Al Othaim maintains profit margins despite lower sales: CEO

Muaffaq Mubarah, CEO of Abdullah Al Othaim Markets Co.

Abdullah Al Othaim Markets Co.’s sales grew in 2023 to SAR 10.2 billion, compared to SAR 9.5 billion in 2022. Further, operating profit (excluding capital gains) rose by about 3.2% last year, said CEO Muaffaq Mubarah.

In statements to Al Arabiya TV, the CEO said that, despite the decline in sales of some of the company’s products, such as oils and poultry, Al Othaim managed to maintain its profit margin through operational efficiency.

He also indicated that the company intends to expand in Jeddah by opening new branches there.

Al Othaim witnessed an increase in rental prices, especially in major cities such as Riyadh and Jeddah. However, it has long-term contracts in Riyadh for about 140 branches.

The company’s expansion of its branch network will be focused on Jeddah rather than Riyadh, where expansion will be limited. Given the increase in rents, there will be higher return on sales per square meter, which is normal, according to the top executive.

As for Al Othaim’s operations in Egypt, the CEO said, "Our profits in Egypt grew in 2023 by 27%, denominated in Saudi riyals and not in Egyptian pounds.” He explained that this was driven by purchases in the Egyptian market, where the company buys and sells in the Egyptian pound, with no overseas imports.

He pointed out that the number of the company's branches in Egypt reached 50 by the end of 2023. The addition of about five to six branches is in the pipeline for the country in 2024.

The company posted a net profit of SAR 487.5 million for 2023, compared to SAR 1.07 billion in 2022, according to Argaam's data.