Abo Moati profit hurt by lower ink sales, expansion expenses: CEO

Abdullah Saad Mohammed Abo Moati for Bookstores Co. Chief Executive Officer (CEO), Mohamed A. Abo Moati said that the decrease of ink segment sales and leasing revenue, as well higher expansion expenses have affected the company’s profit.

He added that the drop in ink sales is attributed to market recession and introduction of alternative products, noting that the ink segment represents 33% of the company's revenue.

He expected the company to maintain its market share following the market recovery.

The retail sector’s expansion also affected the company’s results, Abo Moati further explained, stressing that the company is working on financing its expansion plans from its the working capital.

Abo Moati opened 2 new branches in the 9 months ended Dec. 31, 2019, and is planning to launch other two in the fourth quarter of fiscal year (FY) 2019/2020, and five more in FY 2020/2021, including Jeddah.

The company reported a decline of 49% year-on-year (YoY) in the rental yields to SAR 1.4 million in 9 months ended Dec. 2019 from SAR 2.8 million in the same period a year earlier, driven by 40% to 50% vacancy rates and lower leasing value.

Abo Moati recorded a net profit after Zakat and tax of SAR 11.02 million for the 9 months ended Dec. 31, 2019, almost a 19% year-on-year (YoY) decrease, Argaam reported earlier.