Al Othaim H1 2023 profit jumps to SAR 259.4 mln; Q2 at SAR 139.4 mln on land sale

Abdullah Al Othaim Markets Co. posted a 70.9% rise in H1 2023 net profit to SAR 259.4 million from SAR 151.8 million in the year-earlier period.

The company reported a 10.27% increase year-on-year (YoY) in sales from existing and new stores, in addition to improved gross profit margins and real estate activity. It recorded a capital gain after Zakat of SAR 96.9 million from the sale of an investment land plot in Riyadh.

In addition, Al Othaim reported gains from investing cash liquidity in Shariah-compliant bank deposits.

On the other hand, it recorded an increase in selling and marketing expenses triggered by the new openings, mainly the financing cost of lease contracts pursuant to the International Financial Reporting Standard (IFRS) 16 and the underperformance of associates.

The second-quarter net profit more than doubled to SAR 139.4 million from SAR 50 million in Q2 2022. Al Othaim reported sales growth of 7.33% YoY from existing and new branches, as well as better gross profit margins.

The company also made gains from investing cash liquidity in Shariah-compliant bank deposits and recorded capital gains of SAR 96.9 million after Zakat from selling a land plot.

This was despite an increase in selling and marketing expenses triggered by the new openings, mainly the financing cost of lease contracts pursuant to IFRS 16 and the underperformance of associates.

The grocery chain’s net profit climbed 16.2% from SAR 120 million in Q1 2023 on a SAR 96.9 million capital gain, improved gross margins and leasing activities.

Shareholders’ equity, after minority interest, reached SAR 1.41 billion by the end of H1 2023, compared to SAR 1.33 billion in the year-ago period.

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