United Electronics Co. (eXtra) posted better-than-expected results in Q3 2020, compared to its forecasts for a contraction after the recent value-added tax (VAT) hike, the company’s CEO Mohamed Galal, told Argaam in an exclusive on Sunday.
“Consumption patterns have changed amid the current conditions, as a major part of income has been spent domestically, due to flight suspensions and the limited spending on tourism and entertainment activities,” Galal said.
The home appliance retailer benefited from the changes in spending patterns and from promotions in general during the third quarter, run for the beginning of the new academic year and the National Day celebrations.
According to the latest data, the electronics market contracted by 11% year-on-year (YoY) in July, but resumed growth by 3% YoY in August. The electronics industry was expected to maintain growth in September.
eXtra’s market share reached 20% by the end of August, the highest level excluding the annual mega sale period, Galal said.
Moreover, the company’s market share in the electronics and small appliance markets stood at 41% and 35%, respectively.
The company set qualitative growth as its top priority, which will play the biggest role in its profit growth, along with expansion in consumer finance and maintenance services.
Meanwhile, Galal said the ability of eXtra’s subsidiary, United Company for Financial Services, to turn profit in 12 months since inception is a “record time” for any startup to generate profit, particularly amid the current unfavorable conditions.
The launch of United Company for Financial Services’ new platform during the third quarter of 2020 will facilitate its reach to various customers across the Kingdom to provide professional customer services and the latest Sharia-compliant consumer finance products, Galal concluded.
The home appliance retailer reported a net profit after Zakat and tax of SAR 178.5 million for the first nine months of 2020, a 33.6% increase from SAR 133.5 million a year earlier, Argaam reported.
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