Nahdi CEO: Our diversification strategy to build an integrated healthcare ecosystem is on track, despite headwinds

Yasser Joharji CEO of Nahdi Medical Services 

Nahdi Medical Co. is on track to deliver its four-pillar strategy, which focuses on strengthening the core pharma-retail offering, expanding its omni-channel retail footprint, building and developing an integrated primary healthcare gateway (omni-health), and developing strategic capabilities to support the Company’s growth, CEO Yasser Joharji said.

In an exclusive interview with Argaam, Joharji said the current global headwinds, as well as higher inflation and interest rates, directly impacted consumer purchasing power, consumption patterns, leading them to focus on essential needs. Accordingly, this has impacted the performance of various businesses in the retail sector.

Nahdi operates in an attractive and accessible sector, which has recently seen competition intensifying. The company’s presence, its over 35 years of experience, distinctive strategy and data-driven approach were critical to proactively addressing these trends. This, in turn, helped Nahdi navigate these market changes with greater confidence, Joharji added.

Commenting on H1 2023 financial results, the CEO said Nahdi successfully maintained steady performance.

The company provided its guests with high quality products and services, which helped grow its core categories, such as medicine by 5%. It also maintained its market share in vital and competitive categories such as mom & baby.

He added that Nahdi offers the best quality and prices in competitive categories such as personal care, skin care and beauty, which led to the reinforcement of its market leadership in these categories, where customers look for value, quality and the best service, all attributes he says can be found at Nahdi.

Joharji continued that Nahdi’s ongoing commitment to its strategy and capabilities allowed the company to maintain a steady performance despite the current market conditions. The company generated gross revenues of SAR 4,336 million compared to SAR 4,319 million in the corresponding period last year. Its diversified business model helped offset the slight decline in its Kingdom's retail sector, partly through the combined growth of Nahdi’s primary healthcare services platform (omni-health) and its retail pharmacy business in the UAE.

In addition, the company's gross profit in the first half of 2023 steadied at SAR 1,783 million compared to SAR 1,778 million in the first half of 2022. This reflects the company’s commitment to being agile and competitive. The gross profit margin was also unchanged at 41.1 % for the first half of 2023. Net profit also came in flat at SAR 509.3 million compared to the first half of 2022. This stability was partially attributed to offsetting the lower operating profit through the income generated from Murabaha time deposits.

He pointed out that Nahdi’s own private label brands and direct import products grew by 12% as a percentage of revenues last year to reach 14% of the company's total revenues this year, an increase of 8%. He believes the continued investment in these brands will enable the company to provide its guests with high quality, attractively priced products, whilst positioning it more competitively in the market.

The company's digital transformation project also played a role in delivering its robust results, as the online sales contribution to revenue climbed by 22% from 13% in 2022 to 16٪؜ this year, exceeding Nahdi’s strategic targets. This online sales growth was further backed by the launch of the Nahdi Global service, which provides the company's guests with access to a wide range of international products at competitive prices.

The UAE’s retail business also contributed to the topline, with its revenues amounting to SAR 27 million in the first half of this year, said the CEO, adding that the UAE is a promising growth market for Nahdi.

Nahdi's integrated omni-health ecosystem witnessed accelerated financial and operational growth. Its revenues jumped 81% to SAR 42 million during the first half of 2023 from SAR 23 million in H1 2022, as the number of visits to Nahdi Care clinics topped 485 thousand, versus 178 thousand for H1 2022.

In H1 2023, virtual medical consultations reached 284 thousand, compared to 276 thousand to the entire year in 2022, reflecting outstanding progress. The company intends to accelerate its efforts to expand its omni-health ecosystem by doubling the number of clinics under its umbrella over the next 12 months.

Looking ahead, Joharji expects the challenging macroeconomic climate and its impact on the retail sector to continue for the next twelve months.

"We make it a point to always stay close to the market driven by our continuous interest to serve our guests as the fundamental driver for our business growth,” the CEO said.

“Nahdi’s partnership with its guests has gone above and beyond simply providing them with access to products and services, but also by giving them access to a unique healthcare experience which led to our company scoring the highest net promoter score (NPS) among our peers in the retail sector. We are always looking to create more value for our guests, through various initiatives and partnerships with international healthcare retailers”, he concluded.