Al Othaim core business grows, market share rises to 20%: CEO

Muaffaq Mubarah, CEO of Abdullah Al Othaim Markets Co.

Muaffaq Mubarah, CEO of Abdullah Al Othaim Markets Co., said that the company’s core business witnessed growth in terms of sales and profitability despite declining profits during the first quarter of 2024.

Operating profits grew by 5.7% year-on-year (YoY), while market share increased from 18.9% to 20%, the CEO told Al Arabiya.

Mubarah noted that the decrease in profits was due to the cost of financing. According to the accounting standard, financing costs were higher in the first years than in the subsequent ones, which affected earnings by about SAR 4.7 million. 

In addition, earnings were further affected by the decline in the profit of some associates and the deposit returns by about SAR 2 million and SAR 5 million, respectively.

The CEO pointed out that the cost of financing in the first years was higher according to the accounting standard as it was gradual, but the costs remained stable. The branches achieved the desired earnings within a period ranging from one to four years, depending on the branch.

Deposits are considered a side activity, Mubarah said, adding that the company has more than one option, including distributing dividends, investing in deposits, or engaging in the core activity. The company aims to balance its investment opportunities and dividend distribution.

During previous years, dividends were in line with announced profits, which is evidence of positive cash flows that was reflected in business growth and dividend distribution, the CEO highlighted.

According to data available on Argaam, Al Othaim reported a net profit of SAR 116.4 million in Q1 2024, a decline of 3% from SAR 120 million in the year-earlier period.