SGS Q4 losses driven by fewer flights, better Q1 2021 expected: Acting CEO

Raed Al-Idrissi, Acting CEO of SGS  

Saudi Ground Services co. (SGS) incurred losses in the fourth quarter of 2020, due to a decline in the number of flights amid the COVID-19 pandemic. This decline had a direct impact on the fourth-quarter revenue that fell by SAR 242 million, when compared to Q4 2019, acting CEO Raed Al-Idrissi told Argaam in a telephone interview.

The drop in earnings would have been steeper if the company failed to launch initiatives that slashed operating expenses by 31%, or SAR 147 million, when compared to 2019.

When compared to the third quarter of 2020, Al-Idrissi said that SGS revenue rose 40% in the last quarter of the year, thanks to the increased number of domestic and international flights. Accordingly, revenue grew by SAR 89 million.

The two-week suspension of international flights in December 2020, due to the new strains of COVID-19, reduced total revenue by nearly 13% in the month.

Elsewhere, Al-Idrissi expects better performance in the first quarter of the year, unless there are negative updates on the COVID-19 crisis, adding: “We’re looking forward to more optimistic news about the full resumption of air traffic.”

SGS turned to a net loss after Zakat and tax of SAR 454.3 million for 2020, from a net profit of SAR 423.4 million a year earlier, Argaam reported.