Jarir’s SAR 130 mln e-commerce investments hit 2019 profit, says Alagil

Jarir Marketing Co.’s (JMC) 2019 net profit was hit by e-commerce investments, including social network advertisements, as the company spent SAR 130 million last year, compared to SAR 93 million a year earlier, chairman Muhammed Alagil told CNBC Arabia.

However, the e-commerce business saw growth of over 100%.

Jarir should maintain its investments in e-commerce, especially on social networks, to have a solid position, Alagil said, adding that online sales accounted for nearly 5% of total sales.

Meanwhile, the application of IFRS 16 had a marginal impact of JMC’s net profit.

The company’s profit in Saudi Arabia represented 85% to 90% of total profit.

“Jarir will pursue expansions and is expected to add 5-6 new showrooms in 2020,” Alagil added.

The new showrooms will be self-financed by the company’s strong cash flows, he noted, concluding that Jarir is likely to maintain its dividend policy of distributing 80-90% dividends.