According to Arabia Net, the company attributed these losses to the following reasons:
Revenue: decreased by an annual rate of 1.6% during the fiscal year 2020, which is equivalent to 84.0 million riyals compared to the previous year, mainly due to the effect of the closing of shops Poor performance in the framework of implementing the strategy to strengthen the portfolio of brands and the affiliated exhibition network, in addition to the temporary closure of all affiliated stores due to the repercussions of the spread of the virus (Covid 19).
- The company temporarily halted operating activities starting from March 16, 2020 in all affiliated stores across the Kingdom in compliance with government directives related to protecting citizens and residents and containing the spread of the virus (Covid) 19).
- Gross profit: decreased at an annual rate of 62.4% during the fiscal year 2020, which is equivalent to 676.7 million riyals compared to the previous year, and this reflects the effect of recording exceptional appropriation costs of 596.7 million riyals within the framework of determining the fair market value of the company’s stock and reducing its obsolete stock.
- The decrease in gross profit is also due to the effect of applying IFRS 16, which requires the company as a leasing entity to register the right to use the leased assets and the lease obligations. In addition to recording depreciation and interest expenses.
- Depreciation and amortization expenses: increased to 295.5 million riyals during the fiscal year 2020, an annual increase of 1.9%, or 5.6 million riyals compared to the previous year, where This is due to the replacement of the rental expense item with the item of depreciation of the right to use assets and the cost of financing after applying IFRS 16.
- Decay costs: increased to 242.5 million riyals during the fiscal year 2020, compared to 2.6 million riyals during the fiscal year 2019, where the company recorded exceptional costs of impairment during the year The Ministry of Finance 2020, as part of a revaluation of its existing assets.
Financial costs: increased to 451.5 million riyals during the fiscal year 2020 AD, with an annual increase of 124.7%, or the equivalent of 250.6 million riyals compared to the previous year.
- This reflects the use of the present value method in accordance with the implementation of IFRS 16, and the recording of interest on asset-use obligations in the amount of SAR 240.5 million.
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