AlKhaleej Training set to acquire local education facilities, bullish for turning to profit in H2 2021

Alwaleed Aldryaan, Managing Director of Al-Khaleej Training Co. 

AlKhaleej Training and Education Co. will buy new education facilities in 2021, as it eyes several acquisitions in various cities across the Kingdom, managing director Alwaleed Aldryaan told Argaam in an exclusive.

“The company aims to raise its capital to pursue expansions in the education sector,” he added.

AlKhaleej is also looking at the investment opportunities offered by the Ministry of Education, through Tatweer Building Company (TBC), such as land leasing deals to build schools, or develop, maintain and operate educational buildings.

While Aldryaan said there are no accurate statistics on the market size and value, he noted that AlKhaleej’s market share in the training segment under Microsoft programs stands at 70%, while its market share in the computer and training for Cisco systems is at nearly 45%.

It is currently difficult to estimate the size of the call centers segment, but the number of agents across the Kingdom exceeds 3,500. The call center services are provided by many large companies, which estimate their market share at almost 60%.

Commenting on the company’s financial results, Aldryaan said that the fourth quarter is the best period for the company’s performance. Most entities spend their budgets on training by the end of the year, but the fourth quarter of 2020 did not witness similar activities due to the COVID-19 impact and priority changes in most entities.

Aldryaan disclosed that the company's fixed expenses such as leases and salaries returned to normal levels, as the government support programs such as SANED were halted and the discount period offered by the owners of the company's multiple branches ended. Moreover, there was cost associated with technology development, especially in the call center segment.

He expected the first half of 2021 performance to be similar to the corresponding period of 2020, as the COVID-19 pandemic is still impacting the education and training sectors.

“Some activities were resuspended two months ago in line with the precautionary measures, and the company's business usually slows down during Ramadan and the summer season, but we are very optimistic that the company's earnings and revenues will return to normal levels in the second half of 2021 on student returning to school and training attendance," Aldryaan concluded.

According to data compiled by Argaam, the board of directors recommended raising capital through offering rights issues shares worth SAR 200 million, to finance and implement the company's future plans, expand its various activities, and acquire assets in the education field.

The educational services provider reported a net profit after Zakat and tax of SAR 10.7 million for 2020, a plunge of 82%, compared to SAR 59.4 million a year earlier. It incurred a loss of SAR 4.8 million in Q4 2020.