Al Othaim posts 42% profit drop to SAR 57.7 mln in Q1 2021

Abdullah Al Othaim Markets Co. reported a plunge of 42% in net profit after Zakat and tax to SAR 57.7 million for the first quarter of 2021, from SAR 99.6 million in the year-ago period.

The profit fall was attributed to a sales decline of 11.87% year-on-year (YoY), as the first quarter of 2020 witnessed abnormal growth in retail sales, as a result of high demand to buy groceries and food supplies, as a precaution to the COVID-19 preventive measures.

In addition, sales were negatively affected by the increase in the value-added tax (VAT) as of July 1, 2020, and the shift of schools to distance learning.

When compared to Q4 2020, the company’s net profit after Zakat and tax tumbled 65% from SAR 165.14 million, as the previous quarter’s financial results included annual target incentives, which are calculated and recognized at the end of the fiscal year. Moreover, the company reported a decline in real estate revenues, despite the growth in sales by 2.56% on a quarterly basis and the improvement in the performance of the associates.

Shareholders’ equity, excluding minority interest, dropped by 9.76% to SAR 1.308 billion by the end of Q1 2021, compared to SAR 1.449 billion in the year-ago period.