Cenomi Retail loss widens to SAR 151.8M in Q1 2024

Fawaz Abdulaziz Alhokair Co. (Cenomi Retail) deepened Q1 2024 net losses to SAR 151.8 million, from SAR 55.4 million in Q1 2023.

The higher losses were attributed to flat revenues in the first quarter of 2024 at SAR 1.32 billion.

Cenomi Retail’s international retail revenues improved to SAR 269.0 million in Q1 2024, growing 10.4% year-on-year (YoY). However, retail revenues in Saudi Arabia shrank by 2.0% to SAR 974.5 million due to Ramadan seasonality, geopolitics, store closures and discounting of seasonal inventory.

Elsewhere, franchise exits and store closures led to a 7.1% YoY decline in the food and beverages (F&B) revenues to SAR 86.5 million by the end of the first three months of 2024.

The cost of revenue, meanwhile, increased 3.2% from SAR 1.17 billion in Q1 2023 to SAR 1.21 billion in Q1 2024, despite the decrease in rent, payrolls and other expenses.

Net finance costs climbed by 27.9% to SAR 93.5 million in Q1 2024, compared to SAR 73.1 million in Q1 2023. The cost of loans and borrowings also increased 2.78 % YoY during the same quarter.

Moreover, the fashion retailer tripled losses from discontinued operations to SAR 17.2 million in Q1 2024, compared to SAR 5.6 million in the prior-year period. This increase was primarily driven by selling franchises for 16 of Cenomi Retail’s brands to Al Othaim Investments.

Sequentially, the company narrowed net losses from SAR 1.08 billion in Q4 2023, as revenues soared quarter-on-quarter (QoQ) given the 64.5% quarterly rise in the company’s share of an associate company’s Q1 2024 business results, besides recording SAR 60,000 gains on the sale of property and equipment during the same quarter.

The retail revenue in Saudi Arabia grew by 55% QoQ to SAR 974.5 million on the sales of the holy month of Ramadan.

On the other hand, international retail revenues decreased 7.9% QoQ to SAR 268.9 million in Q1 2024.

F&B revenues contracted by 4.8% sequentially to SAR 86.5 million.

Shareholders’ equity, after minority interest, stood at SAR 979.05 billion as of March 31, 2024, compared to SAR 365.96 million a year earlier.

Accumulated losses reached SAR 1.55 billion by the end of the three-month period, accounting for 135.6% of the company’s capital.

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