BinDawood’s 2021 net profit in Saudi Arabia plummets as revenue plummets amid pandemic

BinDawood Holding, one of Saudi Arabia’s largest grocery retailers, reported a 46.3% drop in profits in 2021 as revenue tumbled amid headwinds induced by the coronavirus pandemic.

Net profit for the full year fell to 240.6 million Saudi riyals ($64.16 million), the company said in a statement. declaration Wednesday on the Tadawul stock exchange, where its shares are traded. Revenues fell 15% annually to 4.38 billion riyals.

“Despite hard work to minimize uncertainty and complications, the pandemic continued to have a direct impact on our sales,” said Ahmad BinDawood, Managing Director of BinDawood Holding.

“We have not seen the expected return of travelers to Mecca and Medina; we were unable to launch our regular promotions and felt the onset of inflation and some supply chain disruptions.

Saudi Arabia, the largest economy in the Arab world, is expected to grow 7.7% in 2022 as pandemic-related uncertainty fades and oil prices rise, the capital group says -investment and investment Jadwa Investment. The International Monetary Fund expects the kingdom’s economy to grow by 4.8%.

“We hope for a more stable period now after a two-year hiatus. If religious travelers return and we are allowed to undertake promotional campaigns as before, we expect our performance to improve given all the investment and forward planning we have undertaken,” Mr. BinDawood.

The company operates 78 stores across the kingdom under two brands, namely BinDawood and Danube. BinDawood supermarkets’ total revenue reached 3.1 billion riyals in 2021 while the Danube contributed 1.2 billion riyals of revenue.

In the fourth quarter, BinDawood Group’s profit fell 77% to 13.2 million riyals as revenue fell 5% to 1.05 billion riyals, the statement said.

“Despite the weak results, we believe the long-term outlook for the business is positive, supported by increased pilgrim numbers to Mecca and Medina following the removal of travel restrictions in the first quarter of 2022,” he said. SNB Capital said in a note.

Earlier this month, Saudi Arabia lifted all remaining travel restrictions related to Covid-19. Visitors are no longer required to present a vaccination certificate or PCR test result upon arrival in the kingdom. The government has also removed quarantine requirements.

BinDawood is also expanding its e-commerce business. Earlier this year, the company acquired a 62% stake in its e-commerce partner International Applications Trading Company (IATC) through its subsidiary Future Technology Retail.

The acquisition is “strongly aligned with BinDawood Holding’s goals to improve its position in e-commerce, optimize its operations and strengthen its omnichannel presence, preparing the business for future growth,” the company said.

Saudi Arabia’s e-commerce market, which grew by around 60% in 2019 and 2020 amid a digital boom that accelerated during the pandemic, is poised to reach $13.3 billion by 2025according to Boston Consulting Group and Meta Platforms.

The company’s board of directors approved the payment of a second-half dividend of 0.65 riyals per share, for a total of 74.295 million riyals.

Updated: March 30, 2022, 11:10 a.m.

Sallie R. Loera