SGS earnings gradually impacted by COVID-19 measures, domestic flights resumption to revive market: CEO

Saudi Ground Services Co.’s (SGS) earnings for the first quarter 2020 started to be impacted in February following the government’s decision to gradually suspend domestic and international flights, CEO Fahad Al-Sanady told Alarabiya TV.

He added that the COVID-19 measures weighed on the company’s profits, nevertheless, SGS reported a net profit of SAR 37 million in Q1 2020 despite lower operations and minor change to the investment strategy.

Al-Sanady also noted that less than 9% of returns were generated from stock market investments, including investments in Saudi Aramco’s initial public offering.

On the resumption of domestic flights, he highlighted that the decision will boost the aviation sector, stressing that the company is all set to resume flights to 28 airports, which will be reflected on Q2 2020 financials.

Elsewhere, he added that international flights, which include Hajj and Umrah, account for 35% of SGS’ business

On the company’s strategy, Al-Sanady said that SGS worked during the past months on rationalizing operating expenses and capital expenditure, while maintaining its expansionary plan in other sectors such as cleaning and sterilizing aircrafts and airports amid the travel ban.

He further noted that the company benefited from the government’s support package (SANAD) to support Saudization and maintain operations for the total amount of SAR 105 million.

According to data compiled by Argaam, SGS reported a net loss after Zakat of SAR 51.1 million in Q1 2020, from a net profit of SAR 104.1 million in Q1 2019.