‎“Fitness Time” profits jumped 100% during Q2, to SR 72.5 ‎million ‎

Leejam Sports Company (Fitness Time) announced an increase in net profit after zakat and tax in the second quarter to 72.5 million riyals, compared to 36 million riyals in the same quarter of last year, an increase of 101%. This came after today’s announcement of the preliminary financial results for the ending period on 06-30-2023 (6 months).

The operating profit amounted to 91.2 million riyals in the second quarter, compared to 51.6 million riyals in the same quarter of last year, an increase of 76.7%.

The total profit amounted to 124.2 million riyals in the second quarter, compared to 78 million riyals in the same quarter of last year, an increase of 59.2%.

Earnings per share in the 6-month period amounted to 2.5 riyals, compared to 1.57 riyals in the same period last year, while the total shareholders’ equity for the 6-month period amounted to 938.5 million riyals, compared to 817.4 million riyals in the same period last year, at a rate of 20.3. %

The reason for the increase in net profit for the second quarter of the year 2023 AD by 101% compared to the second quarter of the year 2022 AD is mainly due to:

Revenues increased by 30%, driven by the increase in the number of subscribers and operating centers, as 12 new centers were opened since the end of the second quarter of 2022 AD. The increase in revenues was as follows:

– Membership revenue increased by 32% compared to the second quarter of 2022AD. Personal training revenue increased by 33% compared to the second quarter of 2022AD.

The second quarter of 2023 also included recording a profit of 3.2 million riyals from short-term Murabaha.

This came despite the following:

– An increase in the total cost of revenues by 15% compared to the same quarter of the previous year as a result of the addition of 12 additional centers since the end of the second quarter of 2022 AD, in addition to the increase in cleaning and maintenance costs due to the high number of subscribers and the continuation of the sports club renewal program “Nadeek Change” And the increase in the number of centers operating over a 24-hour period

– The increase in the financing cost due to the increase in interest rates compared to the second quarter of the previous year

The reason for the increase in net profit for the second quarter of the year 2023 by 16% compared to the previous quarter is mainly due to the increase in revenues by 9%, driven by the increase in the number of subscribers as a result of the concentrated efforts in all sectors of the company and the institutional approach to managing the company’s promotional activities. In addition to the opening of 3 new centers since the end of the first quarter of 2023

This came despite the increase in the cost of financing as well as the increase in the total cost of revenues due to the increase in the number of operating centers and subscribers.

Leejam Sports Company (Fitness Time) recorded a net profit of 135.1 million riyals for the six-month period ending on June 30, 2023, an increase of 65% compared to the same period of the previous year. The reason for this increase is mainly due to the increase in revenues, driven by the increase in the number of operating centers, as 12 new centers were opened since the end of the second quarter of 2022 AD. The increase in revenues was as follows:

– An increase in membership revenues by 26% compared to the first half of 2022

– An increase in personal training revenues by 31% compared to the first half of 2022

The first half of 2023 also included recording a profit of 6.9 million riyals from short-term Murabaha.

This came despite the following:

– An increase in the total cost of revenues by 15% compared to the first half of 2022 AD due to the addition of 12 additional centers since the end of the second quarter of 2022 AD in addition to the increase in cleaning and maintenance costs due to the high number of subscribers and the continuation of the sports club renewal program “Nadeek Change” As 8 centers were renewed during the first half of 2023 AD, as well as the increase in the number of centers operating over a 24-hour period.

– The increase in the financing cost due to the increase in interest rates compared to the first half of the previous year

The company drew attention to clarification (18) about the condensed consolidated preliminary financial statements, as mentioned in it, that during the year ending on December 31, 2021, the management received a linking order from the Zakat, Tax and Customs Authority (“the Authority”) on the basis that part of the profits The company for the years 2015, 2016, 2017 and 2018 was subject to income tax. Our conclusion regarding this matter has not been modified

Reclassification of some comparative figures have been reclassified and restated for the purpose of better presentation.

The first half of 2023 witnessed a remarkable improvement in the company’s financial performance compared to the same period in the previous year, as its revenues increased to 579 million riyals, at an annual growth rate of 25%, and net profits jumped to 135 million riyals. An increase of 65% year on year. The company continues to achieve strong quarterly growth year on year since the third quarter of 2022 AD. This outstanding performance throughout the first half of the year was mainly driven by the growth in the number of operating centers, and the strengthening of business management mechanisms to reduce the negative effects of business seasonality, in addition to achieving lower numbers in the comparative period, despite the increase in financing costs.

The most prominent financial results:

– Total revenues grew by 25% on an annual basis to 579 million riyals during the first half of 2023 AD.

– Net profits grew by 65% on an annual basis to 135 million riyals during the first half of 2023 AD. ‏

– Profit growth before calculating depreciation, amortization, interest and zakat expenses during the first half of 2023 AD by 30% on an annual basis to 290 million riyals.

Subscription and membership revenues grew by 26% to 502 million riyals

Revenues from the personal training sector grew by 31% to 63 million riyals. ‏

– The growth in revenues of the men’s centers and lounges sector by 23% to 434 million riyals during the first half of 2023 AD.

– The revenues of the women’s centers and lounges sector grew by 30% to 140 million riyals during the first half of 2023 AD.

The most important operational results:

The men’s centers and lounges sector maintained its role as a major growth engine during the first half of 2023 AD, in parallel with the continued growth of the women’s centers and lounges portfolio and its membership base. Seven new centers were launched in the first half, in addition to expanding the company’s portfolio by including ten specialized gyms. ‏

Leejam achieved exceptional results during the year 2022 AD, which enabled it to continue implementing its strategic plan, the results of which included continued strong and stable growth in various seasons, and recording a noticeable increase in the number of members during the first half of 2023 AD compared to the second half of the year. the past. Memberships and subscriptions for the men’s sector, the women’s sector, and the corporate sector recorded higher growth rates during the first half of 2023 AD compared to the first half of 2022 AD, with a significant increase in the number of training sessions as shown below:

– The total number of active Fitness Time centers reached 163 centers, while the number of members reached 367 thousand members.

– The number of operating men’s fitness time centers reached 116 centers, while the number of members reached 221 thousand members.

– The number of active women’s fitness time centers reached 47, while the number of members reached 69 thousand members.

– The number of members of the corporate sector at the end of June 2023 AD reached 77 thousand members.

– The number of group classes offered in Fitness Time centers increased during the first half of 2023 AD to 147 thousand classes, an increase of 26% compared to the first half of the previous year, and the number of participants in classes increased by more than 170%, recording 1.25 million posts.

On this occasion, Adnan bin Abdullah Al-Khalaf, CEO of Leejam Sports Company, said: “The strong and exceptional performance during the first half of this year comes as a culmination of the success of Leejam’s strategy in developing its products, services and brand, and as an extension of the great progress we have made in 2022. The management’s strategy to support growth, flexibility and maximizing value for the benefit of shareholders was reinforced by further expansion of the group’s business during the first half of the year across many markets and areas within the sports, fitness and health sectors – in a move that would consolidate the company’s position and enable it to maintain To continue its pioneering role in promoting a healthy lifestyle and contributing to raising the quality of life for all. In this context, the accession of ten specialized gyms in Riyadh to the company’s portfolio, the strategic partnerships that have been concluded, and the new products and services that have been developed, inaugurate a new chapter in Leejam’s endeavors to implement its diversification strategy, protect its competitive advantages, and provide all the ingredients that ensure its continuity on the path of growth during the second half of the year 2023 AD.