POWERING THROUGH

The operating profit declined from SAR 74.3 Mn in 2018 to SAR 42.1 Mn in 2019, a decline of 43.3%. This was the combined impact of the gross profit declining by 6.7% from SAR 284.8 Mn in 2018 to SAR 265.6 Mn in 2019, and the general and administration expenses increasing by 6.1% from SAR 210.6 Mn to SAR 223.5 Mn during the year. The decrease in gross profit was mainly due to decreases in trading commission and income from securities depository services. Over the same periods, non-operating profit increased by 50.5% from SAR 73.9 Mn to SAR 111.2 Mn as a result of a growth in investment and other incomes. Consequently, the net profit for the year rose by 3.4% from SAR 148.2 Mn in 2018 to SAR 153.3 Mn in 2019.

 

 

 

 

Operating costs have shown a marginal increase of 0.2% from SAR 298.5 Mn in 2018 to SAR 299.2 Mn in 2019. Although there has been a marked reduction in CMA annual fees from SAR 130 Mn to SAR 79 Mn, this has been offset by substantial increases in salaries and related benefits, maintenance, cost of data network lines, and marketing and sponsorship. Salaries and related benefits have increased by 16.6%; the expenditure being SAR 92.8 Mn and SAR 108.2 Mn in 2018 and 2019 respectively. Total staff numbers have increased from 354 to 395, an increase of 11.6%. The other increases in expenses have to be viewed in the context of the expansion of the market and increased demands for technology services.

General and administrative expenses have increased by 6.2% from SAR 210.5 Mn to SAR 223.5 Mn. This increase is commensurate with the increased administrative needs resulting from the development of the exchange.

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 13.7% from SAR 179.9 Mn in 2018 to SAR 204.6 Mn in 2019. The increase is due to slight increases in net profit and depreciation and amortisation. Correspondingly, EBITDA margin (EBITDA/operating revenue) too improved from 30.8% in 2018 to 36.2% in 2019.

Total assets marginally increased from SAR 3,531.9 Mn in 2018 to SAR 3,546.8 Mn in 2019, an increase of 0.4%. Non-current assets have shown a decrease by 1.4% to SAR 474.0 Mn in 2019, from SAR 481.9 Mn a year before. The composition of non-current assets too, recorded substantial changes. Intangible assets have increased from SAR 114.6 Mn to SAR 176.6 Mn. Due to some of the Sukuk investments becoming current assets, non-current investments declined from SAR 306 Mn to SAR 232 Mn.

Current assets have increased by 0.4% from SAR 3,531.9 Mn in 2018 to SAR 3,546.8 Mn in 2019. While cash and cash equivalents declined from SAR 363.1 Mn to SAR 268.5 Mn this was offset by an increase in prepaid expenses and other current assets from SAR 32.0 Mn to SAR 102.9 Mn.

Growth in profit after tax by 3.4% and the relatively lower growth (1.9%) in average assets and average equity (0.9%) caused the Return on Assets and the Return on Equity too to marginally improve from 4.27% and 4.61% in 2018 to 4.33% and 4.72% in 2019 respectively. Earnings per share too increased from SAR 1.23 to SAR 1.28 from 2018 to 2019.