Al Hassan Ghazi Ibrahim Shaker Co has posted a first-quarter (Q1) net profit of SR32.25 million ($8.6 million), up 12.09% YoY, driven by strong revenue growth, enhanced operational performance, and lower finance costs.

 

Saudi Arabia’s leading manufacturer, importer and distributor of air conditioners and home appliances saw a Q1 revenue of SR413.24 million, up 19.24% year-on-year (YoY), driven by higher sales in the HVAC solutions segment and balanced growth across the company’s brand portfolio.

 

Gross profit of SR97.77 million was up 12.24% YoY in line with higher revenues and a favourable portfolio mix.

 

Operating income

Operating income of SR31.35 million rose 9.59% YoY, primarily driven by higher revenues, and gross profit, offsetting the higher SG&A expenses in line with increased strategic marketing efforts.

 

EPS of SR0.67 per share, improved by 12.09% YoY.

 

Mohammed Ibrahim Abunayyan, Chief Executive Officer at Shaker, said: "Shaker's Q1-FY24 results are a strong start to the year, building on the momentum we established throughout 2023. Our focus on core business segments, brand diversification, and operational efficiency has continued to cement our market leadership. 

 

“We are especially proud of achieving a strong balance across our brand portfolio, demonstrating our agility and commitment to catering to evolving customer preferences. This customer centricity is a cornerstone of our vision, and it's reflected in our ongoing efforts to expand our digital footprint and enhance the user experience on our e-commerce platform. These factors, combined with our commitment to innovation, as exemplified by the recent MoU with LG Electronics and MISA, position Shaker for a future of industry leadership.

 

“Looking ahead, we are excited to share our new growth strategy by mid-2024. This will guide our future direction while positioning Shaker at the forefront of innovation and sustainable growth."

 

Reduction in net debt

Demonstrating its commitment to achieving sustainable growth while strengthening its financial health, Shaker achieved a significant 24.08% reduction in net debt. 

 

This strategic deleveraging along with optimising the usage of short-term loans and Letter of Credits (LC) has resulted in a decrease in finance costs, positively impacting net profit. Additionally, further improvements in inventory management and working capital resulted in strong cash generation from operations, reaching SR30.98 million.

 

In February 2024, Shaker signed a landmark Memorandum of Understanding (MoU) with LG Electronics and the Ministry of Investment of Saudi Arabia (MISA) to explore local manufacturing of AC compressors in the kingdom. This marks a significant leap towards localising the production of the most technologically complex component of AC units. 

 

Localisation

In March 2024, Shaker also announced the localisation of manufacturing of LG Electronics Multi V5 unit featuring the Variable Refrigerant Flow (VRF) technology at its LG-Shaker factory in Riyadh. This cutting-edge technology is known for its energy-saving capabilities, space-efficiency, and reliability which will primarily target large residential projects as well as commercial and hospitality projects. 

 

These strategic developments mark a new era in the Saudi market, while aligning with Saudi Arabia's Vision 2030, and strengthening Shaker’s value chain in its HVAC segment.

 

Shaker continued to expand its digital footprint, as its e-commerce platform experienced strong growth driven by ongoing efforts to improve user experience and broaden online offerings. Additionally, the upcoming transition to SAP's S/4HANA ERP system, on track for full roll-out by Q3-FY24, will further optimise operational efficiency and e-commerce capabilities. 

 

The unveiling of a new growth strategy is expected by mid-2024, and will position Shaker for long-term growth.--TradeArabia News Service