Budget Saudi contracts reach SAR 250 mln, retained earnings hit SAR 723 mln in Q1 2022: CEO

Fawaz Danish, President and Group CEO of Budget Saudi

United International Transportation Co.’s (Budget Saudi) long-term car rental contracts signed in the first quarter of 2022 reached SAR 250 million, compared to SAR 111 million a year earlier, CEO Fawaz Danish told Argaam via a phone call.
 

The contracts generate cash flows in a period ranging between three to four years, Danish noted. 

He added that demand in the short-term rental segment increased in Q1 2022, recording revenue of SAR 57.4 million, compared to SAR 42.3 million a year earlier. Meanwhile, long-term rental income hit SAR 117 million during the three-month period, compared to SAR 114 million in Q1 2021.

However, used car sales declined to SAR 74 million in Q1 2022 from SAR 80 million in Q1 2021.

The Kingdom's tendency to attract tourists, as well as Umrah and Hajj performers, will increase demand for short-term rentals, Danish stressed, expecting an improvement in the segment’s performance during the current year.

Commenting on the Ministry of Commerce’s decision to prevent car rental companies from selling new cars to benefit from high prices, and ensure that they purchase vehicles for rental purposes, Danish confirmed that the company’s activity is to lease and sell used cars. However, the ministry’s decision does not have a financial impact on the firm.

Budget Saudi’s retained earnings amounted to about SAR 723 million in Q1 2022, the top executive said, indicating that the board of directors will discuss the best options to use them. The company will announce any relevant developments in due course.

The Tadawul-listed firm’s net profit after Zakat and tax climbed 25% to SAR 60.3 million in Q1 2022, compared to SAR 48.3 million in the year-earlier period, according to data compiled by Argaam.