Fawaz Abdulaziz AlHokair Co.’s (Alhokair) Q1 FY20 net loss of SAR 525.4 million was lower than estimate, Aljazira Capital said in a research note.
Aljazira Capital said it had estimated that retailer’s Q1 to reflect a loss of SAR 129.4 million, while the consensus estimated loss stood at SAR 175.3 million.
Net loss was driven by a steep decline in revenue and SAR 169.2 million in one-off adjustments, the note said. Margins are expected to improve as inventory write-off has been completed, it added.
Aljazira Capital also expects consumer demand to increase, as restrictions put in place to fight Covid pandemic are eased, leading to growth in the long term.
Aljazira Capital maintained its “Neutral” rating on the stock with a revised target price of SAR 22.7.
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