eXtra’s Q2 2019 profit above estimates, says NCB Cap

United Electronics Co.'s (eXtra) Q2 2019 net profit of SAR 72.5 million topped NCB Capital's estimate of SAR 63.9 million, the brokerage firm said in a recent earnings note.

The year-on-year growth in Q2 2019 net profit was driven by higher revenue, opening of new showrooms and sales of existing stores.

It was also bolstered by an expansion in profit margins due to consumer finance and Al Rajhi’s Murabaha agreement, under which eXtra securitized receivables from installment sales.

The home appliance retailer’s expansion plan is likely to support revenue this year, while growth in consumer finance will boost its profit margins. 

NCB Capital added that it recommends a “neutral” rating on eXtra with a target price of SAR 59.7.