Increase in Revenue reasons:

- Membership revenue increased by SR 31.3M attributable to new center openings in the current quarter (5 male centers and 3 female centers) and ramping up of 22 non-LFL (Like-for-like) centers of last year.

- Increase in Personal Training (PT) revenue by SR 8.9M due to higher number of PT centers contributing during the current quarter compared to similar quarter of previous year, partly offset by decrease in rental income by SR 0.4M due to non-renewal of certain real estate contracts.

Increase in Cost of Revenue reasons:

- Driven by higher number of operating centers in the current quarter, higher consumables due to increasing number of members, and repair works at certain centers, offset by;

- Rent adjustment, due to application of new accounting standard for Leases – IFRS 16, where previously reported rent expense is recognized as part of depreciation of right-of-use assets and financial charges on lease liabilities effective from January 1, 2019.

Advertising & marketing expenses were lower by SR 2.4M (39.5%) due to lower expenditure (with higher focus on social media), lesser campaign during the current quarter and completion of partnership agreement with FCB in June 2018.

General & administrative expenses were higher by SR 2.5M (13.9%), mainly due to increase in employee’s work permit costs compared to first quarter last year, and increase in Board and executive committee fees, partly offset by decrease in assets written off during the current quarter.

Other income net was lower by SR 0.2M mainly due to decrease in ancillary income from FCB upon completion of agreement in June 2018, offset by growth in rental income from internal advertising at centers.

Finance cost were higher by SR 8.1M (168%) mainly due to recording of interest expense of SR 8M on lease liabilities recognized under the new accounting standard for leases – IFRS 16, effective from January 1, 2019.

Decrease in Revenue reasons:

- Membership revenue in current quarter decreased by SR 10.3M compared to Q4 last year mainly due to higher carried forward deferred revenue from Q3 last year, recognized as revenue during Q4 last year. This is due to the seasonal record collections during the National Day campaign in last September, and overall improved Q3 performance attributable to end of summer & Eid holiday, partly offset by the ramping up of non-LFL and new centers in current quarter.

- The decrease was partly offset by increase in Personal Training (PT) revenue by SR 2.5M due to more conductions and higher number of PT centers contributing during the current quarter.

Increase in Cost of Revenue reasons:

- Mainly driven by higher number of operating centers in the current quarter, offset by;

- Rent adjustment, due to the application of new accounting standard for Leases IFRS 16, where previously reported rent expense is recognized as part of depreciation of right-of-use assets and financial charges on lease liabilities effective from January 1, 2019.

Advertising & marketing expenses were lower by SR 1.4M (27.7%) due to lesser campaigns during the current quarter.

General & administrative expenses were lower by SR 14.3M (41.5%) mainly due to net additional expense of SR 17.7M recognized during Q4 last year in relation to one off bonus and end of services obligations paid to ex-senior management personnel, offset by increase in professional fees for Board and executive committee members, and IT expenses (communication cost, user licenses etc.).

Other income decreased by SR 3.7M (60.7%) mainly due to receipt of compensation money from landlord against claim for a closed fitness center in 2015, received in the previous quarter.