Fitaihi reduces investments in retail sector in favour of other industries: CEO

Fitaihi Holding Group has recently relied on reducing its investments in the retail sector, in favor of other industries such as healthcare, agriculture and home products, CEO Yasser Abdelhamid told Argaam in an exclusive on Sunday.

Fitaihi’s diversified investments helped reduce risks, Abdelhamid said, noting that the group owns a stake in International Medical Center and upped its holding in Egypt-based Oriental Weavers Co. It also has a stake in Al-Jouf Agricultural Development Co.

Lower spending on discretionary goods, such as jewelry, amid the current global economic conditions along with weak demand in the Kingdom pushed Fitaihi’s sales lower.

Therefore, the group has recently worked on mitigating that impact by spending rationalization, especially the selling, general and administrative expenses. It also aimed to diversify its investments to achieve better returns for its shareholders.

“Market conditions are changing, but Fitaihi is backed by its diversified investments, income sources and risks. From time to time, we revisit our strategies, rearrange priorities and objectives in line with the conditions of each investment. We are looking for better performance and profitability in the upcoming periods,” he added.

“Now, we will focus on recording growth by providing the infrastructure required for each investment and studying its strategic objectives in light of potential challenges,” Abdelhamid noted.

Speaking of the coronavirus impact on the group’s operations, Abdelhamid said, “Our diversified investments support the group in case of emergency, such as the coronavirus pandemic outbreak”.

Fitaihi shut down all its retail stores as part of the Kingdom’s precautionary measures to contain the coronavirus. However, the group’s medical and agricultural operations are well positioned to achieve profit and revenue.

For the board’s recommendation on withholding H2 2019 dividend, the top official said that Fitaihi has been always keen to distribute dividends.

However, the losses reported in Q4 2019, in addition to the fair value losses incurred from Al-Jouf weighed negatively on the group’s results and retained earnings, which have been insufficient to finance dividends.  

Dividend withholding was not related to the lack of liquidity, he added.

“Fitaihi has a solid financial position with no bank liabilities and a very low leverage ratio. Moreover, short-term liabilities to suppliers are very marginal, and cash flow risks are very low,” Abdelhamid concluded.

Fitaihi posted a net loss after Zakat and tax of SAR 9.5 million for fiscal year 2019, compared to a net profit of SAR 7.8 million a year earlier.