Maharah’s Annual Profits Decline 15% to SAR 96 Million in 2023

Maharah Human Resources Co. reported a decrease in net profit to SAR 96 million for the year ending December 31, 2023, a 15% drop from SAR 113 million in 2022. This was revealed following the disclosure of the company’s annual financial outcomes for the year.

The company’s operating profit also saw a decrease, settling at SAR 95 million for the year, down from SAR 108 million in 2022, marking a 12% decline. The earnings per share fell to SAR 2.14, compared to SAR 2.51 the previous year.

Despite these challenges, Maharah’s revenue saw an uplift, increasing by SAR 206 million in 2023 over the previous year. This growth was attributed to a 12% increase in company revenue, buoyed by performance improvements in key sectors. Notably, the corporate and hourly services (Khidmah) segments saw revenues surge by 22% and 14%, respectively, thanks to a significant uptick in workforce numbers by 13% and 19%, respectively, to meet service demand. Strategic contract revenues in the corporate segment also contributed to this increase.

However, the revenue uplift was partially offset by a 15% decrease in the individual sector (Permanent Services) due to regulatory price ceilings and a temporary recruitment suspension from Indonesia, which was lifted at the start of 2024. Furthermore, facility management revenues dipped by 18% following the restructuring of some underperforming contracts.

The consolidated net income attributable to shareholders fell by 14.8% year-over-year, mainly impacted by various factors despite a 22% gross profit increase in the corporate sector. The profit margin was adversely affected by underperformance in the individual segment, along with the facility management, logistics, and home healthcare sectors, resulting in a modest 3% net increase in gross profit over the previous year.

Other notable financial activities included profits from investments in associate companies (Care Shield and SMS Company) amounting to SAR 38.7 million, reflecting the net impact after amortizations of their intangible assets following a purchase price allocation exercise completed in 2023.

The company also faced increased provisions for doubtful debt by SAR 19 million and higher financing costs, which soared to SAR 44 million due to long-term loans for acquisitions completed in the third quarter of 2022. Additionally, there was a decrease in income from financial instruments by SAR 2.5 million.

In 2022, Maharah finalized acquisition transactions for significant stakes in associate companies, which were initially recognized at their purchase cost. Following the purchase price allocation exercise conducted in 2023 as per IFRS standards, adjustments were made reflecting the fair value of these investments and their identifiable assets and liabilities as of the acquisition date.

Details of an upcoming conference call to discuss these results will be made available on Maharah’s website in the investor relations section, alongside the interim financial statements and accompanying presentation.

For more details, please visit: Maharah’s Investor Relations and the Maharah investor relations mobile application.