Shaker Group (“Al Hassan Ghazi Ibrahim Shaker Co.”, the “Company” or the “Group”), Saudi Arabia’s leading importer, manufacturer and distributor of Air Conditioners and Home Appliances, has announced its financial results for the third quarter and the nine-month period ended 30 September 2018.
Losses for the third quarter, at both net and operating level, decreased compared to Q3 2017, as a result of improvements to the Group’s gross margin and the delivery of reduced operating costs, showing that initiatives for reducing expenses in line with management’s optimisation program are already effective. General and administrative expenses were reduced by SAR 1.6 million, resulting from lower employee costs. Costs were further reduced by an SAR 0.7 million decrease in financing expenses as compared with 2017.
On a year-on-year basis, the Company was successful in reducing general and administrative expenses by 11.4% for the nine months ended 30 September 2018, while selling and distribution expenses decreased by 12.8% and other expenses decreased by SAR 14.2 million. The Company’s management considers these reduced expenses to be essential for putting the Group on a more efficient footing to deliver improved performance.
Eng. Azzam Saud Almudaiheem, Chief Executive Officer at Shaker Group, commented:
“While we continue to face pressure on sales revenues as a result of market challenges including increased competition, a lackluster construction sector and unfavorable seasonality in the third quarter, we are pleased that our efforts to reduce operating expenses and improve efficiencies are delivering results. We are bullish on the positive effect we expect to see from our cost optimisation measures, and while we have experienced difficult years in a challenging market, we are addressing these issues head-on to achieve improved performance. We remain confident that the market for AC and home appliances shows long-term promise, which we will actively exploit.”
Net losses for the nine-month period increased compared to the same period in 2017, mainly due to a decrease in sales of 27.2%, resulting from sustained market headwinds that include increased competition, muted customer demand, and reduced spending on real estate and construction projects in Saudi Arabia. The Group is actively pursuing new and strategic opportunities that it believes will stimulate sales.
The Group, which is listed on Tadawul (symbol: SHAKER), is a leader in the Saudi market as both a distributor for international electrical brands and a local manufacturer of LG Air Conditioners. The Group’s portfolio brands include LG, as well as Indesit, Ariston, Maytag, Midea and Bissell in the home appliances segment. In 2015, the Group increased its stake in the UAE’s Emirates Energy Management Services (EMS) from 20% to 74%, and in establishing ESCO, a branch of Shaker Group, took an important strategic step towards diversifying operations and revenue streams.