eXtra’s market share rises to 18%, e-commerce accounts for 22.5% of total sales: CEO

Mohamed Galal, CEO of United Electronics Co. (eXtra)

United Electronics Co. (eXtra) increased its market share by 12.5% to reach 18%, compared to 16% in January 2020, which significantly contributed to Q1 2021 sales growth, the company’s CEO Mohamed Galal told Argaam in an exclusive.

This came though preliminary indicators showed modest growth in the electronics and home appliances market in January 2021, compared to the year-earlier period.

In the first quarter of 2021, eXtra recorded the biggest quarterly profit growth of 133.7% year-on-year since inception.

The solid growth was driven by the company’s continuous efforts to boost store and e-commerce sales, which still reflect higher-than-expected growth. This proves a change in consumption patterns - compared to the pre-pandemic situation – as consumers shifted increasingly to e-commerce. Accordingly, the e-commerce segment contributed 22.5% to total sales.

In addition, eXtra witnessed higher sales revenues from the services and consumer finance services segments, through its arm, United Company for Financial Services (Tas’heel). The steep decline in the selling, general and administrative expenses (SG&A) remarkably contributed to eXtra’s net profit growth, reflecting the development of the company’s operating efficiency, in line with its efforts to improve customer shopping experience, Galal noted.

Moreover, Tas’heel is proceeding with its plans to become one of the largest non-banking financial companies, Galal affirmed, adding that the company was among the region’s first players that succeeded to deploy fintech to provide Sharia-compliant consumer finance services for micro and medium-sized enterprises.

Tas’heel’s lending portfolio reached SAR 863 million by mid-2019, in less than two years from the commencement of operations. It also maintained low ratios of non-performing and outstanding loans. The company also turned profitable only 12 months after launching operations.

eXtra will move ahead to be a leading retailer in the Kingdom, in line with its plans to offer real value to its shareholders and to double the 2018 earnings by 2021, Galal concluded.

The home appliance retailer reported a net profit after Zakat and tax of SAR 81 million for the first quarter of 2021, an over two-fold increase from SAR 34.7 million in the prior-year period, Argaam reported.