Top-line rises 9% YoY aided by Ramadan season, in line with our estimate
BinDawood Holding’s revenue amounted to SAR 1,220.9mn in 2Q22 (+9% YoY), in line with our estimate. Ramadan season primarily aided the company’s revenue growth, also supported by the return of Umrah pilgrims as the government eased COVID restrictions on foreign travelers.
Inorganic transactions related expenses affect operating profit, resulting in a miss
BinDawood’s SG&A climbed 10.9% YoY primarily due to costs arising from new stores opening, and transaction expenses related to the acquisition of IATC and Ykone. Given a relatively lesser increase in revenue, this dragged-down operating profit by 45% YoY to SAR 64.8mn in 2Q22, nearly 50% below our estimate of SAR 125.1mn.
Weakness at the operating level cascades to the bottom-line
Pressure on the operating profit weighed heavily on the bottom line, as it decreased 55% YoY to SAR 42.3mn (our estimate: SAR 118.7mn).