eXtra reports positive results in 2023, sees growing market share: CEO

Mohamed Galal, CEO of United Electronics Co. (eXtra)

United Electronics Co. (eXtra) delivered positive annual results and achieved significant strides in 2023, thanks to the continued robust growth, Managing Director and CEO Mohamed Galal told Argaam.

Galal further attributed eXtra’s strong topline in 2023 to strategies and expansion plans, reflecting growth of the company’s market share.

The home appliances retailer saw a challenging 2023, especially amid interest rate hikes which weighed on the full-year profitability as financing costs increased.

In 2023, eXtra’s annual earnings were also hit by the termination of expansion plans in Egypt. In addition, the company posted one-off revenues in the year before.

The retail business division posted slightly higher sales volumes in 2023. This is despite an 8.3% year-on-year (YoY) slowdown in the electronics market across the Kingdom.

Additionally, eXtra launched a new version of its online app by the end of H1 2023, Galal stated, noting that online sales rose by 19% in Q4 2023, accounting for 22.7% of the company’s total sales, with 2023 sales up 5.4% YoY.

Moreover, the consumer finance segment made a net profit of SAR 212.3 million in 2023, compared to SAR 193.6 million in the year before. This was primarly propelled by 20% growth in United Company for Financial Services’ (Tasheel Finance) financing portfolio to over SAR 1.9 billion in 2023, the top executive further stated.

Commenting on the potential initial public offering (IPO) of eXtra subsidiary, Tasheel Finance, Galal said it is early to determine the uses of the offering proceeds, noting that eXtra is awaiting the Capital Market Authority’s (CMA) approval on the move. The main purpose of the offering is to introduce actual value to shareholders and distribute exceptional dividends, he added.

Galal also pointed to the potential future opportunities, as the Kingdom’s distinctive demographic composition and its well-established economy stand as key factors for the market’s growth in the medium and long terms.

According to data available on Argaam, eXtra’s net profit declined 11% to SAR 390.5 million in 2023, from SAR 440.2 million a year earlier, with Q4 earnings at SAR 126.2 million.