Ghida Al-Sultan CEO says lower delivery app costs boost H1 2024 profit

Majed Al-Mesbahi, CEO of Ghida Al-Sultan Co.

Ghida Al-Sultan Co.'s strong focus on slashing costs of delivery apps and boosting the operational efficiency of branches helped spur its profit in the first half of 2024, said CEO Majed Al-Mesbahi.

Al-Mesbahi told Argaam that the company achieved robust financial results in H1 2024, despite the significant sales impact in May from the mayonnaise crisis and the effect of food costs due to the Red Sea shipping crisis.

The increase in the commission for delivery apps during the six-month period is one of the reasons for the decline in profit margins, said the top executive, noting that the company aims to boost profit margin in the coming period.

He stated that the sector is in a corrective position due to the ease of entry and exit of competitors, expecting that the sector will become more stable in 2025 than this year.

The number of the company's branches reached 60 in H1 2024. The two brands, "Foil" and "TNDR", constitute about 26% of total sales, while Sultan Delight Burger represents approximately 74% of total sales, according to the CEO.

Al-Mesbahi expects growth for "Foil" and "TNDR" over the coming period, indicating that plans are being developed to establish new brands annually with various products to cover other target groups.

According to Argaam's data, Ghida Al-Sultan reported a net profit of SAR 6.8 million for H1 2024, an increase of 9% from SAR 6.2 million in a year-earlier period.