Saudi retailer's Q1 net profit rises 10pc
Jeddah, April 8, 2010
Higher sales spurred Saudi-based office supplies and electronics retailer Jarir Marketing's net profit by 10 per cent in the first-quarter, putting pressure on the firm to meet a higher growth forecast for this year.
Electronics sales have been driving growth but these products carry lower margins than the other products that Jarir sells, such as books and office supplies, two brokerage firms said commenting the results.
Jarir made SR118 million ($31.5 million) in the three months to end-March compared to SR107 million a year earlier, Jarir said.
In February, Jarir said it expects new stores to boost its net profit by at least 15 per cent this year, which is higher than profit growth last year.
'These results bode well for the company's overall ... 2010 results,' said Laurent-Patrick Gally, of Dubai-based Shuaa Capital.
Jarir said first-quarter sales rose by 20 per cent to SR795 million led mainly by higher smart phone sales and a rise in the number of its stores to 28 from 24 a year earlier.
But analysts said increasing reliance on electronics sales was pressuring margins.-TradeArabia News Service