‎“Americana” profits jumped 76% during Q2, to SR 325 million ‎

The net profit after zakat and tax of Americana International Restaurants PLC jumped to 325 million riyals during the second quarter, compared to 185 million riyals in the same quarter of last year, by 76%. This came after today’s announcement of the preliminary financial results for the period ending in June 30, 2023 AD.

Operational profit amounted to 376 million riyals in the second quarter, compared to 212 million riyals in the same quarter of last year, with a growth of 77%.

As for gross profit, it amounted to 1.29 billion riyals in the second quarter, compared to 1.11 billion riyals in the same quarter of last year, an increase of 16%.

The net profit after zakat and tax during the 6-month period amounted to 542.9 million riyals, compared to 455 million riyals in the same period last year, an increase of 19%.

Earnings per share in the current period amounted to 0.06 riyals, compared to 0.05 riyals in the same period last year.

The reason for the increase in net profit during the current quarter compared to the same quarter of the previous year is due to an increase in net income by 16.7% in the second quarter of the year 2023 compared to the second quarter of the year 2022, supported by sales growth, due to the increase in growth over Like-for-like basis, in addition to the continued expansion of the restaurant portfolio and improved gross profit margin. This growth comes after the adjustment resulting from the registration of a tax payment in Egypt of 95.6 million Saudi riyals (25.5 million US dollars) in the second quarter of 2022.

The reason for the increase in net profit during the current quarter compared to the previous quarter is due to the increase in sales on a like-for-like basis, the Eid season and the company’s restaurant portfolio expansion program.

The reason for the increase in net profit during the current period compared to the same period of the previous year is due to the increase in sales on a like-for-like basis, in addition to the continuous expansion of the company’s restaurant portfolio. The rise in income was also supported by the registration of a one-off tax payment for a tax settlement in Egypt amounting to SAR 95.6 million ($25.5 million) in the second quarter of 2022. The growth in net income came despite the increase in cost margins, especially in the first quarter of 2023, in addition to higher consumption charges due to the expansion of new stores.

Americana’s strong year-on-year increase in revenue was supported by the continued commitment to expand its diversified restaurant portfolio in its operations in the Middle East, North Africa and Kazakhstan. The company added 108 new restaurants during the first half of the year 2023, bringing the total number of its restaurants on June 30, 2023 to 2,277 restaurants.

Revenue growth was supported by a positive development in sales on a like-for-like basis, as the comparison measures the revenue growth of restaurants that were operating over a 12-month period. On a like-for-like basis, revenue increased by 7.2% compared to the first half of 2022, thanks to the good performance of the KFC and Pizza Hut brands in particular.

The company achieved revenue growth of 13.5% in the second quarter of 2023, compared to the second quarter of 2022, supported by the positive impact of the decrease in the number of Ramadan days during the quarter.

EBITDA for the first half of the year was SAR 1,094 million ($291.7 million), an increase of 7.7% compared to the first half of 2022, and the company maintained a strong margin for adjusted earnings before Interest, tax, depreciation, and amortization increased by 23.5% despite an increase in carry-over inventory costs compared to the first half of 2022. Americana Restaurants increased its inventory levels in 2022 strategically to prevent stock-outs and address global supply chain disruptions. The management succeeded in gradually reducing the high-cost inventory in the first half of 2023, which will support higher margins in future periods, supported by lower commodity prices.

Americana Restaurants has maintained a solid balance sheet and financial position. With adjusted free cash flow for the first half of 2023 of SAR 416 million ($110.9 million) with a cash conversion rate of 58.4%, this strong balance sheet helps the company achieve its future growth and capital expenditure targets with Supporting the declared dividend policy

Americana Restaurants is well positioned to pursue growth across the markets in which it operates. The company expects to open 250 to 260 net new restaurants by the end of the year, with an eye on growth opportunities across its markets, particularly Saudi Arabia. During the second half of the year, the company will continue to gradually reduce strategic stocks, which were built during 2022 to counter global supply chain disruptions, supported by lower commodity prices, as the company looks to expand profit margins. As for Egypt, the company’s focus remains on improving operations, expanding franchisor support, and enhancing cost efficiencies as it proactively addresses currency challenges in the country. The company is also in a strong position to continue expanding its new brands, including Pizza Hut and Pets Coffee, in Saudi Arabia. The company remains committed to developing its digital capabilities and improving external revenue channels.