RIYADH, Saudi Arabia, 7 March 2023: Saudi Arabia-based Al Hassan Ghazi Ibrahim Shaker Company (Shaker), which imports, manufactures and distributes air conditioners and home appliances, said it achieved a 19.72% increase in net profits for FY22.

Making the announcement through a Press release, Shaker said it achieved a revenue of SAR 1.04 billion, up 3.44% on FY21, driven by strong growth in the HVAC solutions segment. The company said it achieved a gross profit of SAR 237.64 million, up 10.24% on FY21, driven by higher sales and portfolio-mix optimisation. It said it achieved an operating income of SAR 42.36, up 15.62% on FY21, driven by lower impairment loss on trade and other receivables, offset by higher fixed costs. The company reported a net profit of SAR 32.83 million, up 19.72% on FY21, driven by higher income from operations and lower zakat and tax. It also reported an EPS* of SAR 0.68, up 56.38% on FY21.

*Post-capital reduction in Q2-FY22.

*Discontinued operations are excluded from the year-over-year analysis.

Speaking on the performance during the Q4 of 2022, Shaker said it achieved a revenue of SAR 210 million, down 7.43% on Q4-FY21, driven by softer home appliance performance, partially offset by double-digit growth in the HVAC solutions segment. The company said gross profit margin improved by 120 basis points year-on-year (YoY) to 25.4% in Q4-FY21, though, driven by portfolio-mix optimisation and improvement in management of cost of goods sold. The company said weaker performance, YoY, is due to higher finance costs from higher SIBOR rates, increased selling and distribution expenses and seasonality trends impacting demand. This was partially offset by lower impairment loss on trade and other receivables, higher net profit from investment in an associate, and lower zakat and income tax expense, the company added.

Shaker declared that it delivered yet another year of growth and profitability in 2022, building on the continued execution of the strategy set out in 2020. Both operationally and financially, the company reported having made significant progress in key areas to position for future growth.

The company said it has successfully cleared its accumulated losses through a capital decrease in the first half of the year, providing a stronger financial foundation for future growth and development. In addition, the company said, it has successfully repaid its long-term debt and maintained profitability and growth, which enabled it to cancel the proposed offering of rights issue shares in Q4 2022.

The company said that during the second half of the year, it successfully divested its holding in “Energy Management Services Emirates LLC (EMS)”, which operates in the UAE, and listed its shares in “New Vision for Electronics and Electrical Appliances (NV)”, as held for sale, which operates in Jordan, as part of Shaker’s continued focus on portfolio optimisation of its core business in Saudi Arabia.

The company said it has also strengthened its long-standing strategic partnership with LG through an expanded supply agreement that includes LG’s complete range of home appliance and home entertainment products.

The company said its commitment to manufacturing energy-efficient products in the Kingdom has propelled it to comply and surpass the industry’s new SEER standards and emerge as a leader in energy-efficient home appliances and HVAC solutions.

The company said that as a proud supporter of the ‘Saudi Made’ initiative and a leading exporter to more than 20 countries, including the GCC region and Africa, it remains committed to promoting local manufacturing and to driving economic growth in Saudi Arabia through increased utilisation of local content in its supply chain.

In addition, the company said, it has embarked on enhancing its systems and business operations by upgrading its enterprise resource planning (ERP) to S/4 Hana, the latest technology that SAP offers.

Speaking on the occasion of declaring the financial results, Mohammed Ibrahim Abunayyan, CEO, Shaker, said: “Shaker delivered yet another year of growth and profitability. Despite the challenging market conditions in the second half of the year, we have continued to execute our strategy, optimizing our portfolio, enhancing our operations and strengthening our partnerships. We are proud to be leading the way in energy-efficient home appliances and HVAC solutions, and remain committed to promoting local manufacturing and driving economic growth in Saudi Arabia. With the successful clearance of our accumulated losses, repayment of long-term debt, and maintenance of profitability and growth, we are well-positioned to continue our journey towards becoming the region’s leading provider of high-quality, energy-efficient home appliances and HVAC solutions.

“As we move forward into 2023, we remain focused on delivering long-term sustainable growth and value creation for our stakeholders. We are confident that our strategic investments and initiatives in diversification, the expansion of our product portfolio, the optimisation of our operations and the enhancement of our digital capabilities will continue to drive innovation and differentiation in the market. We will also continue to prioritize our commitment to the Saudi Made initiative and local content and seek to further strengthen our partnerships with key suppliers and customers. As part of this commitment, we are exploring plans to manufacture all air conditioners sold in the Saudi market locally at the state-of-the-art LG Shaker factory in Riyadh. With a solid financial foundation, a strong balance sheet, a dedicated and talented team, we are well-positioned to capture opportunities and navigate challenges that may arise in the future.”