BinDawood Holding —
BinDawood Holding Company Announces Its Interim Condensed Consolidated Financial Results for the Period Ended 30th September 2022 (Nine Months).
| Element List | Current Quarter | Similar quarter for previous year | %Change | Previous Quarter | % Change |
|---|---|---|---|---|---|
| Sales/Revenue | 1,182,546,183 | 1,077,804,895 | 9.72 | 1,220,909,578 | -3.14 |
| Gross Profit (Loss) | 307,166,794 | 397,298,175 | -22.69 | 378,149,718 | -18.77 |
| Operational Profit (Loss) | -26,505,715 | 95,457,407 | – | 64,754,989 | – |
| Net Profit (Loss) after Zakat and Tax | -48,008,867 | 70,244,219 | – | 42,334,921 | – |
| Total Comprehensive Income | -54,342,631 | 70,244,219 | – | 42,334,921 | – |
| All figures are in (Actual) Saudi Arabia, Riyals | |||||
| Element List | Current Period | Similar period for previous year | %Change |
|---|---|---|---|
| Sales/Revenue | 3,578,690,742 | 3,325,048,649 | 7.63 |
| Gross Profit (Loss) | 1,068,986,694 | 1,170,054,633 | -8.64 |
| Operational Profit (Loss) | 111,066,702 | 299,403,932 | -62.9 |
| Net Profit (Loss) after Zakat and Tax | 59,784,559 | 227,348,635 | -73.7 |
| Total Comprehensive Income | 53,450,795 | 227,348,635 | -76.49 |
| Total Share Holders Equity (after Deducting Minority Equity) | 1,286,768,754 | 1,397,413,477 | -7.92 |
| Profit (Loss) per Share | 0.52 | 1.99 | |
| All figures are in (Actual) Saudi Arabia, Riyals | |||
| Element List | Explanation |
|---|---|
| The reason of the increase (decrease) in the net profit during the current quarter compared to the same quarter of the last year is | Revenue for the third quarter was SAR 1,182.5 million, 9.7% higher than Q3 2021, as a result of the Company’s continued marketing and promotions activity.
The increase in the third quarter’s revenues is directly attributable to BinDawood stores sales coupled with contributions of overseas subsidiary, Ykone. Increase in BinDawood stores’ revenues was witnessed across the full store’s portfolio and not just confined to the stores serving the pilgrims. However, Danube stores’ revenues declined mainly because of lower sales volume to corporate customers.
Third quarter’s gross profit was SAR 307.2 million equivalent to 26% of sales revenue comparing to SAR 397.3 million equivalent to 36.9% of sales revenues in Q3 2021. The decline in gross profit was led by the marketing and promotions activity and the realigning of our supplier support income (supplier terms). Third quarter’s operating expenses were SAR 336.5 million, comparing to SAR 304.1 million in Q3 2021, as a result of higher employment costs, acquisition-related costs and higher bank charges as more customers reverted to pay using credit cards during this quarter.
Third quarter’s net losses was SAR 48 million versus a net profit of SAR 70.2 million in Q3 2021, which reflects the cumulative impact of lower gross margin and higher operating expenses. |
| The reason of the increase (decrease) in the net profit during the current quarter compared to the previous quarter of the current year is | The decline in Revenue by 3.1% in Q3 2022 compared to Q2 2022 is mainly due to a drop in sales of Bindawood stores owing to a fall of the full-fledged Ramadan season in Q2 2022. Moreover, limited Hajj season attracted less than anticipated consumer footfall, coupled with the fact that ritual days fall between late Q2’22 and early Q3’22 as a consequence of which a declining trend is witnessed in Q3’22.
The decrease in gross profit is directly attributable to a decline in revenues. Further, the decline in gross profit was led by the marketing and promotions activity, and the realigning of our supplier support income (supplier terms). Operating expenses increased by 6.7% from SAR 315.3 million to SAR 336.5 million due to an increase in acquisition-related costs and the impact of the cost associated with the new store opening during Q3 2022. Net Profit was dropped by 213.4% in Q3 2022 versus Q2 2022 mainly due to a significant drop in gross margin and an increase in operating expenses as mentioned above. |
| The reason of the increase (decrease) in the net profit during the current period compared to the same period of the last year is | Revenues increased by 7.6% to SAR 3,578.7 million compared to SAR 3,325 million for the same period last year. Increase in sales revenues were mainly driven by BinDawood stores’ sales, which were 27.6% higher in the first nine months of 2022 comparing to the same period in 2021. The return of the pilgrims, spurred by the lifting of the travel ban and the return of promotions and marketing activities during Hajj, Umrah and Back to School seasons helped lift sales across all BinDawood stores and not just those serving pilgrims. Danube sales were slower mainly due to a slow-down in sales related to corporate customers.
Gross profit was SAR 1,069 million or 29.9% of sales revenues during the period ended September 2022 comparing to SAR 1,170.1 million or 35.2% of sales revenues during the same period of 2021. The reduction in gross profit is directly attributable to the third quarter’s decreased gross profit led by the marketing and promotions activity, and the realigning of our supplier support income (supplier terms).
Operating expenses were SAR 964.6 million versus SAR 877.1 million in 9M 2021, reflecting higher employment costs, expenses associated with new store openings, as well as acquisition-related costs.
The net profit was SAR 59.8 million compared to SAR 227.3 million in 9M 2021, representing a net profit margin of 1.7% and 6.8% respectively. The strong sales performance in 9M 2022 was unable to offset the reduction in gross margin and higher operating expenses, particularly during the loss-making third quarter, resulting in a much smaller net profit year-to-date. |
| Statement of the type of external auditor’s report | Unmodified conclusion |
| Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor Opinion | Not applicable. |
| Reclassification of Comparison Items | No comparative figures for the previous period have been reclassified. |
| Additional Information | General comments:
During the third quarter, the Company completed the acquisition of an 80.5% stake in France-based marketing agency Ykone through its wholly-owned subsidiary Future Technology Retail (FTR). Ykone’s performance since the date of acquisition has been much better than expected and the financials will be reflected in the full-year results.
Significant movements in the Statement of Financial Position as at 30th September 2022 (for the nine-month period) were noted as follows: 1. Non-current assets increased by 2.4% resulting from goodwill on the acquisition of Ykone and International Application Trading Company “IATC”. 2. Current assets increased by 4.7% on account of a decrease in receivables balances owing to timely recovery from VIP customers which was offset against an increase in inventory and prepayments & advances. 3. Current liabilities increased by 36% resulting from an incline in trade payables due to increased purchases in order to meet the potential surge in demand for stores serving the pilgrims and Back to School seasons. 4. Non-current liabilities were decreased by 4.0% on account of net payments made against lease liabilities. 5. Total Shareholders’ Equity (After Deducting Minority Equity) decreased by 7.9% driven by a net decrease in retained earnings after the distribution of dividends in Q3 and reporting net loss in the third quarter of the current year. |
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