eXtra’s retail portfolio records outstanding performance in Q3 2019, says CEO

United Electronics Co. (eXtra) has recorded an outstanding performance as regards its retail operations in Q3 2019, Chief Executive Officer, Mohamed Galal told Argaam.

“Despite the fact that electronics and home appliances market in Saudi Arabia was nearly muted over the first seven months of this year, eXtra boosted its market share by 20 percent to 16.9 percent during this period, compared to 14.1 percent in year-earlier period,” Galal added.

The company’s sales revenue growth was driven by improved performance of its operating segments. The new e-platform accounted for more than 10 percent of the company’s sales.

eXtra also opened four new showrooms in 2019, and boosted sales of the existing stores. It also revamped eXtra services in line with market as well as customer needs in addition to the growth in installment sales, Galal explained.

Securitization of receivables from instalment sales impacted Q3 2019 gross profit, due to the accelerated recognition of installment sales revenue in Q2 2019 following eXtra’s deal with Al Rajhi Bank.

Adjusting for this impact, eXtra’s gross profit would have jumped 13.3 percent instead of 7.3 percent in the third quarter.

“On bottom line level, eXtra’s net profit from retail operations only hit SAR 41.7 million in Q3 2019, compared to SAR 31 million a year earlier – very outstanding results. This came after excluding the SAR 10.1 million impact from Al Rajhi deal and the SAR 9 million losses from United Financial Services during the third quarter,” Galal added.

Additionally, the company set aside SAR 4 million in non-recurring profit from differences in insurance claims from the fire that broke out in Jeddah store. This implied growth of 35 percent YoY.

Adjusting for the previously mentioned variables, Q3 net profit would have reached SAR 27 million.

Galal expected the company to access new business industries upon launching the wholly-owned consumer finance unit via partnerships with giant retailers in the Kingdom, adding that the company has already started implementing this strategy.

eXtra reported a profit increase of 36 percent year-on-year (YoY) to SAR 133.5 million in the nine months of 2019, Argaam previously reported.