eXtra posts strong Q2 results despite headwinds; eyes higher revenue, market share: CEO

Mohamed Galal, CEO of United Electronics Co. (eXtra)

United Electronics Co. (eXtra) reported strong results for Q2 2023 despite unfavorable conditions amid the current economic headwinds, increasing global interest rates and higher inflation locally in various business sectors, Managing Director and CEO Mohamed Galal told Argaam in a phone call.

Spending on the electronics and home appliances segment contracted by 9% in Q2 2023, compared to the year-earlier period.

eXtra maintained Q2 2023 market share and revenue at the previous year’s levels. It also reported an increase in the number of shoppers in brick-and-mortar stores and transactions in the three-month period.

Galal added that consumer finance services posted a 31.4% rise in revenue during the second quarter, driving eXtra’s revenue growth by 2.3% year-on-year (YoY).

The consumer finance business, through United Company for Financial Services (Tas’heel), reported robust results, though it was mostly hit by higher interest rates. Tas’heel made a net profit of SAR 49.7 million, compared to SAR 45.1 million in Q2 2022.

The segment recorded 10.1% growth, backed by Tas’heel’s financing portfolio that grew by 31% YoY.

Adjusting for the non-recurring and external factors in the previous quarter, the net profit would have reached SAR 113.1 million, compared to SAR 111.5 million in Q2 2022.

Accordingly, eXtra realized its targets despite these exceptional circumstances, the CEO added.

He expected better performance in the second half of the year, as interest rates are expected to remain unchanged in the sex-month period, which will be positively reflected on several economic activities, such as retail. Meanwhile, inflation is likely to ease in the coming period, particularly I the sectors which have a direct impact on consumers, such as homes, foods and beverages. These factors together will help improve spending on the sectors currently impacted over the medium and long term.

Elsewhere, Galal highlighted that garnering a better market share is eXtra’s top priority to enable it to achieve its targets and strategies in the medium and long term.

The home appliance retailer reported a 35% drop in H1 2023 net profit to SAR 146 million from SAR 224.6 million in the year-earlier period.