Fawaz Alhokair net profit up 0.9%

28/07/2016 05:16 AST

Saudi Arabian retailer Fawaz Abdulaziz Alhokair Co. reported a 0.9 percent rise in first-quarter net profit on Wednesday as sales increased at its outlets in the Kingdom.

The company made a net profit of SR212.6 million ($56.7 million) in the three months to June 30, up from SR210.8 million in the year-earlier period, according to a bourse filing. Alhokair's financial year starts on April 1.

EFG Hermes forecast the company would make a quarterly profit of SR170.1 million during the quarter, while NCB Capital estimated a profit of SR190.0 million.

Alhokair, which owns franchise rights for brands including Mango, Zara and Banana Republic in the Middle East, said its quarterly profit rise was due to increasing sales in Saudi Arabia due to more stores and also the boost from the holy month of Ramadan.

These factors helped offset the negative impact from an increased inventory provision, which lifted the cost of sales, as well as a SR27 million charge following the sale of Spanish brand Blanco in the quarter.

Quarterly sales rose 17.1 percent year on year to SR2.2 billion. Retail names in Saudi Arabia have struggled in the first half of 2016 as a protracted slump in oil prices put government and consumer spending under pressure, while a two-month salary bump to government employees which boosted retail sales in early 2015 wasn't repeated.

Arab News