Americana reports weaker 1Q earnings amid “geopolitical tensions” + Ramadan slowdown: Tadawul and ADX-listed MENA restaurants operator Americana Restaurants International reported USD 28 mn in net income in 1Q 2024, falling 51.8% y-o-y, according to its earnings statement (pdf). The company’s revenues also dropped 16.3% y-o-y to USD 493.5 mn during the quarter.

The culprits: The F&B giant attributed the lower earnings to “lower sales as a result of the geopolitical situation and onset of Ramadan, as well as higher depreciation charges and rent expenses on account of new store openings during the period.”

What we don’t know: It’s difficult to establish a comparison of how much of the hit is attributed to customer boycotts as opposed to the seasonality effect of Ramadan, because most of the holy month fell within 1Q 2024, while last year it was mostly in 2Q 2023.

Expansion plans: The company plans to open 37 more stores, with these locations currently under construction. Americana had opened 37 new stores in 1Q, bringing the total number of its stores at 2.5k as of the end of March 2024. The restaurant operator is set to open 200-225 new stores this year “in markets which are less impacted by the current regional macro-environment.”

The way forward: Americana will continue to deploy “revenue recovery initiatives such as smart pricing, targeting, promotion and marketing, with sharp focus on driving transactions through value, crave and familiarity.”

SAVOLA-

Savola Group’s net income was down 11.2% y-o-y to SAR 348.7 mn in 1Q 2024 on the back of lower income from its food processing segment due to Egypt’s currency devaluation, the leading food group said in a disclosure to Tadawul yesterday. The drop in net income was also attributed to higher operating expenses and a higher net finance cost due to the EGP devaluation and rising interest rates, among other factors. Meanwhile, Savola’s revenues were essentially flat during the quarter at SAR 7.8 bn.

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