Cenomi Retail, Al Othaim Markets, Saudi German Health, and Senaat post mixed 2Q earnings

Zara strength narrows Cenomi Retail’s loss

Cenomi Retail (AFG International Co.) narrowed its 2Q net loss to SAR 80.9 mn, from SAR 103.7 mn a year earlier, according to a Tadawul filing. Group revenue rose 11.5% y-o-y to SAR 1.26 bn, with like-for-like growth of 12.9% across the portfolio.

What drove the quarter: Zara delivered 9.9% group-level like-for-like growth, and the wider Inditex portfolio grew 10.5% like-for-like, with Saudi revenue up 11.6% y-o-y on Eid Al-Adha trading and summer collections. Operating expenses fell 92.9% on the absence of last year’s FX losses.

The half didn’t follow the quarter. 1H net loss widened to SAR 133.9 mn, weighed down by a 38.5% rise in net finance costs to SAR 206.5 mn. Still, revenue grew 6.5% y-o-y to SAR 2.6 bn.

ERP troubles tip Al Othaim into the red

Abdullah Al Othaim Markets Co. swung to a 2Q net loss of SAR 107.13 mn, from net income of SAR 41.14 mn a year earlier, according to a Tadawul filing. Revenue slipped 1% y-o-y to SAR 2.5 bn as a 3.8% decline in Kingdom retail sales, tied to a rocky Enterprise Resource Planning (ERP) rollout, outweighed continued online growth.

What tipped the quarter into the red? The company said ongoing ERP-related disruption to its supply chain and an automated replenishment process forced a sharp rise in commercial inventory provisions to SAR 107 mn in 2Q alone, from SAR 22 mn a year earlier.

The half swung too. 1H revenue fell 3.65% y-o-y to SAR 5.5 bn on a 6.1% decline in Kingdom retail sales, and the company posted a net loss of SAR 53.47 mn against net income of SAR 117.5 mn a year earlier. The company opened four stores and closed one in 1H, against six openings in the same period last year.

A weak base flatters Saudi German Health’s 2Q

Middle East Healthcare Company (Saudi German Health) posted a 73.3% y-o-y jump in 2Q net income to SAR 34.35 mn, from SAR 19.82 mn a year earlier, according to a Tadawul filing. Revenue rose 6.9% y-o-y to SAR 845.52 mn on the back of an expansion of specialized medical care and surgical services and higher inpatient and outpatient volumes.

The drivers: Part of the jump is due to a base effect. The year-ago comparative was restated to include a SAR 50 mn allowance for expected credit losses, flattering the y-o-y comparison. Beyond that, the company pointed to lower G&A expenses, lower finance costs, and a smaller ECL provision.

In 1H, net income fell 63.6% y-o-y to SAR 67.8 mn even as revenue grew 5.7% to SAR 1.6 bn, because the year-ago period included a one-off SAR 114 mn capital gain on the sale of land in Riyadh.

Steel and insulation power Senaat’s bottomline surge

Advanced Building Industries (Senaat) posted a 463% y-o-y jump in 2Q net income to SAR 44.4 mn, from SAR 7.9 mn a year earlier, according to a Tadawul filing. Revenue slipped 2.7% y-o-y to SAR 1.4 bn.

Behind the numbers: The company pointed to higher gross and operating income in its steel and insulation segments, a bigger contribution from associates and joint ventures, and higher other income. An uptick in AC-sector sales and a lower Zakat and tax charge also helped.

The half held up too: Net income rose 45.7% y-o-y to SAR 54.2 mn, even as revenue fell 7.1% y-o-y to SAR 2.8 bn on weaker construction segment sales.