The CEO of the United Electronics Company “Extra”, Muhammad Jalal, said that moving the sales season from the last quarter of 2022 to the second quarter of 2023 affected the results, which was expected.
Jalal added, in an interview with Al Arabiya, that the transfer of the sales season came due to the holding of the World Cup in Qatar and the Riyadh season during the fourth quarter of 2022, which would have affected the sales season.
He explained that the challenges as a result of the situation in China during the fourth quarter of 2022 led to a decrease in the flows of goods coming from it, especially Apple products, which were much lower compared to the same quarter of 2021.
The CEO of the company, Muhammad Jalal, said that what is happening in the supply chains is described as turmoil, and in the beginning of 2022, some product groups were not present, and after that the products were abundantly available in the second quarter of 2022, and continued to be available until the fourth quarter of 2022, with the exception of Apple products. ; While freight rates have fallen to pre-COVID-19.
Regarding the loan portfolio of the “Tasheel” company affiliated with “Extra”, Muhammad Jalal said that “Facilitation” has a loan portfolio that rose to 1.650 billion riyals in the fourth quarter of 2022, compared to about 1.28 billion riyals in the fourth quarter of 2021, adding that the increase in loans It leads to higher profitability even if the cost increases.
Muhammad Jalal indicated that the situation in 2023 will be affected and will differ, given that the average price of SIBOR for the 3 months of last year amounted to 3.2%, compared to 5.35% currently, and the company expects it to range between 5.45% to 6% in the period between February and March of 2023; Therefore, the cost of borrowing has increased and will affect the company’s profitability in 2023, in conjunction with the rise in inflation.
Jalal explained that the electronics market declined in 2022 by 8% compared to the previous year, and is expected to decline in 2023 as a result of high interest rates and inflation.
The CEO stated that the disposable income of the Saudis was severely affected in 2022 and will continue to be affected in 2023 as a result of inflation, high rates of spending on entertainment and the return of Saudis to travel for the first time in 3 years, in addition to the expansion of real estate financing, in light of the high interest rate.
The net profit of “Extra” during the fourth quarter of last year amounted to 121.3 million riyals, compared to 126.1 million riyals for the same quarter of 2021, a decrease of 4%.
He pointed out that the challenges as a result of the situation in China during the fourth quarter of 2022 led to a decrease in the flows of goods coming from it, especially from Apple products, which were much lower compared to the same quarter of 2021.
“Extra” said that, supported by the increase in revenues from consumer financing services and Extra services, the gross profit grew in 2022, by 6.6% over the same period in the previous year, to record a total profit of 1,261.3 million riyals, compared to 1,183.7 million riyals for the same period in the previous year. The impact on net profit growth by 10.9% compared to the same period of the previous year.
This came despite the increase in selling, operating, general and administrative expenses.
The company said that shareholders’ equity (there are no minority rights) at the end of the period amounted to 1139.31 million riyals, compared to 992.56 million riyals at the end of the same period of the previous year.