Fawaz Abdulaziz Alhokair Co. (Cenomi Retail) Announces Its Interim Financial Results for the Period Ending on 30 June 2024 (Six Months)
| Element List | Current Quarter | Similar quarter for previous year | %Change | Previous Quarter | % Change |
|---|---|---|---|---|---|
| Sales/Revenue | 1,260.6 | 1,426.8 | -11.648 | 1,329.8 | -5.203 |
| Gross Profit (Loss) | 206.7 | 299 | -30.869 | 117.2 | 76.365 |
| Operational Profit (Loss) | 176.2 | 254.9 | -30.874 | -29 | - |
| Net profit (Loss) | 84.1 | 169.8 | -50.471 | -151.7 | - |
| Total Comprehensive Income | 77.4 | 156.1 | -50.416 | -201 | - |
| All figures are in (Millions) Saudi Arabia, Riyals | |||||
| Element List | Current Period | Similar period for previous year | %Change |
|---|---|---|---|
| Sales/Revenue | 2,590.4 | 2,757.6 | -6.063 |
| Gross Profit (Loss) | 323.9 | 455 | -28.813 |
| Operational Profit (Loss) | 147.2 | 283.7 | -48.114 |
| Net profit (Loss) | -67.6 | 113.8 | - |
| Total Comprehensive Income | -123.6 | 82.9 | - |
| Total Shareholders Equity (after Deducting Minority Equity) | -929.9 | 428.9 | - |
| Profit (Loss) per Share | -0.6 | 0.98 | |
| All figures are in (Millions) Saudi Arabia, Riyals | |||
| Element List | Amount | Percentage of the capital (%) | |
|---|---|---|---|
| Profit (Losses) Resulting From The Change In Investment Propertie’s Fair Value | - | - | |
| All figures are in (Millions) Saudi Arabia, Riyals | |||
| Element List | Explanation |
|---|---|
| The reason of the increase (decrease) in the sales/ revenues during the current quarter compared to the same quarter of the last year is | Cenomi Retail reported revenues of SAR 1,261 million in Q2-24, declining 12% YoY, which is essentially the result of the brands divestment program that was announced last quarter, as well as current geopolitical events. |
Saudi retail revenues of SAR 847 million, declined 19% YoY due to the shift in the Holy month of Ramadan this year, and the continued execution of the brands sales.
For international retail, revenues amounted to SAR 330 million in Q2-24, up 15% YoY, primarily supported by a robust performance from the CIS, especially, Azerbaijan (+19% YoY in Q2), Georgia (+18% YoY), and Uzbekistan which has outperformed its targeted plans by 217%.
F&B segment reported a decline of 13% YoY in revenues to SAR 84 million in Q2-24, as 4 outlets were closed. Nevertheless, the segment achieved robust margins, with gross margin of 20.8% in Q2 and EBITDA margin of 6.3%. The company remains focused on Tier 1 and popular Champion brands such as Cinnabon, Subway, to further enhance the segment’s performance.
Online sales came in at SAR 83 million in Q2-24, decreasing 8% YoY, with the online revenue contribution to total retail revenue (including F&B) expanding to 7.1% in Q2-24, from 6.8% in Q2-23.
This was primarily the result of:
• A decrease in the cost of revenue by 7% YoY to SAR 1,054 million in Q2-24, due to a decline in rent expenses, salaries and other expenses.
• A decline in SG&A expenses by 9% YoY to SAR 109 million in Q2-24, primarily due to a drop in advertising expenses.
• An increase in other operating income by 22% YoY in Q2-24 to SAR 138 million, as a result of the brands divestment program that resulted in a capital gain of SAR 131 million
• Net finance expenses decreased 9% YoY to SAR 76 million compared to SAR 84 million in Q2-23 , mainly driven as a result of repayment of SAR 421 million of debt during 2024.
• An increase in Zakat and income tax expense by 3% YoY to SAR 13 million, from SAR 12 million in Q2-23.
Saudi retail revenues of SAR 847 million, declined 13% QoQ due to the shift in the Holy month of Ramadan this year, and the brands divestment program.
For international retail, revenues amounted to SAR 330 million in Q2-24, an increase of 23% QoQ, as the CIS continued to sustain its strong positive momentum. Uzbekistan surged 147% QoQ, while Azerbaijan and Georgia increased 30% and 19% QoQ, respectively, in Q2. It is worth highlighting that Q1 reflected only a partial impact from Uzbekistan, as it was launched in February 2024.
F&B segment reported a marginal drop of 3% QoQ, with revenues of SAR 84 million in Q2-24. However the segment witnessed an improvement in both gross margin and EBITDA margin compared to the last quarter. Gross margin increased from 18.2% in Q1 to 20.8% in Q2, and EBITDA margin increased from 5.0% in Q1 to 6.3% in Q2.
Online sales came in at SAR 83 million in Q2-24, largely unchanged from the previous quarter, with the online revenue contribution to total retail revenue (including F&B) increasing to 7.1% in Q2-24, from 6.7% in Q1-24.
• A decline in the cost of revenue by 13% QoQ to SAR 1,054 million in Q2-24, supported by a decline in rent expenses, salaries and other expenses.
• A decline in SG&A expenses of 22% QoQ to SAR 109 million in Q2-24, due to store closures, the brands divestment program and the shift in the Holy month of Ramadan.
• An increase in other operating income by a substantial 178% QoQ in Q2-24 to SAR 138 million, as a result of the brands divestment program, resulting in a capital gain of SAR 131 million.
• Net finance expenses dropped 19% QoQ to SAR 76 million, compared to SAR 94 million in Q1-24 mainly driven as a result of repayment of SAR 421 million of debt during 2024.
• An increase in Zakat and income tax expense by 7% QoQ to SAR 13 million from SAR 12 million in Q1-24.
Saudi retail revenues of SAR 1,821 million, decreased 11% YoY, due to our portfolio optimization program, which saw the sale of 19 brands within the Kingdom in H1-24.
International retail operations generated revenues of SAR 599 million in H1-24, up 15% YoY, largely supported by a robust performance by the CIS. Azerbaijan witnessed an improvement of 22% YoY in H1-24, while Georgia increased 16% YoY. Meanwhile, Uzbekistan outperformed its targeted plans by 217%.
F&B segment reported revenues of SAR 170 million in H1-24, down 10% YoY, with a net closure of 1 store. Margins continued to be strong, with gross margin of 19.5%, and EBITDA margin of 5.6% in H1-24.
Online sales amounted to SAR 167 million in H1-24, decreasing 6% YoY, with online revenue contribution to total retail revenue (including F&B) remaining relatively unchanged in H1.
• A decrease in the cost of revenue by 2% YoY to SAR 2,267 million in H1-24, backed up by a decline in rent expenses, salaries and utilities and maintenance expenses.
• A slight decline in SG&A expenses of 3% YoY to SAR 250 million in H1-24, due to a decrease in advertising expenses .
• An increase in other operating income by 9% YoY in H1-24 to SAR 188 million, as a result of the brands divestment program, resulting in a capital gain of SAR 165 million
• Net finance expenses increased 8% YoY to SAR 170 million in H1-24, mainly driven by the repayment of SAR 421 million of debt during 2024.
• A decrease in Zakat and income tax expense by 46% YoY to SAR 24 million in H1-24, from SAR 17 million in H1-23.
MATERIAL UNCERTAINITY RELTAED TO GOING CONCERN
We draw attention to note (3.2) of the accompanying interim condensed consolidated financial information, which indicates that the Group incurred a net loss of SR 67.6 million for the period ended
30 June 2024, and as of that date it recorded accumulated losses of SR 1,475 million. In addition, the Group’s current liabilities exceeded its current assets by SR 2,906 million as of 30 June 2024. These events or conditions, along with other matters as set forth in details in note (3.2) to the accompanying interim condensed consolidated financial statements, indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our conclusion is not modified in respect of this matter.
On March 31, 2024, Cenomi Retail announced the Signing of a Variation Agreement to the Share Purchase Agreement dated 15/07/1444H (corresponding to 06/12/2023G) with Abdullah Al-Othaim Fashion Company to Sell the franchise rights for 5 Brands: Aldo & Aldo Accessories, Charles & Keith, Pedro and La Vie En Rose, delivering on transformation promise.
On March 31, 2024, Cenomi Retail announced Board's recommendation to decrease the company's capital and board approval of a program to sell non-essential brands.
Q2-24 announcements
On April 18, 2024, Cenomi Retail announced the results of the extraordinary general assembly meeting (the first meeting).
On May 07, 2024, Cenomi Retail announced the resignation of a board member.
Subsequent announcements
On July 01, 2024, Cenomi Retail announced the results of the ordinary general assembly meeting (first meeting).
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