BinDawood Holding, one of Saudi Arabia's biggest grocery retailers, has reported a 46.3 per cent drop in its 2021 profit as revenue fell amid coronavirus pandemic-induced headwinds.
Net profit for the full year declined to 240.6 million Saudi riyals ($64.16m), the company said in a statement on Wednesday to the Tadawul stock exchange, where its shares are traded. Revenue slid 15 per cent annually to 4.38 billion riyals.
“Despite working hard to minimise uncertainty and complications, the pandemic continued to directly impact our sales,” said Ahmad BinDawood, chief executive of BinDawood Holding.
“We did not see the anticipated return of travellers to Makkah and Madinah; we were unable to launch our regular promotions and we felt the onset of inflation and some supply chain disruptions.”
Saudi Arabia, the Arab world’s largest economy, is expected to expand 7.7 per cent in 2022 as pandemic-related uncertainty recedes and oil prices trade higher, private equity and investment group Jadwa Investment said. The International Monetary Fund expects the kingdom’s economy to grow 4.8 per cent.
“We are hoping for a more settled period now after a two-year disruption. If religious travellers return and if 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 said.
The company operates 78 shops across the kingdom under two brands, BinDawood and Danube. BinDawood supermarkets’ total revenue reached 3.1bn riyals in 2021 while Danube contributed 1.2bn riyals.
In the fourth quarter, BinDawood group’s profit declined 77 per cent to 13.2m riyals as revenue slid 5 per cent to 1.05bn riyals, the statement said.
"Despite the weak results, we believe the company’s long-term outlook is positive supported by the increase in the number of pilgrims in Makkah and Madinah post the removal of travel restrictions in the first quarter of 2022," SNB Capital said in a note.
BinDawood is also expanding its e-commerce operations. The company this year acquired a 62 per cent stake in its e-commerce partner International Applications Trading Company through its subsidiary Future Technology Retail.
The acquisition is "strongly aligned with BinDawood Holding’s objectives to enhance its position in e-commerce, optimise operations and fortify its omnichannel presence, poising the business for future growth", the company said.
Saudi Arabia's e-commerce market, which grew about 60 per cent in 2019 and 2020 amid a digital surge that accelerated during the pandemic, is poised to hit $13.3bn by 2025, Boston Consulting Group and Meta Platforms said.
The company's board of directors approved second-half dividend payment of 0.65 riyals per share, totalling 74.295m riyals.