eXtra’s Profits Increase to SAR 205.6 Million (+28%) at the End of 2019, Fourth Quarter Profits Reach SAR 72.1 Million (+14%)
The profits of electronics and home appliances retailer the United Electronics Company (eXtra) increased to SAR 205.6 million at the end of 2019, registering a 28% increase compared to the SAR 161.2 million profit reached during the same time in 2018.
Financial Summary (Millions)
|
Item |
2018 |
2019 |
Change |
|
Revenue |
4,394.08 |
5,134.60 |
16.9% |
|
Gross profit |
779.61 |
901.18 |
15.6% |
|
Operating profit |
180.00 |
248.77 |
38.2% |
|
Net profit |
161.19 |
205.61 |
27.6% |
|
Average number of shares |
50.00 |
50.00 |
- |
|
Earnings per share (SAR) |
3.22 |
4.11 |
27.6% |
The company stated that the reason for the increase in profits during the current period compared to the same period last year is due to the following:
Sales increased by 16.9% compared to the same period in the previous year, with 2019 sales surpassing the SAR 5 million mark due to increased sales in existing show rooms, increased e-commerce sales, and the increase in revenue of services such as eXtra services and consumer financing services.
This is in addition to the opening of four show rooms this year, leading to a 15.5% increase in gross profit compared to the same period in the previous year, which resulted in a 27.7% increase in net profit compared to the same period in the previous year.
Quarterly Comparison (Millions)
|
Item |
Q4 2018 |
Q4 2019 |
Change |
|
Revenue |
1,619.25 |
1,880.54 |
16.1% |
|
Gross profit |
269.38 |
301.04 |
11.8% |
|
Operating profit |
69.27 |
91.45 |
32.0% |
|
Net profit |
63.08 |
72.09 |
14.3% |
|
Average number of shares |
50.00 |
50.00 |
- |
|
Earnings per share (SAR) |
1.26 |
1.44 |
14.3% |
The company also attributed the increase in profits during the current quarter compared to the same quarter of the previous year to the following:
The increase in sales in all departments during the fourth quarter in general and during the annual discount festival in particular, as well as the increase in revenues of eXtra services and consumer financing services, which resulted in an 11.4% increase in gross profit compared to the same quarter in the previous year, leading to a 14.6% increase in net profit.
This is in spite of the following:
- The decrease resulting from the rapid recording of revenues of installment sales amounting to SAR 7.6 million based on the murabaha contract signed with Al Rajhi Bank to sell part of the receivables portfolio for installment sales, the positive impact of which appeared in the second quarter results with a total amount of SAR 17.2 million, which was announced separately on 27 June 2019.
- Increase in operating expenses compared to the same quarter in the previous year.
The company attributed the increase in profits during the current quarter compared to the previous quarter to the following:
Increase in sales in all departments during the fourth quarter in general and the annual discount festival in particular.
Increase in the revenues of eXtra services and consumer financing services compared to the previous quarter, which led to an increase in gross profit and therefore had an effect on the increase in net profit in the current quarter compared to the previous quarter.
Additional remarks:
The company stated that the total shareholders’ equity (there are no minority rights) reached SAR 659.91 million at the end of the current period.
The increase in property rights reached 15.2% after excluding the financial impact resulting from applying IFRS 16 as of 1 January 2019, which led to a decrease in the retained earnings of SAR 84 million.
Some of the balances of the comparative period have been reclassified to conform to the presentation of the current period.
Development of Financial Results (Millions)
|
Period |
Revenue |
Change |
Gross profit |
Change |
Net profit |
Change |
Earnings per share (SAR) |
|
Q1 2019 |
1,057.51 |
22.3% |
187.98 |
23.1% |
33.83 |
56.8% |
0.68 |
|
Q2 2019 |
1,161.50 |
14.4% |
226.46 |
22.3% |
72.46 |
58.9% |
1.45 |
|
Q3 2019 |
1,035.06 |
15.7% |
185.71 |
7.9% |
27.23 |
(12.0%) |
0.54 |
|
Q4 2019 |
1,880.54 |
16.1% |
301.04 |
11.8% |
72.09 |
14.3% |
1.44 |
|
2019 |
5,134.60 |
16.9% |
901.18 |
15.6% |
205.61 |
27.6% |
4.11 |
Profitability Ratios
|
Period |
Gross profit margin |
Net profit margin |
|
Q1 2019 |
17.78% |
3.20% |
|
Q2 2019 |
19.50% |
6.24% |
|
Q3 2019 |
17.94% |
2.63% |
|
Q4 2019 |
16.01% |
3.83% |
|
2019 |
17.55% |
4.00% |
Share Details (SAR)
|
Period |
Average number of shares (millions) |
Earnings per share |
Earnings per share before exceptions |
Book value |
|
Q1 2019 |
50.00 |
3.47 |
3.47 |
11.94 |
|
Q2 2019 |
50.00 |
4.01 |
3.66 |
12.17 |
|
Q3 2019 |
50.00 |
3.93 |
3.49 |
11.75 |
|
Q4 2019 |
50.00 |
4.11 |
3.67 |
13.20 |
Valuation Multiples (according to the share price at the end of the period)
|
Period |
Price-earnings ratio |
Operating price-earnings ratio |
Price-to-book ratio |
|
Q1 2019 |
17.32 |
17.32 |
5.03 |
|
Q2 2019 |
16.85 |
18.46 |
5.55 |
|
Q3 2019 |
18.57 |
20.90 |
6.21 |
|
Q4 2019 |
18.21 |
20.39 |
5.68 |
Average Analyst Forecast (Millions)
|
Item |
Q4 2019 (forecast) |
Q4 2019 (actual) |
Change |
|
Average |
65.00 |
72.09 |
10.90% |
Comparison of Analysts’ Forecast with Actual Results (Millions)
|
Item |
Q4 2019 (forecast) |
Q4 2019 (actual) |
Deviation percentage |
|
Al Rajhi Capital |
67.00 |
72.09 |
7.1% |
|
Al Ahli Capital |
63.00 |
72.09 |
12.6% |
Financial Indicators
|
|
Current |
|
Market value (SAR million) |
2,960.00 |
|
Number of shares (million) |
50.00 |
|
Earnings per share (SAR) (last 12 months) |
4.11 |
|
Book value (SAR) (for last declared period) |
13.20 |
|
Recurring revenue (last 12 months) |
14.40 |
|
Price-to-book ratio |
4.49 |
|
Return on average assets (%) (last 12 months) |
8.9 |
|
Return on average equity (%) (last 12 months) |
31.5 |
|
Organization value (millions) |
4,042.03 |
