eXtra posts lifetime high earnings in 2022 on retail, finance segments: CEO

Logo United Electronics Co. (eXtra)

United Electronics Co. (eXtra) reported lifetime high earnings in 2022, backed by the strong performance of retail and consumer finance segments, despite  unfavorable conditions, including rising inflation levels and unprecedented borrowing rates, Mohamed Galal, CEO and Managing Director, told Argaam.

eXtra sales exceeded the SAR 6 billion mark for the first time in the company’s history, while its results included SAR 10 million in primary operating expenses pertaining to eXtra Egypt, which will launch operations in 2023.

These results mark a breakthrough considering the shrinking spending on the Kingdom's electronics sector in 2022, which dropped 8% year-on-year (YoY), underscoring eXtra’s market share gains.

Despite a slump YoY in Q4 2022 sales, eXtra reported higher gross sales for 2022, primarily on changing the date of its annual mega sale from Q4 to Q2.

The decision was taken due to several factors, including a state of instability at the beginning of the year due to geopolitical turmoil, higher oil prices and talks about global interest rate hikes to temper soaring inflation.

Additionally, the fourth quarter witnessed several events that may have weighed electronics and household appliances spending, including Qatar World Cup 2022, as well as growing household spending on entertainment, hotels, food and beverages.

Accordingly, such a decision underpinned the company’s ability to correctly and resiliently address changes while achieving the best results.

eXtra plans to boost its gross profit, which accounted for 20.9% of the company's sales in 2022, compared with 20.3% in 2021, backed by maintenance and consumer finance services.

The growth in eXtra’s consumer finance portfolio in 2022 echoed its success in building an efficient financial services unit in addition to its ability to enrich it, in line with its aspirations and the requirements of non-banking finance and financial technology in the Kingdom.

Tas’heel reported a compound annual growth rate (CAGR) of 205.8% in two years.

As for future plans, the current global geopolitical and economic challenges will likely impact the Kingdom’s economy in the short term, economic activities in general and retailers in particular. The current year will expectedly witness several headwinds in the light of higher borrowing rates and soaring inflation, which will place further pressure on household spending and the market in 2023.

As these short-lived factors fade, eXtra will explore more growth potential in the medium and long term. The home appliance retailer operates in a promising market with a young population and a well-established economy, which will help it achieve its future objectives and strategies.

eXtra reported a net profit of SAR 440.2 million in 2022, up 11% YoY, while Q4 2022 earnings stood at SAR 121.3 million, Argaam reported.