals (30.3%) compared to the previous quarter, as the group recorded a net loss of 34.34 million riyals during the current quarter compared to a net loss of 26.35 million riyals. During the previous quarter, the financial performance of the group was according to the following details:

1- Revenues decreased by 36.12 million riyals (18.1%), as the group achieved revenues amounting to 163.84 million riyals compared to 199.95 million riyals, and the performance of its main sectors was as follows:

1.1- An increase in hotel sector revenues by 2.14 million riyals (2.3%), as the sector achieved revenues amounting to 96.7 million riyals, compared to 94.56 million riyals.

1.2- Revenues from the entertainment sector decreased by 37.32 million riyals (38.6%), as the sector achieved revenues amounting to 59.33 million riyals compared to 96.65 million riyals, which resulted mainly from recording revenues of 26 million Saudi riyals for the implementation of projects that were awarded On the group during the previous quarter of last year, as well as the revenues of the current quarter were affected by the seasonality of activity and the entry of the holy month of Ramadan at the end of the quarter, which caused a significant decrease in the number of visitors to entertainment centers

1.3- Revenues from other sectors decreased slightly, reaching 0.93 million riyals, as those sectors achieved revenues amounting to 7.81 million Saudi riyals, compared to revenues amounting to 8.74 million riyals.

2- Gross profit decreased by 14.66 million Saudi riyals (36.8%) as the group achieved a total profit of 25.22 million Saudi riyals compared to a total profit of 39.87 million Saudi riyals, mainly resulting from the decrease in group revenues.

2.1- The total profit of the hotel sector decreased by 1.79 million riyals (7.5%), as the sector achieved a total profit of 21.97 million riyals compared to a total profit of 23.76 million riyals, which resulted despite the increase in sector revenues.

2.2- The total profit of the entertainment sector decreased by 10.45 million riyals (65%), as the sector achieved a total profit of 5.63 million riyals compared to a total profit of 16.08 million riyals, mainly due to the decrease in the sector’s revenues

2.3- The total loss of other sectors increased by 2.41 million riyals, as the sectors achieved a total loss of 2.38 million riyals, compared to a total profit of 0.03 million riyals, which resulted mainly from the decrease in the revenues of those sectors.

3- Operational losses increased by 9.1 million Saudi riyals (111.8%), as the group recorded operating losses of 17.19 million Saudi riyals compared to operating losses of 8.12 million Saudi riyals, mainly resulting from a decrease in gross profit.

4- The net loss increased by 8 million riyals (30.3%), as the group recorded a net loss of 34.34 million riyals compared to a net loss of 26.35 million riyals, mainly due to the increase in operating losses.

5- The total comprehensive loss increased by 8.25 million Saudi riyals (31.1%), as the group recorded a total comprehensive loss of 34.78 million riyals compared to a total comprehensive loss of 26.53 million riyals, mainly resulting from an increase in net income.

As stated in the external auditor’s report: “We draw attention to note 2 on the accompanying condensed consolidated preliminary financial statements, which indicates that the group incurred a net loss of 34.34 million Saudi riyals for the three-month period ending on March 31, 2023, which resulted in accumulated losses. of SAR 58.96 million as on March 31, 2023. In addition, the Group’s current liabilities exceeded its current assets by SAR 261.30 million as on that date. The Group relies mainly on the successful implementation of its business plans to generate sufficient cash flows to enable it to meet its obligations when they fall due and to maintain the continuity of its operations without significant curtailment. These conditions, together with other matters described in note 2, indicate the existence of a material uncertainty that may cast significant doubts about the Group’s ability to continue as a going concern. Our opinion has not been modified in respect of this matter.”

The company said that during the current period, the group re-evaluated the presentations of some items in the financial statements. This was to ensure that the proposed disclosures were in compliance with the requirements of IAS 1 “Presentation of Financial Statements” as adopted in the Kingdom of Saudi Arabia. As a result, some comparative numbers have been adjusted to conform to the changes in presentation in the current period and as indicated in the notes to the financial statements.