Abu Dhabi, UAEMonday 6 April 2020

Saudi electronics retailer Extra reports double-digit profit growth

Company increased like-for-like sales, opened new outlets and sold more goods online last year

Saudi Arabia will remain the world's largest Islamic banking market, according to Moody's report. REUTERS/Faisal Al Nasser
Saudi Arabia will remain the world's largest Islamic banking market, according to Moody's report. REUTERS/Faisal Al Nasser

United Electronics Company, the Saudi retail company better known as Extra, reported a 14.6 per cent year-on-year increase in net profit in the fourth quarter of 2019 on the back of higher sales.

Net profit grew to to 72.3 million riyals (Dh70.8m) in the three months to December as revenue climbed 16 per cent to 1.88 billion riyals, the company said in a statement to the Saudi stock exchange, where its shares trade.

"The growth in net profit resulted from [a] sales increase across all [of the] company's divisions in general," the company said in a statement, adding that it also benefitted from higher revenue from its services and consumer finance business lines.

For the full year, the company reported a 27.7 per cent increase in net profit to 205.8m riyals, as sales rose 16.9 per cent to 5.1bn riyals. It attributed the rise to like-for-like sales growth in its stores, the opening of four new outlets, a growth in online sales and increased revenue from its consumer finance and services businesses.

The company's performance was described as "another impressive results set" in an analysts' note by EFG Hermes, as it continued to deliver double-digit growth.

"Extra remains one of our top picks in Saudi Arabia," the Egyptian investment bank said. "It should continue to benefit from market share gains, solidifying its standing in electronics retail, and we believe its new consumer finance arm will be the key engine for its future growth once market consolidation benefits begin to wind down."

It has a target price of 100 riyals on the company's shares, which closed at 78 riyals at the end of last week.

Updated: January 19, 2020 04:45 PM

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