Alhokair Group says revenue falls by SAR 225 mln in 4 months due to COVID-19

Abdulmohsen Alhokair Group for Tourism and Development (Alhokair Group) announced in a bourse statement today that its business was impacted by COVID-19 pandemic and precautionary measures, leading to revenues declining by SAR 224.5 million year-on-year (YoY) in the four months starting March until June 2020.

The company said it cannot determine when the COVID-19 pandemic effect will end, indicating the reasons that led the company being affected by the pandemic are as follows:

- All the entertainment sites were closed from March 15, 2020 to June 20, 2020, due to the precautionary and preventive measures taken by the government to control the COVID-19 outbreak, therefore no revenues recognized from the entertainment sites during this period.

- The occupancy rates of the hotel sector were reduced due to the precautionary measures, as well as the meetings and wedding were stopped during the suspension period of the commercial activities, in line with the decision of the Ministry of Municipality and Rural Affairs about not allowing the gathering to prevent the spread of coronavirus and to protect the health of citizens and residents.

- The suspension of all domestic and international flights, affected the business of all company’s sectors.

Meanwhile, the management has taken a series of actions to mitigate the effects of the pandemic on its operations, as follows:

- The gradual reopening of the entertainment sites on June 21, 2020, with all the preventive measures issued by the Ministry of Health in all the company's commercial activities. This includes imposing temperature checks, distribution of protective masks and sanitizers, in addition to adhering to social distancing.

- Reducing operating expenses by cutting salaries and related benefits expenses in proportion to the actual number of working hours, in addition to reducing rent expenses by getting discounts from the lessors and reducing other operating expenses.

- Maintaining strong cash position and great banking relationships.

- The company contracted with the Ministry of Health to use some of its hotels as quarantine.

On other hand, the company has benefited from some government initiatives to support the private sector firms that have been impacted from the current consequences of COVID-19, as follows:

- Saned system initiative, where the General Organization for Social Insurance (GOSI) burden 60% of the Saudi employees’ salaries, not exceeding 70% of the total number of Saudi employees.

- Hadaf program, which provide 30% from the salary or SAR 3,000 whichever is less, to support Saudi employees who were employed in the private sector from July 1, 2019.

- Postponement of loan payments for all bank facilities and value-added tax (VAT).

- Other government initiatives such as reduction of the electricity bills, extending the iqama validity of the employees and other initiatives.