Shaker’s profits increase to SAR 16.4 million in Q2

Al Hassan Ghazi Ibrahim Shaker Co. reported an increase in net profit for the second quarter to 16.4 million riyals, up from 15.8 million riyals in the same quarter last year, representing a 3.5% rise. This announcement came after the preliminary financial results for the period ending June 30, 2024, were released today.

Operating profit for the second quarter was 11.5 million riyals, compared to 19.8 million riyals in the same quarter of the previous year, a decline of 41.7%.

Total equity (after excluding non-controlling interests) amounted to 766.1 million riyals for the six-month period, compared to 697 million riyals in the same period last year, an increase of 9.9%.

Earnings per share for the current period reached 0.88 riyals, compared to 0.8 riyals in the same period last year.

Al Hassan Ghazi Ibrahim Shaker Co. (“The Company” or “Shaker”) achieved revenue of SAR 345.14 million in Q2-FY24, marking a 12.28% year-on-year (YoY) growth compared to SAR 307.39 million in Q2-FY23. This increase was primarily driven by robust sales in the HVAC solutions segment across its B2B and B2C offerings and consistent growth across the company’s brand portfolio, along with steady gains in market share.

Revenues from the HVAC solutions segment rose by 20.01%, which effectively offset a 8.25% decline in the Home Appliances segment.

Al Hassan Ghazi Ibrahim Shaker Co. (“The Company” or “Shaker”) reported a net profit of SAR 16.45 million in Q2-FY24, an increase of 3.54% compared to the net profit of SAR 15.89 million in Q2-FY23.

Revenue:

Revenues rose by 12.28% YoY to reach SAR 345.14 million in Q2-FY24, driven by strategic measures to broaden and diversify the product range, as well as optimizing the sales mix across the different sales channels.

The HVAC solutions segment revenue increased by 20.01% while the Home Appliance segment revenue decreased by 8.25%.

Gross Profit:

A growth by 12.07% YoY in Gross Profit to reach SAR 83.19 million in Q2-FY24, compared to SAR 74.23 million in Q2-FY23.

This improvement was driven by higher revenues and optimization of the portfolio mix, supported by efficient management of cost of goods sold (COGS), which helped preserve margins in an increasingly competitive market.

Operating Profit:

Income from operations declined by 41.79% YoY to SAR 11.53 million in Q2-FY24, compared to SAR 19.82 million in Q2-FY23.

This was mainly due to higher SG&A expenses and increased trade and other receivables impairment losses, reflecting the impact of key seasonal holidays on operations.

Net Profit:

Net profit attributable to equity owners registered a 3.54 % YoY increase, up from SAR 15.89 in Q2-FY23, to reach SAR 16.45 million in Q2-FY24 despite seasonal variations in sales and operations. This improvement was driven by higher revenues and gross profit, reduced finance costs, and an increase in the company’s share of profit from the LG-Shaker HVAC factory.

Al Hassan Ghazi Ibrahim Shaker Co. (“The Company” or “Shaker”) achieved revenue of SAR 345.14 million in Q2-FY24, a decline of 16.48% quarter-on-quarter (QoQ) from SAR 413.24 million in Q1-FY24, primarily due to seasonal fluctuations in consumer demand and typical market dynamics observed during this period.

The HVAC solutions segment demonstrated resilience with a modest growth of 1.91% QoQ, while the Home Appliances segment experienced a more pronounced impact from these seasonal factors, resulting in a 47.80% QoQ decline in revenue.

Shaker’s net profit for Q2-FY24 was SAR 16.45 million, reflecting a 49.00% quarter-on-quarter (QoQ) decrease compared to Q1-FY24. This decline was primarily due to a 16.48% decrease in total revenue, driven by lower sales in the Home Appliances segment, influenced by market dynamics during key holiday periods and seasonal breaks.

Additionally, higher SG&A expenses and increased impairment loss on trade and other receivables, attributed to this seasonality, further impacted profitability. Despite these challenges, the HVAC Solutions segment showed resilience with a 1.91% quarter-on-quarter (QoQ) sales increase.

Al Hassan Ghazi Ibrahim Shaker Co. (“The Company” or “Shaker”) achieved a revenue of SAR 758.38 million in H1-FY24, a robust increase of 15.97% year-on-year (YoY) from SAR 653.96 million in H1-FY23, driven by rising core business growth along with an enhanced product portfolio.

The HVAC solution segment revenue continued its strong performance, achieving a remarkable 32.01% increase year-on-year (YoY), offsetting the 9.10% decline in Home Appliances revenue and a more pronounced impact of seasonal factors in H1-FY24 compared to the same period last year.

Shaker’s net profit for H1-FY24 rose by 9.05% to SAR 48.70 million compared to SAR 44.66 million in H1-FY23 mainly driven by:

Revenues:

Total revenue increased by 15.97% year on year (YoY) as the growth strategy continued to yield results, leading to higher sales in the HVAC solutions segment (including B2B and B2C offerings) along with a more diversified and expanded product portfolio.

HVAC Solutions segment revenue increased by a remarkable 32.01%, which offset the 9.10% decline in Home Appliances revenue.

Gross Profit:

Gross profit rose by 12.16% YoY to SAR 180.96 million in H1-FY24 compared to SAR 161.34 million in H1-FY23.

The increase in gross profit was in-line with higher revenue, and a favourable portfolio mix.

Operating profit:

Income from operations was lower by 11.44% YoY at SAR 42.88 million driven by increase impairment loss on trade and other receivables and higher SG&A costs, consistent with the ongoing marketing and staffing expansion initiatives.

Net profit:

Net profit attributable to equity owners increased by 9.05% YoY, up from SAR 44.66 million in H1-FY23 to reach SAR 48.70 million in H1-FY24. This robust growth resulted from higher revenues and gross profits, further supported by lower finance costs achieved through debt reduction and a 7.17% increase in share of profit from the LG-Shaker HVAC factory.

The comparative figures for the earnings per share of the Condensed Consolidated Interim Financial Statements have been adjusted to meet the current year classification according to the International Financial Reporting Standards (IFRS) that are endorsed in the Kingdom of Saudi Arabia.

As a result of issuance of bonus shares, as approved by the Extraordinary General Assembly on 19 May 2024, the weighted average number of ordinary shares outstanding has been retrospectively adjusted for the prior period to reflect the effect of the changes in number of shares.