Abdullah Al Othaim Markets Co.'s Q2 2017 net profit of SAR 71.2 million topped Albilad Capital's estimate of SAR 65 million and consensus forecasts of SAR 63 million, the brokerage firm said in an earnings review.
"The YoY growth in net profit was fueled by growth in sales of outlets and the expansion in opening new outlets and increased margins and mounting real estate revenues from the newly opened Hail Mall," Albilad Capital added.
The second-quarter sales reached SAR 2.16 billion, growing by 9.6 percent YoY and 15.4 percent when compared to the previous quarter.
Gross profit stood at SAR 357 million, rising 14.3 percent YoY, sending gross margins higher to 16.5 percent, compared to 15.8 percent in Q2 2016.
Al Othaim is likely to record high net profit for H2 2017, backed by achieving annual sales targets for the whole year.
"We expect growth in annual sales to continue this year due to the defensive nature of the sector and the expansion of the company's network inside and outside the Kingdom," the brokerage firm added.
Albilad Capital recommended "neutral" on the stock, but raised its target price to SAR 114 from SAR 104.40.
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