BinDawood Holding’s Increased Sales Lead to Improved Q1 2022 Earnings

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  • Q1 2022 Financial Results: BinDawood Holding Acquires Majority Stake in Online Grocery Partner

Jeddah, Saudi Arabia – BinDawood Holding Co. (Tadawul: 4161 and the “Company”), a leading hypermarket and supermarket retail grocery operator in the Kingdom of Saudi Arabia (“KSA”), has today released its first quarter 2022 financial results.

Financial Highlights

(SAR M)

Q1 2022

Q1 2021

% Up down)

Q4 2021

% Up down)

Revenue

1,175.2

1,124.4

4.5%

1,057.1

11.2%

Gross profit

383.7

373.4

2.8%

268.9

42.7%

net profit

65.5

62.1

5.5%

13.2

396.2%

Comments by Ahmad AR. BinDawood, CEO of BinDawood Holding:

“We are finally starting to see a marked improvement in trading. The removal of [the majority of] Government-stipulated pandemic restrictions have seen a return of pilgrims to holy sites in Mecca and Medina, as well as more regular tourists and business travellers. Additionally, greater freedom of movement for locals has led to increased consumer spending in general and, more specifically, increased footfall in our stores.

“Our first quarter revenue was SAR 1.2 billion, up 4.5% year-on-year and 11.2% sequentially. Gains were driven primarily by the return of the Sha’ban and Back to School seasons. Additionally, BinDawood Haramain stores, located in Makkah and Madinah, have benefited from the government lifting all restrictions on Umrah pilgrims.. The increase in revenue translated into significantly higher profitability. Net profit of SAR 65.5 million was up 5.5% year-on-year and 396.2% sequentially.

“We are also pleased to have signed a definitive agreement to acquire International Apps (IATC), the company that developed and operates our two e-commerce channels. The transaction is subject to customary closing conditions and the completion of regulatory review and is expected to close in the second half of 2022. We plan to invest up to an additional SAR 160 million over a two-year period to further support the platform and roll out a network of state-of-the-art dark stores and fulfillment centers. This is a strategic acquisition for us, allowing BinDawood Holding to plan and control the future growth of its business in an increasingly digitally connected world.

Financial: Q1 2022

Revenue for the first quarter of 2022 was SAR 1,175.2 million, up 4.5% from the same period last year. On a sequential basis, revenue increased by 11.2%, compared to SAR 1,057.1 million in the fourth quarter of 2021.

The main driver of increased revenue was the return of the Sha’ban and Back to School seasons. Additionally, BinDawood Haramain stores, located in Makkah and Madinah, have benefited from the government lifting all restrictions on pilgrims performing Umrah.

Gross profit for the first quarter of 2022 was SAR 383.7 million, compared to SAR 373.4 million in the first quarter of 2021 and SAR 268.9 million in the fourth quarter of 2021. The gross margin of 32.6% in the first quarter of 2022 was slightly lower than the 33.2% margin achieved in the first quarter of 2021 due to the timing performance of the regular marketing campaign, but well above the 25.4% posted in the fourth quarter of 2021, which reflected the cumulative impact lower supplier discounts on lower sales.

Operating expenses in the first quarter of 2022 were SAR 312.8 million compared to SAR 288.6 million in the first quarter of 2021 and SAR 296.9 million in the fourth quarter of 2021. The year-on-year increase other reflects the impact of new store openings in 2021. The sequential increase was due to personnel costs. and expenses.

The company’s net profit in the first quarter of 2022 was SAR 65.5 million compared to SAR 62.1 million for the same period last year, which also reflected a rent relief of SAR 17.1 million which compensated for the slight reduction in gross margin and the increase in operating expenses, as explained above.

The Company’s financial position remained solid, with no bank debt. Cash generated from operations in the first quarter of 2022 was SAR 420.1 million compared to SAR 214.6 million in the fourth quarter of 2021.

As of March 31, 2022, the Company had a cash balance of SAR 778.6 million, representing an increase of 60.8% compared to December 31, 2021.

On March 27, 2022, the Company announced the signing of a definitive agreement – through its subsidiary Future Technology Retail – to acquire 62% of the shares of International Applications Trading Company (IATC) which developed and operates the Danube e-commerce platform Online and online mobile applications of the Danube and BinDawood brands, as well as the provision and management of services related to the online platform and mobile applications. The transaction, subject to customary closing conditions and the completion of regulatory review, is expected to close in the second half of 2022. The acquisition is aligned with BinDawood Holding’s objectives to improve its position in e-commerce, optimize its operations and strengthen its omnichannel presence, balancing the business for future growth.

-Ends-

About BinDawood Holding Co.

BinDawood Holding is one of the leading hypermarket and supermarket retail grocery operators in the Kingdom of Saudi Arabia. The Company has a total of 78 stores including 52 hypermarkets and 26 supermarkets, each strategically located across Saudi Arabia, operating two complementary brands: BinDawood and Danube.

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Hassan Javaid, Head of Investor Relations [interim]
[email protected]
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Siobhan McCarthy, Head of Communications
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