Americana, the largest quick-service restaurant operator in the Mena region, has reported a 19 per cent drop in its first-quarter profit, despite a rise in revenue as it expands its restaurants portfolio.
Net profit attributable to the shareholders of the parent company for the three months to the end of March declined to $58 million, from $72 million during the same period last year, the company said in a statement on Thursday to the Abu Dhabi Securities Exchange, where its shares are traded.
Americana's profit was affected by the partial seasonal shift of Ramadan from the second quarter of 2022 to the first quarter of 2023, as well as by currency devaluation in Egypt and Lebanon, it said.
Revenue for the period rose 2 per cent annually to $589 million, driven by the “resilient performance of some of the company’s power brands” and the continued expansion programme of its restaurant portfolio.
Eliminating the seasonal impact of the holy month from quarterly performance, quarterly revenue increased by 7.5 per cent year-on-year, according to the company.
“Americana restaurants’ medium-term objective is to double revenues while targeting healthy mid-single digit like-for-like growth in sales, opening between 250-300 net new restaurants per year,” the company said.
“[The] management believes that Saudi Arabia provides a particularly compelling opportunity for restaurant expansion, while Iraq offers an exciting greenfield opportunity. During the current period of economic headwinds in Egypt, the company will focus on operations, people transformation and cost efficiencies.”
Americana, which raised $1.8 billion from its initial public offering in November last year, dual-listed on Saudi Arabia's main Tadawul market and the ADX, the Arab world's two largest stock markets.
Americana's IPO was the largest in Saudi Arabia last year and 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, 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 restaurant chains such as Pizza Hut and KFC.
The company expects to achieve improvements in gross profit margins in the second half of 2023, “as existing and strategically built inventory is phased out”, it said on Thursday.
It also expects the impact of Ramadan on sales to be comparatively less in the second quarter of this year compared to the second quarter of last year, during which the entire holy month fell.
