Budget Saudi sees lower revenue from resale of Chinese cars: CEO

Fawaz Danish, CEO of Budget Saudi

United International Transportation Co. (Budget Saudi) recorded lower revenue from sale of used cars due to the resale value of Chinese cars, which constitute the largest percentage of used car sold in the current period, CEO Fawaz Danish told Argaam.

The resale value of used Chinese cars, after operating them for two years, is the least compared to other cars such as Japanese, Korean, and certain European cars, he noted.

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The company’s fleet by the end of 2023 exceeded 36,000 vehicles, Danish said, expecting this number to increase to 50,000 after the acquisition of Al-Jazira Equipment Co. Ltd (AutoWorld).

The acquisition of AutoWorld is in the final stages and awaits the necessary approvals from the competent authorities, in addition to the approval of the company's general assembly, said the CEO, stressing its contribution to the growth of the company’s sales volume.

Short-term leasing contributed to increasing revenues by about 27% in Q1 2024, in addition to higher growth of long-term leasing revenues by 18%.

The top executive also pointed out the high financing costs, even though the lending rate did not exceed 0.35%, saying that the company maintains timely repayment of loans. He believes that the growth of the company’s business volume will rely largely on lending from banks, in addition to the use of cash earned after distributing dividends.

The dividends in the current period were lower in favor of the company's business growth, he added.

Budget Saudi reported net profit growth to SAR 69.7 million in Q1 2024, from SAR 69.3 million in the year-earlier period, data available to Argaam showed.