Abdel Mohsen Al Hokair Tourism and Development Group losses increased by 88% to reach 143 million riyals in 2019, compared to 76 million riyals in 2018.


According to Arabia Net, the value of Al-Hokair group’s losses in the fourth quarter was 96 million riyals.


The company achieved operating profits in 2019, amounting to 8.4 million riyals, compared to operating losses in 2018, amounting to 49.8 million riyals.

Al-Hokair group said that the increase in losses is due to the following:

1- Reducing revenue by 40.9 million riyals, mainly from:


Increased market competitiveness, which led to a decrease in the average daily room sale price for existing hotels, despite an increase in occupancy rates.


The closure of a number of poorly-performing sites that included entertainment sites and restaurants during the past year that were achieving operational losses, which led to a decrease in revenue of 8.8 million riyals.

2- The company applied the International Standard for Financial Report No. (16) on the first of January 2019, and accordingly, the rental expense has been replaced by the item of depreciation of the assets of the right to use and the item of financing costs. This has led to an increase in depreciation expenses for the right to use assets of 200.2 million riyals and financing costs of 97.2 million riyals, with no rental expense being recorded according to International Accounting Standard No. 17 of 252.9 million riyals. As a result, net losses increased by 44.5 million riyals due to the application of the standard during the current period.

3- The non-recurring losses were recorded during the current year as a result of the exit and the closure of a number of poorly-performing sites that included hotel, entertainment and commercial sites that were achieving operational losses, where The operating losses of these sites for the year 2019 amounted to 35.0 million riyals, and the losses of excluding capital assets and exit costs for these sites amounted to 48.4 million riyals, bringing the total non-recurring losses from these sites during the current year to the amount of 83.4 million riyals. Which will have a positive impact on the results of the company for the year 2020 AD, God willing.

4- Increasing the financial burdens by an amount of 4.3 million riyals.

5- During the current period, the company did not reverse any provisions, but during the same period of the previous year, the Zakat provision was paid at an amount of 1.6 million riyals.

It is mentioned that the measures taken by the administration to rationalize expenses led to a decrease in operating expenses during the current year, as follows: