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Saudi Automotive Services Co.’s (SASCO) gross profit was affected by higher operating expenses due to increased utility prices and labor costs, despite a rise in profit and operating revenues increase during the period, the company’s CEO said.
In a phone interview with Argaam on Sunday, Riyadh Saleh Almalik added that the firm’s operating costs reached SAR 505 million in the second quarter, compared to SAR 288 million in the year-ago period – an increase of 75 percent.
In order to mitigate the impact of higher opex, the Saudi-listed company is in talks with authorities to increase the profit margin of fuel sales in line with the rise in selling costs. It is also seeking lower rents for a number of leased locations, Almalik said.
Raising the profit margin will be positively reflected on the transport and tourism sectors and contribute to creating job opportunities, he added.
When asked about SASCO’s plan to introduce self-service fuel stations, the CEO said the company is working on it with a global firm, and the project is now in the pilot stage. It will be launched soon after ensuring there are no operating glitches.
The new system will reduce labor, which will consequently decrease a great deal of the operating costs, Almalik added.
SASCO’s sales of 91-octane fuel increasep 44 percent year-on-year (YoY) in the first six months of the year, while sales of 95-octane gasoline tumbled 59 percent.
The company opened six new locations in the central, eastern and western regions of the Kingdom during the second quarter, Almalik said.
SASCO reported a net profit of SAR 15.28 million for the first half of 2018, a 39.3 percent YoY increase on higher sales, lower zakat expense and a SAR 3 million investment income.
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