Saudi Tadawul Group posts 227% rise in net profit in 2020 ahead of listing

The group's revenue rose by more than 91% during the period

Visitors look at stock price information displayed on a digital screen inside the Saudi Stock Exchange, also known as the Tadawul, in Riyadh, Saudi Arabia, on Tuesday, April 10, 2018. Foreign investors bought more Saudi stocks in March than ever before in anticipation of the kingdom���s upgrade to emerging-market status. Photographer: Abdulrahman Abdullah/Bloomberg

Saudi Tadawul Group, the recently formed holding company which operates the kingdom's bourse, posted a 227 per cent rise in net profit in 2020 as trading activity picked up.

The group's net profit for the year after Zakat reached 500.5 million Saudi riyals ($133.46m), the company said in a statement on Thursday. Profit for the year before Zakat increased by 281 per cent to 584 million riyals.

Revenue rose by more than 91 per cent to touch 1.1 billion riyals last year, boosted by a 141 per cent growth in trading commissions.

"The Exchange delivered a commendable performance during 2020, despite the adverse conditions local and global markets faced," said Khalid Al-Hussan, chief executive of Saudi Tadawul Group.

"It has proven tenacious and resilient, as it recorded an impressive and strong financial performance over the past year."

Tadawul, which is the ninth largest exchange in the world with a market capitalisation of $2.6 trillion, will become only the third publicly-traded regional stock exchange after the Dubai Financial Market and Boursa Kuwait.

Saudi Tadawul Group has four wholly-owned subsidiaries including the Saudi Exchange, the Securities Clearing Centre Company (Muqassa), the Securities Depository Centre Company (Edaa) and Wamid – a new technology services business.

The group also reported a 203 per cent rise in gross profit, which reached 723 million riyals last year.

The number of qualified foreign investors increased from 1,939 in January 2020 to over 2,300 at the end of the year, a rise of approximately 18.6 per cent.

The company's operating costs rose nine per cent to reach 356 million riyals while general and administrative expenses decreased by approximately eight per cent to 180 million riyals.

Saudi Tadawul Group is also on track to list on the kingdom's main market later this year. Earlier this year, the company said it appointed NCB Capital, JP Morgan and Citigroup to advise on its initial public offering.

"The IPO will provide an important strategic dimension to realise the group’s expansion plans, strengthen its position globally and align its growth objectives with the Public Investment Fund’s strategy to boost the economic transformation of Saudi Arabia," the company said in a statement at the time.