Saudi Arabia’s Abdullah Al Othaim Markets posted a 113.26% increase in net profit for the second-quarter as customer demand for food and groceries rose during COVID-19 movement restrictions.
Abdullah Al Othaim Markets’ business is in food wholesaling , grocery stores, and malls.
The company posted net profit of 125.25 million riyals ($33.4 million) compared to 58.73 million riyals for the same three months in 2019, it reported in a bourse filing on Monday (August 17).
Al Othaim, which operates around more than 230 stores mainly in Saudi Arabia but also in Egypt, said its sales growth of 18.58% was driven by “high demand by customers to buy food and grocery supplies during the closure periods imposed by the government to mitigate the coronavirus outbreak”.
It also attributed the higher demand to Saudis who had to spend their Eid al Fitr, at the end of May, and their summer holidays at home instead of flying out of the country.
The July 1 start of the threefold increase in value-added tax (VAT) to 15% was also a contributing factor, according to Al Othaim.
The higher sales and profit numbers for the second-quarter translated into a 76.91% increase in net profit for the six-month period of January to June.
JANUARY TO JUNE
Al Othaim earned net profit of 224.8 million riyals for the first-half of the year, compared to 127.07 million riyals for the same period in 2019.
Sales reached 4.954 billion riyals, a rise of 19.94% compared to the 4.13 billion riyals for the same six months last year.
However, the company said its real estate activity was negatively affected by the COVID-10 restrictions. The company said it gave discounts to tenants for the closure periods. The operations of its subsidiaries and associates were also negatively affected, it said.
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