Aldrees, an operator of fuel stations across Saudi Arabia, had its business adversely impacted by slow demand and a recent hike in fuel prices that took effect as of January 1. The company announced plans to close stations and tweak its business model as a result.
"We recognized that our business will shrink throughout 2017 given current market conditions," Al-Drees said.
“After the new fuel prices took effect, we asked competent authorities to revise our margins to help us cope. They promised to look into our proposal," he said.
A slew of austerity measures applied by Saudi government had impacted on economy and prompted thousands of foreign workers to leave the country.
"Fuel consumption efficiency plans coupled with the exit of expatriate workers from the market will further reduce demand. In response, we plan to focus on operating efficiency and will launch new logistics projects," he said.
"Our plan to reduce footprint by closing fuel stations hinges on our ability to renegotiate leasing contracts with landlords. If we managed to reduce leasing cost that will give us leeway to rethink plans," he said.
The company reported a net profit of SAR 63.4 million for fiscal year 2017, down 28.9 percent YoY.