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

Element ListCurrent QuarterSimilar quarter for previous year%ChangePrevious Quarter% Change
Sales/Revenue 1,220,909,5781,122,820,3718.731,175,234,9813.89
Gross Profit (Loss) 378,149,718399,400,244-5.32383,670,182-1.44
Operational Profit (Loss) 64,754,989117,164,668-44.7372,817,428-11.07
Net Profit (Loss) after Zakat and Tax 42,334,92194,989,889-55.4365,458,505-35.33
Total Comprehensive Income 42,334,92194,989,889-55.4365,458,505-35.33
All figures are in (Actual) Saudi Arabia, Riyals
Element ListCurrent PeriodSimilar period for previous year%Change
Sales/Revenue 2,396,144,5592,247,243,7546.62
Gross Profit (Loss) 761,819,900772,756,458-1.42
Operational Profit (Loss) 137,572,417203,946,525-32.54
Net Profit (Loss) after Zakat and Tax 107,793,426157,104,416-31.39
Total Comprehensive Income 107,793,426157,104,416-31.39
Total Share Holders Equity (after Deducting Minority Equity) 1,444,639,9831,470,044,258-1.73
Profit (Loss) per Share 0.941.37
All figures are in (Actual) Saudi Arabia, Riyals
Element ListExplanation
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 increased by 8.7% versus Q2 2021. This was mainly attributable to the return of Ramadan season coupled with a combination of easing in certain pandemic restrictions for residents and the return of pilgrims for Umrah.

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 reason of the increase (decrease) in the net profit during the current quarter compared to the previous quarter of the current year is Revenue increased by 3.9% in Q2 2022 versus Q1 2022 whereas, Gross profit decreased by 1.5% due to a drop in gross margin that was primarily related to Ramadan season, marketing campaigns and loyalty program activities.

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.

The reason of the increase (decrease) in the net profit during the current period compared to the same period of the last year is Revenue increased by 6.6% year-on-year to SAR 2,396.1 million in H1 2022 as compared to SAR 2,247.2 million in H1 2021. Sales in the first half 2022 were mainly driven by BinDawood stores.

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.

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:

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).

Attached Documents  

The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.

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