ELEMENT LIST

CURRENT QUARTER

SIMILAR QUARTER FOR PREVIOUS YEAR

% CHANGE

PREVIOUS QUARTER

% CHANGE

Sales/Revenue

2,373.9

1,892.6

25.43

2,340.2

1.44

Gross Profit (Loss)

303.7

233.9

29.841

327.5

-7.267

Operational Profit (Loss)

227

190.6

19.097

272.3

-16.636

Net Profit (Loss) after Zakat and Tax

208.4

169.1

23.24

251.7

-17.203

Total Comprehensive Income

206

173.2

18.937

252.9

-18.544

All figures are in (Millions) Saudi Arabia, Riyals

ELEMENT LIST

CURRENT PERIOD

SIMILAR PERIOD FOR PREVIOUS YEAR

% CHANGE

Sales/Revenue

4,714.1

3,779.2

24.738

Gross Profit (Loss)

631.2

536

17.761

Operational Profit (Loss)

499.3

444.5

12.328

Net Profit (Loss) after Zakat and Tax

460.1

402.8

14.225

Total Comprehensive Income

459

406.9

12.804

Total Share Holders Equity (after Deducting Minority Equity)

1,636.1

1,529.9

6.941

Profit (Loss) per Share

3.83

3.36

-

All figures are in (Millions) Saudi Arabia, Riyals

ELEMENT LIST

EXPLAINATION

Increase (Decrease) in Net Profit for Current Quarter Compared to the Same Quarter of the Previous Year is Attributed to

Reasons for increase:
- Increase in sales of some retail sections particularly computers section and computer supplies section, as well as most of wholesale sections. Online sales significantly contributed to the rise in retail sales. At a time when the performance of the showrooms was significantly affected by the preventive measures to control the spread of the Covid 19 pandemic, online sales achieved a big leap as it was the main shopping channel available to consumers during the closures and lockdown.
- Improved profit margin of certain sections, especially computer supplies and video games, due to the change in intra-section sales mix in favor of the relatively high profitability items.
- Decline in certain operational costs as a result of Government initiatives to mitigate the effects of the Covid 19 pandemic, such as SAMA initiative to support payment fees of points of sales and e-commerce platforms.
- Decreased finance cost due to the settlement of bank borrowing balances.

Increase (Decrease) in Net Profit for Current Quarter Compared to the Previous Quarter is Attributed to

Reasons for decrease:
- Although there was a slight increase in sales in the current quarter compared to the previous quarter, the decrease in net profit is due to:
- the relative decline of profit margins due to the change in the sales mix in favor of sections with relatively low profitability as compared to the previous quarter which included the second semester back to schools sales.
- Increase in general and administrative expenses which included in the current quarter the company’s contribution to the Ministry of Health’s Health Endowment Fund for an amount of 20 million Riyals.
- Increase of selling and marketing expenses.

Increase (Decrease) in Net Profit for Current Period Compared to the Similar Period of the Previous Year is Attributed to

:Reason for increase to
- Increase of several retail sections particularly sections of smart phones, computers, computer supplies and school supplies as well as the increase in wholesales. The online sales significantly contributed to the rise in retail sales being the main shopping channel available to the consumer during the closures and lockdown.
- Decreased finance cost due to the settlement of bank borrowing balances.
- This increase in net profit was achieved despite the increase in selling and marketing expenses and the increase in general and administrative expenses which comprised the company’s contribution to the Ministry of Health’s Health Endowment Fund for an amount of 20 million Riyals and the company's contribution to support Atta Digital campaign sponsored by the Ministry of Communications and Information Technology for around 5 million Riyals.

Basis of the External Auditor's Opinion

Unmodified opinion

Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor Opinion

These estimated financial results for the period ended June 30, 2020 are prepared by the management of the Company and have not yet been reviewed by the external auditors.

Reclassification of Comparison Items

None

Additional Information

The performance of the retail showrooms was affected by the Coronavirus pandemic. During the current period, showrooms in the Kingdom and GCC were subject to full or partial closure for periods of time in implementation of orders of the competent authorities. This was the most significant direct impact of the pandemic on the Company's operations and which prompted many consumers to buy online. This prompted the company to work as soon as possible to enhance the efficiency and capacity of its e-commerce arm of operations which largely contributed, thanks to God, to the sales growth in the current quarter and current period.
The showrooms also performed well during the partial lockdown periods despite the limited working hours.
It is also worth noting that the performance of retail and wholesale sales has witnessed a significant increase in the last few days of the current quarter as a result of increased consumers demand just before applying the increase in the value-added tax rate from 5% to 15%.
Difference between comprehensive income and net income for both current quarter and current period is attributed to foreign exchange loss resulting from the subsidiary in Egypt due to unfavorable changes in exchange rate of EGP against SAR.
A new showroom was opened during the period on 10/1/2020.