BinDawood Holding Company Announces Its Condensed Consolidated Interim Financial Results for the Period Ended 30th June 2022 (Six Months)

The gross profit reduced by 5.3% versus Q2 2021 due to the effect of marketing campaigns and loyalty program activities.

Operating expenses in Q2 2022 amounted to SAR 315.3 million versus SAR 284.4 million in Q2 2021. The year-on-year increase reflects the impact of new store openings, the transaction related expenses on International Applications Trading Company (“IATC”) & Ykone acquisitions and investment in human capital.

Net profit for Q2 2022 was SAR 42.3 million which is 55.5% lower than Q2 2021. The decrease was a direct reflection of the higher operating expenses and lower gross margins.

The operating expenses for Q2 2022 increased by 0.8% as compared to Q1 2022 resulted from the opening of two new express stores during Q2 2022 and the transaction related expenses incurred on acquisition of IATC & Ykone.

Net profit of SAR 42.3 million declined significantly by 35.4% in comparison with the previous quarter due to a decline in gross margin by 1.5% and increased operating expenses due to reasons explained above.

Furthermore, sales were supported by the return of Ramadan and Back to School seasons.

Gross profit declined by SAR 11 million due to the effect of marketing campaigns and loyalty program activities.

Operating expenses in H1 2022 amounted to SAR 628.1 million versus SAR 573 million in H1 2021. The increase is directly attributable to fixed and variable cost element of operating expenses that were higher due to new stores and costs associated with stores in the process of opening, costs related to the acquisition of IATC and Ykone by Future Retail for Information Technology Company (“FTR”) and an increase in general and administrative salaries to attract & retain best human talent.

The Company’s net profit reduced to SAR 107.8 million reflecting a decline of 31.4% in comparison with H1 2021 due to cumulative impact of a decline in gross profit and higher operating expenses.

It is worth mentioning that, post-June 2022, the Company via its subsidiary FTR, acquired 62% of the shares of IATC, which developed and operates the Danube Online e-commerce platform and online mobile applications of the Danube and BinDawood brands.

Furthermore, FTR announced its second acquisition, to 80.5% stake in Ykone, a subsidiary of TF1 Group, a French leader in content production, publishing and distribution. The acquisition took place through FTR’s wholly owned subsidiary in France.

Furthermore, the Company’s financial position remains strong with no bank debt. Cash generated from operations in Q2 2022 was SAR 144.8 million versus SAR 420.1 million in Q1 2022. As at 30 June 2022, the Company had a cash balance of SAR 722.6 million including short-term deposit of SAR 220 million, which represented an increase of 49.3% as compared to 31 December 2021 due to improved working capital.

Significant movements in the Statement of Financial Position as at 30th June 2022 (for the six-month period) were noted as follows:

1. Non-current assets declined by 4.2% resulting from depreciation on property and equipment and right-of-use assets.

2. Current assets increased by 9.9% because of increase in cash and cash equivalents & short term deposits which is partially offset by decrease in receivables balances.

3. Current liabilities increased by 11.3% resulting from increased purchases in order to cope the potential surge in demand due to Ramadan and Hajj seasons.

4. Non-current liabilities reduced by 4.2% in H1 2022 on account of net payments made against lease liabilities.

5. Shareholders’ equity increased by 2.4% driven by an increase in retained earnings (net profit for the period).