Elm extends, raises SAR 570 mln contract with government entity to operate centers

Logo of Elm Co.

Elm Co. obtained today, March 24, an extension and an increase in the contract to operate services centers with a government agency, with a value of SAR 569.96 million (inclusive of value added tax (VAT)), according to a bourse filing today.

The contract, which was signed on February 2021, extended for six months, as Elm has to provide and set up centers, rent some of them, and provide operating staff.

In addition, it will design an operating model that includes customer’s journey within the operated centers and execute a number of transactions through these centers.

Elm explained that since this is a contract extension for a previously contract obtained in 2021, the financial impact of this contract will be distributed over the fiscal years 2021 and 2022 according to the number of transactions executed in each year until the end of the contract term.

Approximately 50% of the contract value was executed and calculated in 2021, it noted.

The statement indicated that the entitlement to the contract is based on performance, which is calculated based on the number of transactions that are executed, and therefore revenues in 2022 will be linked to the number of executed transactions.