Herfy’s Q3 profit spurred by fast recovery in restaurants sales, strong solvency: COO

Herfy Food Services Co. swung to profitability in Q3 2020, thanks to a fast recovery in the company’s sales, especially from the restaurants segment, Khalid Al-Saeed, Herfy’s Chief Operating Officer, told Argaam in a telephone interview.

The company’s sales surged 83% to SAR 311 million in Q3 2020, from SAR 170 million in the second quarter of the year.

“Sales from the restaurants business soared 140% in Q3 2020, as compared to the previous quarter, when sales were impacted by the precautionary measures taken by competent authorities to curb the coronavirus outbreak,” Al-Saeed said, explaining that these measures included the closure of Herfy’s restaurants in malls and limiting services at some branches to delivery. Additionally, working hours were reduced at all branches.

Finance charges decreased by 9% to SAR 7.8 million in Q3 2020, from SAR 8.6 million in the second quarter. Moreover, long-term loans declined from SAR 67 million at the beginning of the year to SAR 26 million by the end of the third quarter, on deleveraging.

Herfy’s bakery and meat segments also demonstrated solid performance during the coronavirus outbreak, Al-Saeed pointed out, adding that all factories were operating at their maximum capacity to meet consumer and market demand. The performance of these segments was lauded by the government and regulatory authorities.

“During the coronavirus crisis, Herfy was keen to fulfil its obligations towards shareholders. The company paid SAR 71 million cash dividend in H2 2019, backed by its strong financial position and solvency,” Al-Saeed added.

The COO also expected better results in Q4 2020, adding that the restaurants segment is likely to see improved services in 2021, as Herfy will introduce a breakfast meal, which will boost the results of the segment and the company as a whole.