Fawaz Abdulaziz Alhokair Co. announces the interim financial results for the period ending on 30-06-2018 (Three Months)
| Element | Current quarter | Similar quarter for previous year | % Change current | Previous quarter | % Change previous |
|---|---|---|---|---|---|
| Net profit (loss) | 249.19 | 232.41 | 7.22 | -184.45 | - |
| Gross profit (loss) | 523.34 | 550.46 | -4.93 | 45.34 | 1,054.26 |
| Operational profit (loss) | 314.72 | 301.64 | 4.34 | -167.3 | - |
| Earning or loss per share, Riyals | 1.19 | 1.11 | - | - | - |
| All figures are in (Millions) Saudi Arabia, Riyals | |||||
| Element | EXPLAINATION |
|---|---|
| Reasons of increase (decrease) for quarter compared with same quarter last year | The company posted a record profit of SAR 249 million, an increase of 7.2% compared to the same period last year despite a 10.8% drop in sales during the same period. This increase in profits resulted in the successful implementation of management policies that focused on profitability and the pursuit of sustainable long-term growth in the profitability of the company. This was represented in the following: 1) Increased profit margin by 1.8% compared to the same quarter of the previous year achieved from renegotiation on the cost of purchasing a number of brands and focus on brands and shops with higher profitability and closing a number of stores losing both in the Saudi market and international. 2) The direct cost decrease by 5.9% compared to the same quarter of the previous year, and this was also achieved by raising the level of efficiency in the shops, which increased the average value basket and the number of units per transaction and focus on brands and shops with high profitability. 3) Reduction of sales and marketing expenses by 20.8% compared to the same quarter of the previous year through the use of targeted marketing in the means of social media and reduce the cost of shipping and storage. 4) The Company has implemented its plan to reduce general and administrative expenses resulting in a 13.5% decrease in these expenses compared to the same quarter of the previous year; and 5) an increase in other income of SR 14.2 million compared to the same quarter last year. On the company's ability to control costs, creating a consistent level of profitability in the future, this puts the company in a strong position when the sales bounce-back. |
| Reasons of increase (decrease) for quarter compared with previous quarter | The reason for the increase in net profit during the first quarter compared to the previous quarter is due to the increase in sales with the effect of the Holy Month of Ramadan and the increase in the profit margin in general due to the sale of most of the goods at full price without reduction and the percentage of goods sold during the discount period |
| Reclassifications in quarterly financial results | Certain figure for the prior period have been re-measured and reclassified in order to be in line with the international accounting standards IFRS used to prepare the Financial Statements. |
| Other notes | Sales for the first quarter of this year reached 1846 million riyals compared to 2070 million riyals, a decrease of 10.8% compared to the same quarter of the previous year. This decline was the result of the closure of a number of losing stores, which led to higher profitability. The company has recently opened the brand of Lefties (one of the brands of Inditex specialized in value products), as well as the opening of Aleph as an authorized distributor of the products of Apple International, as well as the company's entry in the field of make-up and skin care and e-commerce. All of this will result in increased sales, offsetting the decline and returning total sales to growth over the medium and long term. Net profit was 249 million riyals for the first quarter of this year, a record profit for the company's quarterly profit. The total shareholders 'equity (no minority interest) as at 30 June 2018 amounted to SR 2,491 million, an increase of 10.81% compared to total shareholders' equity (no minority interest) amounting to SR 2,248 million as at 30 June 2017. Total income during the period amounted to SR 242 million compared to SR 206 million, an increase of 17%. |
Comments