Jarir Marketing profits decrease to SAR 156 million during Q2 by 12%

Jarir Marketing Company net profit after zakat and tax decreased to SAR 156 million during the second quarter, compared to SAR 177 million in the same quarter of last year, by 12%. This came after the announcement on Sunday of the interim financial results for the period ended on 30.06.2023 (6 months).

The operating profit amounted to SAR 175 million during the second quarter, compared to SAR 192 million in the same quarter of the previous year, a decline of 9%.

The net profit after zakat and tax during the 6-month period amounted to SAR 404 million, compared to SAR 429 million in the same period last year, a decrease of 6%.

Earnings per share in the current period amounted to SAR 0.34, compared to SAR 0.36 in the same period last year.

The reason of the (decrease) in the net profit during the current quarter compared to the same quarter of the last year is attributable to:

– Despite the increase of sales at 21.1% due to sales increase of almost all sections, especially smartphones and related accessories, computers and video games sections, the gross profit witnessed a decrease of 3.6% due to discounts on sales prices to promote sales especially smartphones and computers, and due to the change in the sales mix towards the relatively less profitable sections.

– Decrease in other income compared to the same quarter of the previous year, which included the recognized profit resulting from the sale of the company’s property in Rakah district in Al-Khobar, amounting to around 10 million Saudi riyals.

– Increase in financing cost as a result of increased borrowing.”

The reason of the (decrease) in the net profit during the current quarter compared to the previous quarter of the current year is attributable to:

The second quarter usually achieves the lowest quarterly sales during the year. Sales for most departments declined compared to the previous quarter of the current year, which achieved record quarterly sales, supported by smartphones sales. The gross profit decreased by a greater percentage than the decrease in sales, as the gross profit decreased by 26% due to discounts on sale prices to promote sales, especially smart phones and computers.

– Decrease in other income.

– Increase in financing cost as a result of increased borrowing.”

The reason of the (decrease) in the net profit during the current period compared to the same period of the last year is attributable to:

– Despite the increase in sales by 19.9% as a result of sales increase of most sections, especially smartphones and related accessories, computers and video games, the gross profit witnessed a decrease of 1.8% due to discounts on sales prices to promote sales, especially smartphones and computers, and due to the change in the sales mix towards the relatively less profitable sections.

– Increase in selling and marketing expenses to promote sales.

– Decrease in other income.

– Increase in financing cost as a result of increased borrowing.”

The company stated that these estimated financial results for the period ended June 30, 2023 are prepared by the management of the Company and have not yet been reviewed by the external auditor.

Noting that “The current quarter did not witness a significant decrease in the comprehensive income compared to the net profit, but the current period and the similar period of the last year showed a decrease in the comprehensive income compared to the net profit mainly due to currency differences losses in the first quarter of the current year and last year related to the subsidiary company in Egypt as a result of the Egyptian authorities’ decision to devalue the Egyptian pound against foreign currencies, including the Saudi riyal, which started in March 2022.

Earnings per share for all presented periods are calculated based on the number of shares of the company amounting to 1,200 million shares after splitting each share into ten shares as decided by the extraordinary general assembly held on May 30, 2023.

Two new showrooms were opened during this period, on 24.02.2023 in the University City area in the Emirate of Sharjah in the United Arab Emirates, and on 10.04.2023 in the Avenues Mall in Al-Rai area in Kuwait. The showroom located in Al-Rashid Mall in Al-Khobar was closed as of 24.02.2023, as it was replaced by another showroom in the same complex with a larger area which was opened on 16.04.2023.”