eXtra boosts market share to 17.4% until May 2019, says CEO

United Electronics Co. (eXtra) has boosted its market share by almost 24 percent year-on-year (YoY) to 17.4 percent in the first five months of 2019, chief executive officer Mohamed Galal told Argaam in an exclusive on Tuesday.

The retailer reported higher market share from all segments, driving Q2 2019 sales revenue up by 14.4 percent YoY to SAR 1.16 billion.

The first-half sales revenue also jumped 18 percent YoY to SAR 22.2 billion despite a marginal increase of 2 percent YoY in the electronics and home appliance market over the five-month period.

eXtra aims to raise gross profit, which grew by 22 percent YoY in Q2 2019 given its diversified income sources, such as the instalments and maintenance services.

The company posted a 59 percent YoY rise in Q2 2019 net profit to SAR 72.5 million.

Read: Financial Results : eXtra net profit increases 58% in H1 2019

Commenting on eXtra’s deal with Al Rajhi Bank, Galal said that this is the company’s first securitization deal of receivables from instalment sales and the first non-asset backed securitization transaction for Saudi Arabia.

“The deal will mark eXtra’s success in managing the instalments sales portfolio and quality of clients,” he added.

“It will also help diversify the company’s financing channels through generating immediate cash flows instead of longer-term receivables collections,” Galal continued.

Accordingly, the home appliance retailer will be able to reduce bank loans or use cash flows in future expansions. 

Galal noted that the company has got experience in concluding such deals to support the consumer finance business going forward. 

The company’s wholly-owned consumer finance unit, United Company for Financial Services, launched operations in early June this year in the Eastern Province.

“eXtra has completed the development of its e-platform “extra.com” in partnership with major specialist firms to tap growth opportunities in the region and garner higher market share going forward,” Galal said.

eXtra will open two new showrooms this year to expand operations and reach more clients. 

It is also working on improving aftersales and maintenance services, as well as expanding its consumer finance activities through its subsidiary. 

“The Sharia-compliant consumer finance unit operates in 24 branches across the Kingdom and provides securitization and Murabaha services,” Galal concluded.