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‎Alsaif expects large home appliances sector to begin ops in Q1 2024

Thu, 09 Nov 2023 21:36:00 GMT

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Mohammad Alsaif, CEO of Alsaif Stores for Development and Investment Co.

Alsaif Stores for Development and Investment Co. has passed the worst in the market, CEO Mohammad Alsaif told Argaam in an interview, adding that his company eyes growth by breaking into new complementing sectors and opening branches in new regions.

The company has great growth opportunities, Alsaif added, expecting robust sales growth going forward driven by the company’s entry into the large home appliances sector, such as air conditioners, refrigerators, ovens and TVs, given that it complements the company’s business.

These appliances will be Alsaif-branded. The company seeks to deploy large home appliances in more than 40 branches by the end of Q1 2024 and in most stores by the end of the second quarter, the CEO said, expecting entry into this market to raise the average invoice per customer. He also expects higher brick-and-mortar and online sales, backed by Alsaif’s branch network.

Alsaif’s growth will be also propelled by the performance of new openings, which need up to six months to be fully known by customers.

Commenting on Q3 2023 financial results, Alsaif said the figures were hurt by a nearly 10% decline year-on-year (YoY) in sales despite better profit margins, in addition to a 32% YoY increase in selling and marketing expenses, due to non-recurring marketing expenses arising from openings and promotion for new stores in Kuwait and the UAE, as well as some new branches in Saudi Arabia. Increased expenses related to the cost of finance lease contracts in accordance with IFRS 16 also weighed on the company.

Alsaif has 68 showrooms in Saudi Arabia, Kuwait and the UAE. A new addition is expected in Oman by the end of Q4, in addition to other three in Q1 2024.

The CEO shrugged off plans to close any company branch, as all branches make profits at various rates. The entry into the large home appliances industry will bolster branch performance and raise sales per square meter.

Alsaif holds a 27% share in small appliances market and nearly 40% in the home utensils market. The company aims to garner a solid market share in large home appliances, expecting to start operations in early 2024.

Like peers, the company seeks to boost its market share especially amid economic headwinds.

Further, the CEO said Alsaif’s loss leader strategy was adopted between 2012 and 2015, when the company did not have a brand for its own. It depended on local suppliers, while profit margins were weak.

The company can control prices as around 8%% of the products sold in its showrooms are Alsaif-branded.

Alsaif reported a net profit of SAR 81.1 million for the first nine months of 2023, down 20% compared to SAR 101.7 million in the year-earlier period. The third-quarter net profit dropped 45% year-on-year (YoY) to SAR 15.3 million, Argaam reported.

‎Al Jouf Cement maintains supportive average prices, expects stronger demand in early 2024: CEO

Thu, 09 Nov 2023 17:58:00 GMT

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Abdul Karim Al Nuhair, Managing Director and CEO of Al Jouf Cement Co.

Abdul Karim Al Nuhair, Managing Director and CEO of Al Jouf Cement Co., said the company maintained supportive average cement prices and managed to opt out of the harmful price war.

The rise in Al Jouf Cement’s profit was driven by higher sales as a result of increasing the company’s market share and securing a solid share in exports. This is in addition to reducing costs by launching initiatives to improve operational efficiency, boost production, and build long-term relationships with suppliers, he told Argaam in an interview.

The top executive also expected demand for cement to pick up in early 2024, fueled by strategic projects in close proximity to the company’s plant, such as the NEOM, AlUla, and Madinah projects, as well as those in the Northern Province and Al Jouf. He pointed to the company’s aspirations for improved demand in the housing sector by year-end, given the expected decrease in interest rates in H2 2024.

The cement producer stated in its Q3 2023 report a SAR 81 million reservation related to the cost of inventory. It generated an accurate inventory of clinker, cement, and raw materials stocks during the quarter through a third party. A detailed report has been submitted to the auditor to be studied and factored in Al Jouf Cement’s quarterly report. The auditor expects this one-off item to not impact on the company’s Q4 2023 financial statements, according to the CEO.

“The company’s management is still negotiating with lenders to reschedule existing loans to commercial banks and the Saudi Industrial Development Fund (SIDF). We believe that we will reach a good result, especially with the significant improvement in the company’s financial performance and its quarterly profit of no less than SAR 20 million,” Al Nuhair was quoted saying.

Al Jouf Cement's profits surged to SAR 72.6 million in the first nine months of 2023 from SAR 7.8 million a year earlier. The third-quarter profit amounted to SAR 29 million, according to Argaam's data.

‎SACO on track to turn profitable soon: CEO

Thu, 09 Nov 2023 15:17:00 GMT

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SACO’s CEO Abdel-Salam Bdeir

Saudi Company for Hardware (SACO) is working to turn profitable soon and log better financials in the future, CEO Abdel-Salam Bdeir told Argaam in a phone call.

SACO was able to improve its final goods inventory level through effective inventory management and is still working to achieve better levels in the coming periods, he explained.

Bdeir stated that SACO attained progress on several levels in line with the strategic transformation plan aimed at boosting the company’s results. Accordingly, the operating loss was reduced by about SAR 30 million during Q3 2023, compared to the same period of the previous year.

The drop in SACO’s operating costs was attributed to the signing of new supplier contracts and effective inventory management. This is besides rationalizing and cutting costs and expense, strengthening human capital in management and creativity, in addition to developing customer service.

The company is currently focusing its efforts on implementing the strategic transformation plan. Bdeir pointed out that no new branches were opened during Q3 2023, with no closures cited during the same period.

A total of two branches were closed between Q4 2022-Q1 2023, which did not entail any significant financial impact.

According to Argaam data, SACO recorded losses worth SAR 44.7 million by the end of the first nine months of 2023. The third-quarter losses amounted to about SAR 12.2 million.

‎SSOs effective for hedging; more companies to be added: Tadawul official

Tue, 07 Nov 2023 20:12:00 GMT

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Nayef AlathelActing Chief of Derivatives atTadawul

Single stock options (SSOs) are deemed an effective tool for investors seeking to hedge and risk manage their investment portfolios more efficiently, Acting Chief of Derivatives at the Saudi Exchange (Tadawul) Nayef Alathel said.

In an interview withArgaam, Alathel explained that SSOsare the third derivatives product introducedon Tadawul, reflecting the Saudiexchangecommitment to enable investor access to new and diverse investment opportunities.

This financial instrument, according to the Alathel, gives the holder the right to sell/buy an underlying asset at a specific price and date. The underlying asset of these contracts is single stocks, the value of which is derived from the value of the underlying stocks.

He pointed out that SSOs contracts allow for tracking the price movement of the underlying stock (instead of following the price movement of a basket of shares as in indexfuturescontracts). Unlike stock trading, these contracts permit holders to benefit from the leverage feature to enhance profitability and market penetration with less capital, with the possibility of short selling without owning the underlying shares.

On starting with just four companies, Alathel said the four core assets represent the stocks of the largest and most liquid Tadawul-listed companies, including Saudi Aramco, Al Rajhi Bank, stc and Saudi Basic Industries Corp. (SABIC).

He explained that Tadawul intends to expand the portfolio of SSOs contracts to include other companies in the future, noting that it is currently working with a number of listed companies on the launch of SSOs contracts, with more details to be revealed soon.

Tadawul has already launched several derivatives products, namely MT30 index futures, which are settlement cash futures contracts, as well as single stock futures (SSFs) contracts, and recently introduced several newfuturesindices aimed at enhancing the opportunities available to investors. This includes three corporate sizeindices— Tadawul Large Cap Index, Tadawul Medium Cap Index, Tadawul Small Cap Index, coupled with the Tadawul IPO Index.

Alathel also underlined that the launch of SSOs marks a crucial step for Tadawulas they contribute to boostingliquidity levels andenhancethe efficiency and progress of the Saudi capital market in line with the most prominent international standards.

According toArgaamdata, Tadawul plans to introduce SSOs contracts on Nov. 27, to be cleared with the Securities Clearing Center Co. (Muqassa).

‎Al Othaim's modern trade market share reaches up to 19%: CEO

Tue, 07 Nov 2023 13:32:00 GMT

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Muaffaq Mubarah, CEO ofAbdullah Al Othaim Markets Co.

Abdullah Al Othaim Markets Co.'s market share varies from one product to another, where’s as the market share reached nearly 19% within Modern Trade for the year ending September 2023 compared to 17.5% during the same period of the previous year, Muaffaq Mubarah, the company CEO said in a call with Argaam.

The company's plans and targets include continuing to increase market share, CEO added, indicating that the number of Al Othaim branches reached 337 by the end of the third quarter 2023, in more than 100 cities.

The company opened 34 branches in the Kingdom since the beginning of 2023, including 14 branches during the third quarter, while 3 branches were opened in Egypt.

Moreover, the retailer posted a 12% profit growth in Q3 2023, compared to the same period an earlier year, excluding the non-recurring operations, whereas Q3 2022 net profit stood at SAR 701.2 million from the sale of an investment in an associate company and the sale of investment land in Madinah.

According to data available with Argaam, the company reported a net profits of SAr 321.8 million by the end of the first nine months of 2023, and a net profits for the third quarter 2023 amounted to SAR 62.4 million

‎Leejam Sports eyes 20% rise in memberships, revenues, profit: CEO

Mon, 06 Nov 2023 22:06:00 GMT

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Adnan Al-Khalaf, CEO of Leejam Sports Co.

Adnan Al-Khalaf, CEO of Leejam Sports Co. (Fitness Time), said that the company is committed to continuing with its plans to post 20% growth in memberships, revenues and profit as a key performance indicator.

In an interview with Argaam on the sidelines of the Leejam Day conference, the top official added that the third quarter was challenging given the higher-performing quarter a year ago.

As for the company's financial results, Al-Khalaf pointed out that Q3 profit was fueled by a well-studied focus on diverse geographical areas and customer segments within sports clubs, especially between male and female customers, in addition to the company’s strategy, which revolves around boosting the customer experience through various programs within the club and the sports club renewal programme.

The CEO also revealed that the number of subscribers reached 484,000 by the end of the third quarter, which is the highest in the company’s history, indicating that the growth exceeded 20% in all clubs, which highlights the operational efficiency.

The conditions of September were in line with expectations, especially with the success of the marketing campaign for the National Day and the months preceding it, said the CEO, reaffirming the efficiency that was achieved through new branches in accordance with the planned efficiency goals.

Regarding the write-off of assets in the areas close to Al Diriyah Gate project, Al-Khalaf explained that the related financial impact amounted to about SAR 11 million, adding that the company is working to mitigate the impact in the geographical area of the Al-Khuzama and Al-Raed districts, part of Diriyah, which are close to the project. He also indicated that the two branches are among the best performing centers within the network in terms of member contribution, profitability and revenue.

“Leejam Day Conference emphasizes professional interaction and aims to provide data on the size of the market from investors, after cooperating with the Ministry of Investment to develop the sports sector, reinforce the sports investment environment in the Kingdom, and inform investors of the latest developments," said Al-Khalaf.

The CEO also expects clubs to open at a higher pace in Q4 2023 than previous quarters, which will positively affect the financial results. "We seek to reach levels similar to the same quarter of the previous year and achieve sustainable growth despite seasonality in the second half, and comparison with the same quarter of the previous year, where the company achieved excellent performance," he stated.

‎Care’s Q3 profit lifted by upsurge of visits, price adjustments for health ministry: CEO

Mon, 06 Nov 2023 20:29:00 GMT

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National Medical Care Co. (Care) CEO AbdulazizAlobaid

Abdulaziz Alobai, CEO of National Medical Care Co., said that Q3 2023 profit was buoyed by the higher number of visits, a positive price adjustment for the Ministry of Health and a disciplined cost management approach.

The strong results were also backed by the continued participation andsupport of keypartners, which will help Care maintain such outstanding results, Alobaid added in a phone call with Argaam.

Hospitals witnessed growth in business with government entities during the third quarter. In addition, the company raised its rates for the Ministry of Health as Care’s facilitiesachievedHIMSSaccreditation in Q1 2023.

Growth in the ministry’s rates and revenue improvement was encouraging, though the company sealed an agreement with theMinistry ofNational Guardfor long-term care services during Q2 2023, Alobaid added.

As for the revenue growth in the third quarter, the company's focus was on strengthening relationships with partners and meeting their specific needs. The company's hospitals obtained the Commission on Accreditation of Rehabilitation Facilities (CARF) accreditation, which contributes to providing the best services and enables facilities for rehabilitation services.

Care’s hospitals experienced an upsurge in the number of inpatient and outpatient visits during the third quarter. These hospitals continue to enhance patient experience and attract highly qualified doctors.

Additionally, he underscored that the growth in business serves as a direct indicator of increased economic activity in Riyadh, aligning with the objectives of Vision 2030.

He pointed out that the company is working to collect receivables from customers and invoices from the National Guard related to past-due receivables, adding that Care seeks to maintain current insurance balances with partners and keep the settlement periods updated.

The company books provisions against unpaid receivables in line with the IFRS requirements, and writes off the provisions carried forward against these receivables once the amount is collected.

Al-Obaid revealed that Jiwar Medical Services will be officially launched during Q4 2023, noting that since its acquisition, the company has recorded the costs of employees and facilities.

Care’s Q3 2023 net profit reached SAR 73.4 million, driving the nine-month bottom line 55% year-on-year higher to SAR 177.5 million, Argaamreported.

‎Alsaif Gallery adopted 'loss leader pricing' for marketing purposes: CEO

Mon, 06 Nov 2023 14:46:00 GMT

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Mohammed Suleiman Al-Saif, CEO of Al-Saif Stores for Development and Investment Co.

Al-Saif Stores for Development and Investment Co. (Alsaif Gallery) CEO Mohammed Suleiman Al-Saif stated that the company has slashed the prices of well-known products for marketing purposes.

In an interview with the Sawalef Business podcast, Al-Saif explained that as a marketing strategy, the company sometimes had to sell some products, particularly well-known ones, at a loss in order to attract customers and have the total average of their shopping basket become profitable for the company.

He went on to say that rival companies sell a well-known French brand for 650 riyals, while the company sells it for SAR 605 at a profit of only SAR 5.

The CEO further noted that the company's manufacturing profit margin is between 35% and 40%, and that these products currently account for 85% of branch sales.

The company currently manufactures several household and electrical products under the Edison brand. The profit margin on products from agencies is 10%. In addition, at the end of the year, there is an incentive discount of 2% to 7% when paying the balance, depending on the size of the sales invoice from the agent, he said.

Al-Saif added that the company's e-commerce sales account for about 10% of its overall annual sales, compared to only 1% before the COVID pandemic.

As for the company’s future expansions, the CEO revealed that Alsaif Gallery seeks to further expand in the UAE, Kuwait, and Jordan, noting that the Egyptian market is currently excluded due to what is happening in the pound exchange rate against the dollar.

‎Aslak’s product mix helps maintain market share, achieve ultimate profitability: CEO

Sun, 05 Nov 2023 19:13:00 GMT

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Aslak’s CEO Nabil Alamir

United Wire Factories Co.’s (Aslak) product diversification enabled the company’s resilience againstmarket changes and helped it achieve the ultimate profitability while maintaining its market share, said CEO Nabil Alamir.

In a phone call with Argaam, the top executive indicated that Aslak is currently working on completing the manufacturing facilities for its new products in preparation for their market rollout.

He added that Aslak has established a new factory in Al-Kharj Industrial City on an area of 15,000 square meters, which will be allocated to quality products that suit the current and future needs of the construction sector, especially the Saudi Vision 2030 projects.

The CEO attributed the decline in Q3 2023 profit to lower sales value and margins as a result of price competition among producers due to the generally weak demand for all products, especially construction products. Prices of raw materials and rebar also continued to slump, which led to sales losses due to the presence of inventory priced two times higher because of the pressure on selling margins.

Thus, Aslak worked to mitigate this pullback as of early Q2 2023 by taking rapid and fundamental measures. This is to offset the factors with the greatest negative impact and manage purchases of raw materials and stock placement during the second and third quarters of this year in a cautious and effective manner, he stated.

The company has counteracted this stage, which is evident in the surge of the gross profit percentage to 8% in Q3 2023, compared to 6% in Q3 2022, despite the decline in sales. Measures to deal with the current situation will remain adopted until market conditions improve, according to Alamir.

He pointed out that, although sales slumped, Aslak benefited from production capacity at appropriate levels to absorb fixed costs and alleviate their impact on profit margins. This is besides placing more focus on civil sector products in order to garner the most out of these safeguard measures, in line with the company’s strategic plan.

Alamir also highlighted that it is currently difficult to predict market trends in light of the prevailing political and economic fluctuations, adding that demand for the construction sector products is likely to continue until year-end.

"Margins, in general, have improved as a result of the stability and consistency of raw material prices at local levels. We always work to track these variables on a regular basis to deal with them in an effort to achieve the ultimate results," said the CEO.

According to Argaam’s data, Aslak's profit fell to SAR 12.1 million in the first nine months of 2023, compared to SAR 45.3 million in the same period a year ago.