Americana, the largest quick-service restaurant operator in the Mena region, reported a nearly 10 per cent rise in its third-quarter net income on higher revenue amid plans to open new restaurants across the region.
Net profit attributable to the shareholders of the parent company for the three months to the end of September reached $81.9 million, Americana said on Thursday in a regulatory filing to the Abu Dhabi Securities Exchange, where its shares are traded.
Net profit for the reporting period increased by 21.5 per cent, after adjusting for the negative impact of “hyperinflationary accounting for the Lebanon business and currency devaluation in Egypt of around $8.7 million”, Americana said.
“This growth is on account of revenue growth and improved operational efficiencies, with the support of normalising commodity inflation,” it said.
Revenue for the July-September quarter rose by about 6 per cent on an annual basis.
Americana’s nine-month net profit jumped by about 16 per cent, year on year, to $226.7 million, driven by business growth and improved operational efficiency, as well as the impact of one-off tax claim charges in Egypt of $24.9 million during the same period in 2022.
The company said it managed to post net income growth for January-September period despite “higher depreciation charges related to accelerated new store openings of $6.5 million … and [the] negative impact of hyperinflationary accounting for the Lebanon business and currency devaluation in Egypt of around $10 million compared to same period last year”.
Revenue for the first nine months of 2023 rose by 7.1 per cent on an annual basis to $1.89 billion, supported by “continuing like-for-like revenue growth” and a growing restaurant portfolio in the Mena region and Kazakhstan.
The company said its like-for-like revenue for the reporting period jumped by 6 per cent, driven by a “robust performance of the company’s three power brands – KFC, Pizza Hut and Hardee’s”.
Americana, a franchisee of a number of international food beverages brands in the Middle East, raised $1.8 billion from its initial public offering in November last year.
It is dually listed on Saudi Arabia's main Tadawul stock market and the ADX, the Arab world's two largest stock markets.
Americana's IPO was the largest in Saudi Arabia last year. It was also the first company to be dually listed in the kingdom and the UAE.
The company sold more than 2.52 billion shares, or 30 per cent stake of its issued share capital, with the IPO drawing strong demand from institutional and retail investors that generated $105 billion worth of orders. It started trading in December.
Saudi Arabia's sovereign wealth fund, the Public Investment Fund, and Mohamed Alabbar, founder and managing director of Dubai's Emaar Properties, bought a 30 per cent stake in the company's issued share capital.
Americana, which was founded in Kuwait in 1964, introduced fast-food restaurants in the region in 1970. It was previously traded on the Kuwait Stock Exchange but delisted its shares in 2017.
It is the largest out-of-home dining operator in 12 countries across the Mena region and Kazakhstan, and operates food chains such as Peet’s Coffee, Costa Coffee, Hardees, Baskin Robbins, Krispy Kreme, Wimpy and TGI Fridays.
Americana plans to continue pursuing its expansion drive across markets and will add 250 to 260 “net new restaurants” this year, with a particular focus on expanding the number of outlets in Saudi Arabia, the Arab world’s largest economy.
The company also aims to enhance profit margins by improving operational efficiency and taking measures to normalise commodity prices.
“While recent geopolitical developments [Israel-Gaza war] may have some impact on short-term performance, the company remains positive about the general business environment and its outlook for long term performance,” Americana said.
The company unveiled plans in September to set up a poultry feed plant in Ethiopia to support business growth.
“I am really excited about starting a poultry feed plant in Addis Ababa,” Mr Alabbar told the Future Hospitality Summit in Abu Dhabi at the time.
“In the Arab world, we have a shortage of chicken feed … 65 per cent of the cost of the chicken is the feed and none of us in the Arab world is able to produce the feed because we don't produce soya, we don't produce corn.”
