Shaker H1 net profit up 9%; revenue soars to $206mln

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Al Hassan Ghazi Ibrahim Shaker Company (Shaker), a leading manufacturer, importer, and distributor of air conditioners and home appliances in Saudi Arabia, has announced its financial results for the first half with a record Q2 performance, thus reflecting its strong performance and strategic execution.

Announcing the financial results for the six-month period ended June 30, 2024, Shaker said its revenue soared to SAR758 million ($206.3 million), up 16% year-on-year (YoY), driven by higher sales in the HVAC solutions segment and balanced growth across the company’s brand portfolio.

Its gross profit hit SAR181 million, up 12.2% YoY, in line with higher revenues and an optimized portfolio mix, while the operating income fell 11% to SAR 42.9 million owing to higher SG&A expenses to support increased hiring, and increase in impairment losses on trade receivables, due to sales and operations seasonality.

Shaker's net profit surged by 9.05% YoY to SAR48.7 million, mainly driven by strong revenue growth, increase in share of profit from the LG Shaker factory and lower finance costs.

On its solid performance, CEO Mohammed Ibrahim Abunayyan said: "Our exceptional Q2 2024 results underline the strength of Shaker's business model and the effectiveness of our growth strategies. Despite typical seasonal challenges, we delivered our highest second quarter revenues and net profit since 2017."

Shaker achieved its strongest Q2 results in terms of revenue and net profit since 2017, thus marking a significant milestone in its growth journey.

"The continued growth in Q2 of the year, typically impacted by seasonality, demonstrates the robustness of Shaker’s fundamentals and the resilience of its long-term vision," stated Abunayyan.

According to him, the company’s strategy of strengthening its core business segments has continued to deliver results, leading to gains in market share and solidifying its leadership in the HVAC and Home Appliances segment.

"The B2B segment has shown continuous upward trajectory, while the robust B2C brand portfolio, combined with an expanding direct to consumer business, has positioned Shaker to effectively diversify its touchpoints to directly reach customers in the most convenient ways," he noted.

"Our sales efforts across both B2B and B2C has driven a strong performance in the LG Shaker factory YoY. This strategic channel diversification has been key to sustaining growth and ensuring customer satisfaction across all segments," said Abunayyan.

Shaker’s commitment to sustainable growth while strengthening its financial health remains a priority. The company successfully reduced net debt by 21.16% in H1-FY24 compared to H1-FY23, he added.

The Saudi group has entered into a deal with LG Electronics and the Ministry of Investment of Saudi Arabia to localize the manufacturing of AC compressors. It is currently in the feasibility study phase and is progressing well.

Shaker has successfully completed the transition to SAP's S/4HANA, a highly advanced ERP system designed for the integrated management of main business processes post-period end in July 2024.

The unveiling of a new growth strategy is expected by end of Q3-2024 and will position Shaker for long-term sustainable growth.

"We've achieved significant milestones across our operations, reinforcing our market leadership and setting the stage for sustained long-term growth. In particular, the Go-Live of our new ERP system will be a key pillar for a new, scalable, and sustainable digital landscape for our organization," remarked Abunayyan.

"As we look ahead, we're excited about the imminent launch of our new growth strategy. This roadmap will build on our strong foundation and guide Shaker towards new heights of innovation and sustainable growth in the evolving Saudi market," he added.-TradeArabia News Service