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Jarir Chairman, Muhammad Alagil
Jarir Marketing Co. was impacted by a 15-20% increase in prices of materials and shipping costs over the last six months, Al Arabiya TV reported, citing Chairman Muhammad Alagil.
Alagil stated that the price hike crisis is ongoing, noting that it does not seem to be transitory.
Inflation rates affect the company’s products differently, as electronics were the least affected by the inflation due to their lower shipping rates. However, prices of stationery and school products change at 5-30%, depending on shipping rates and the size and price of products.
Jarir’s Q1 2022 improved profit margins were backed by seasonality factors, namely, the resumption of schools’ attendance, which boosted sales of higher-margin stationery and school products, said Alagil, while commenting on the company’s first-quarter financials. However, Q1 operating profit didn’t drop at the same levels of sales, he added.
He also underpinned the shortage in computers, smart mobiles and electronic devices due to the global shipping challenges, indicating that the products’ supply improved in Q1 compared to 2021.
Jarir now stockpiles other products that take longer shipping time for early delivery, Alagil noted, expecting more challenges to appear due to the Russian-Ukrainian conflict and the Covid-19 locakdowns in China. He also expressed Jarir’s readiness to take advance orders in case the situation becomes worse.
Jarir Marketing posted a 6% fall in Q1 2022 net profit after Zakat and tax to SAR 251.3 million, compared to SAR 267.6 million in the year-ago period, Argaam reported.
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