Alhokair turns profitable in the first half

Abdulmohsen Al-Hokair Group for Tourism and Development turned to profit during a 6-month period with 4 million riyals, compared to losses of 31.4 million riyals in the same period last year.

According to Arabiya Net, the company's profits rose to 2 million riyals in the second quarter, compared to 0.6 million riyals in the same quarter of last year.

The reason for the increase in net profit during the current quarter compared to the same quarter of the previous year is the following:

1- Despite the decrease in revenues by 179.4 million riyals, mainly due to:

- The company's revenues were generally negatively affected by the emerging corona virus pandemic, as all entertainment sites were closed during the current quarter until June 20, 2020 due to precautionary measures and preventive measures Taken by the state to control the emerging corona virus and reduce the risk of its spread.

- The closure of a number of poorly performing sites during the past year, including hotel, entertainment and commercial sites that were achieving operational losses, and the closure of these sites resulted in a decrease in revenues during the current quarter by an amount 24.2 million riyals

2- This was offset by a decrease in total expenses of 120.9 million riyals during the current quarter compared to the same quarter of the previous year, as follows:

- The decrease in direct costs amounted to 93.5 million riyals due to:

a- Obtaining exemptions from the rental value of 21.4 million riyals during the current quarter for some rented hotel, entertainment and commercial sites, in conjunction with the new Corona virus.

b- Decrease in the depreciation expense of right-of-use assets by 21.3 million riyals, mainly due to the amendment of the lease contracts of all hotels leased from the main shareholder to become a percentage of the revenue instead of the amount of rent This resulted in the exclusion of those hotels from the calculation within IFRS 16, and thus this led to a decrease in the depreciation expense of the right-of-use assets.

C- Decrease in salaries and wages expenses by 24.8 million riyals, property and equipment depreciation expenses by 2.5 million riyals, energy costs by 10.0 million riyals, and other expenses of 13.5 million riyals.

- Reducing selling and marketing expenses by ...