• Revenue: Amounted to SAR 1,459.6 million, largely unchanged when compared to SAR 1,466.4 million for Q3-FY22. This was the result of a remarkable decline in F and B revenues (-24.5%), due to carving out the full YTD impact arising from exiting some of the brands within the portfolio, including Azal restaurant chain and Shawarma Almuhalhel. This has largely outweighed the improvement in international retail (+9%). Meanwhile, domestic retail exhibited a flat performance during the period.

• Gross Loss: Came in at SAR 59.8 million for Q3-FY23, compared to a Gross Profit of SAR 244.5 million in Q3-FY22. It is worth highlighting that the Company has recorded a one-off inventory charge of SAR 290 million during Q3-FY23, adjusting for which would result in a Gross Profit of SAR 230.2 million, down 5.9% YoY, for a Gross Profit Margin of 15.8%, compared to 16.7% in Q3-FY22.

• Selling, General and Administrative Expenses (SGA): Decreased substantially by 40.9%, the equivalent of SAR 60 million to SAR 86.6 million, due to the capitalization of staff-related costs, government support and staff optimization during the period. As a result, overall SGA-to-revenue decreased to 5.9% in Q3-FY23 from 10% in Q3-FY22.

• Net Finance Cost: Increased by 74.0%, the equivalent of SAR 43 million, to SAR 99.9 million, in line with the rising trend in SAIBOR, and also because of the repayment of outstanding debt in Q3-FY22, which reduced finance costs at the time.

• Adjusting for the one-off inventory charge would result in a net profit figure of SAR 10.2 million, representing a decline of 36.3%, in comparison to Q3-FY22.

• Revenue: Increased 6.3% from SAR 1,372.9 in Q2-FY23 to SAR 1,459.6 million, driven primarily by an improvement in both the domestic and international markets, which largely offset the decline in F and B revenues, as a result of exiting some brands during the quarter. KSA retail revenues increased 8.8% sequentially, supported by a revival in consumer sentiment and demand in the Kingdom, while international retail revenues increased 14.4% QoQ, with CIS countries continuing to lead this growth.

• Gross Loss: Came in at SAR 59.8 million for Q3-FY23, compared to a Gross Profit of SAR 192.6 million for Q2-FY23, essentially due to the one-off inventory charge of SAR 290 million recorded by the Company during Q3. Adjusted Gross Margin came in at 15.8%, compared to 14% in Q2-FY23.

• Selling, General and Administrative Expenses (SGA): declined 23.9%, the equivalent of SAR 27 million, from SAR 113.8 million in Q2-FY23 to SAR 86.6 million, driven by the Company’s sustained focus on cost rationalization and operational efficiencies.

• Net Finance Cost: increased from SAR 41.2 million to SAR 99.9 million, predominantly due to the increase in prevailing interest rates in the KSA.

• Revenue: Was relatively unchanged at SAR 4,538.1 million for 9M-FY23, with the international portfolio exhibiting an improvement of 12.8%. Meanwhile, KSA retail revenues declined slightly by 2.2% during the period, while the F and B segment declined 4.5%, due to exiting some brands, in line with the focus on portfolio optimization, a key strategic pillar for the Company.

• Gross Profit: Declined 49.2% from SAR 809.5 million for 9M-FY22 to SAR 410.9 million for 9M-FY23, on the back of the one-off inventory charge, as well as the flat top-line performance. Adjusted Gross Profit amounted to SAR 700.9 million, a decrease of 13.4% YoY, whilst adjusted Gross Profit Margin came in at 15.4%, compared to 17.9% in 9M-FY22.

• Selling, General and Administrative Expenses (SGA): Decreased 18.8%, to reach SAR 329.8 million compared to SAR 406.3 million in 9M-FY22, as a result of the Company’s focus on cost optimization and improving efficiency.

• Net Finance Cost: Increased by 4.5% to SAR 209.2 million essentially due to the increase in SAIBOR.

• In line with Cenomi Retail’s continued focus on optimizing its operations and effectively managing its inventory, the Company recorded a one-off inventory charge of SAR 290 million during the period, adjusting for which would result in a net profit figure of SAR 91.2 million in 9M-FY23, thus representing an increase of 10.4% YoY. Inventory levels dropped by over 40% from SAR 1.7 billion to SAR 1 billion as of 31 December 2022.

The Company is embarking on a strategic brand rationalization program, through which 26 non-strategic brands have been identified for divestment. This is expected to have a revenue impact of circa SAR 288 million, and an uplift of circa SAR 25 million to net profit once the brand rationalization program is concluded.

The Company’s General Assembly approved a change in the fiscal year from March 31st to match the Gregorian year, ending December 31st. The change will take effect starting in the calendar year 2022, with the company reporting financial results for the Short Annual Year (nine months), which starts on 01-Apr-2022 and ends on 31-Dec-2022.