Leejam maintains strong long-term investment outlook: CEO

Adnan Al-Khalaf, CEO of Leejam Sports Co.

Leejam Sports Co. has clear expansion plans aimed at cities and neighborhoods, CEO Adnan Al-Khalaf told Argaam in an interview on the sidelines of the Future Investment Initiative (FII) conference.

He added that the long-term investment outlook is still strong, as the number of sites under construction and design reached about 75 sites, which will be opened as soon as they are delivered and necessary licenses are obtained.

The increase in third-quarter net profit was supported by a 17% year-on-year (YoY) increase in revenues. This was accompanied by the opening of a record number of new centers and exceeding the 500,000-member target 15 months ahead of schedule, highlighting the success of the company's expansion strategy, the CEO noted.

He pointed out that there are several factors that contributed to the growth of revenues, the most important of which is to focus on increasing the number of operating centers, enhancing members' participation, renovating more existing clubs, and increasing customer demand for paid programs.

Al-Khalaf further indicated that Q3 2024 profits included a non-recurring profit of SAR 92 million on the sale of three lands in Riyadh. The step was based on the ongoing evaluation of the company’s real estate portfolio, which showed that the sale of these sites was more feasible than their investment. The company replaced these sites with better alternatives for subscribers, featuring larger areas and lower costs.

He added that Leejam’s centers and studios totaled 211 at the end of September 2024, with 14 centers opened during Q3. Meanwhile, the number of "Fitness Time" centers opened in the twelve-month period ending Sept. 30, 2024, stood at around 30.

This demonstrates the company’s strong expansion capabilities and its ability to manage short-term expansion effects, Al-Khalaf noted.

He further stressed that Leejam is well-positioned financially, which enabled it to distribute the highest ever quarterly cash dividend in Q3 2024, at SAR 112 million.

On Q4 2024 expected performance, he indicated that the company continues to focus on expanding through opening new centers during the remainder of the current year within the 2025 plan after the successes it achieved, especially after reaching some goals 15 months before their scheduled date.

According to data available on Argaam, Leejam Sports posted profits of SAR 355 million by the end of the first nine months of 2024, from SAR 227 million a year earlier. Q3 2024 profits amounted to SAR 187 million - thanks to the sale of lands.