Tuesday 23 April 2024

Mohammed Ibrahim Abunayyan

Shaker FY 2023 net profit shoots up 99.28pc to $17.45m

RIYADH, February 28, 2024

Al Hassan Ghazi Ibrahim Shaker Co, KSA’s leading importer, manufacturer, and distributor of Air Conditioners and Home Appliances, has posted an exceptional 99.28% spike in 2023 FY net profit hitting SR65.43 million ($17.45 million).  
Net profit for FY23 was the highest since FY15, driven by higher revenue and operating profit, along with a 51.86% increase in share of profit from LG-Shaker HVAC factory and lower zakat and tax. 
Revenue reached SR1.24 billion in FY23, up 19.19% YoY and highest since FY16, driven by double digit growth in the HVAC Solutions and Home Appliances segment of 18.11% and 21.19% respectively.
Gross profit of SR317.76 million in FY23, up 33.71% YoY, driven by higher sales, an optimised sales strategy combining diversified product and channel portfolio, and efficient management of cost of goods sold (COGS).
Operating profit
Operating profit of SR89.15 million in FY23, up 110.48% YoY, driven by higher revenues and improved gross margins, supported by lower impairment loss on trade and other receivables.
EPS was SR1.36 in FY23, an increase of 99.28 % YoY. Q4-FY23 revenue of SR259.56 million (Q4-FY22: SR209.49 million) and net profit of SR3.80 million (Q4-FY22: net loss of SR2.36 million)
In FY23, Shaker generated the highest revenue since FY16 and highest net profit since FY15, signifying a year of significant growth and strategic execution. The commitment to achieving growth while strengthening its financial health was demonstrated with continued deleveraging as net debt reduced by 20.95%. Further improvements in inventory management and working capital led to strong cash generation from operations of SR20.82 million.
Market leadership
Shaker reinforced its market leadership, by focusing on growth in core business segments. A landmark agreement with LG expanded Shaker’s portfolio to include the full range of LG products in its Home Appliances and Entertainment offering. This expanded Shaker’s addressable market share, fueling further expansion and momentum in the Home Appliances segment.
Additionally, Shaker’s strategic divestment of New Vision for Electronics and Electrical Appliances in Jordan streamlined operations and allocated resources more effectively by using the sales proceeds to reduce loans, thereby enhancing its market competitiveness and financial stability.
Shaker's investment in digitalisation is playing an important role in enhancing operational efficiency. The Company’s current transition to SAP’s S/4HANNA ERP system is a significant move towards integrating efficient business functions and enabling informed data-driven decision making across the organisation. Implementation began in Q3-FY23 and full roll-out is expected in FY24.
Retail expansion
During the second half of the year, Shaker delivered on its B2C retail expansion strategy, opening its 7th physical store aimed at redefining the shopping experience to be more innovative and engaging for a newer generation of customers. 
Another 2 stores are set to open in FY24, signalling continued expansion of the physical footprint and commitment to provide unparalleled service to its customers. This complements Shaker’s commitment to expand its e-commerce offerings, catering to a wider audience with accessible, convenient, and diverse shopping options.
The acquisition of a 10% stake in Cashew, a digital BNPL (buy-now, pay-later) platform will enable Shaker to tap into new growth opportunities in the Kingdom's fintech retail sector and digital lending space while diversifying its business model into complementary verticals.   
Bonus shares
Building on the successes of 2023, the issuance of bonus shares in December highlighted Shaker’s focus on creating and returning value to its shareholders. Looking ahead, Shaker remains committed to its strategic imperatives: focusing on core business for sustained growth, expanding retail presence to meet evolving consumer demands, enhancing e-commerce capabilities to harness digital growth opportunities, and championing the Saudi Made initiative as part of its contribution to domestic industrial advancement. A new strategic vision is expected to be unveiled by mid-2024, which will guide Shaker into its next phase of growth.
Mohammed Ibrahim Abunayyan, CEO at Shaker, said: “2023 was a remarkable year for us, characterised by strong financial performance and strategic advancements as we achieved our highest revenue since FY16 and net profit since FY15. It is a testament to the execution of our growth strategy, focused on building an agile, dynamic, and high-growth business environment, positioning Shaker as the number one destination for all things home in the Kingdom. Our commitment to strengthening our core business has yielded sustainable long-term gains. 
“The steady growth in our B2B portfolio has enhanced the stability of HVAC Solutions by securing larger contracts and long-term engagements. At the same time, the successful integration of LG's comprehensive product range, our well-established portfolio offering from Midea and Ariston, along with Shaker’s targeted marketing efforts led to unlocking additional growth potential within the Home Appliances segment.
“Beyond financials, we remain steadfast in our commitment to the Made in Saudi initiative, boosting local production capacities, fostering self-reliance, and aligning with the kingdom's Vision 2030 aspirations. Looking ahead, we are excited about the future, with plans to unveil a new strategic vision in 2024 that will guide us into our next phase of growth.”--TradeArabia News Service


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