The net profit of “Americana Restaurants International” (6015) fell by about 45% YoY in the first six months of 2024, reaching a total of about USD 80 million.
Boycott
The company, listed on the Saudi and Abu Dhabi stock markets, was affected by a 15.2% YoY fall in revenues during the first half, raking in just USD 1.05 billion.
This was due to a decline in sales impacted by ongoing geopolitical tensions in the region, despite opening new restaurants.
So what
Americana’s revenues fell by 14.2% YoY in Q2 2024. However, it saw a 13.3% quarterly increase in revenues compared to Q1 2024.
This is attributed to the recovery in some of its markets, coinciding with the last days of Ramadan, Eid al-Fitr, and Adha holidays in the second quarter.
The company’s results also showed a 40% drop in net profits from April to June compared to the same period in 2023.
Some context
In November of last year, Americana anticipated its business would be affected by geopolitical developments, amid rising calls for a boycott of American products. This was in response to Israel’s war on Gaza, which began on October 7, 2023.
This impact was evident in last year’s annual results, when it achieved profits below analysts’ expectations.
It is worth noting that the giant company holds franchises for well-known global brands such as KFC, Pizza Hut, and Hardee’s in the Middle East, North Africa, and Kazakhstan.
Now what
Americana Restaurants stated that it continues to maintain a solid financial budget and a strong overall financial position.
It will also focus on revenue improvement initiatives such as smart pricing, promotional offers, and customer-targeted marketing policies.
Additionally, the company revealed that its adjusted free cash flow reached SAR 165.4 million during the first half of the year, with a cash conversion ratio of 33.4%.
This allows it to implement its growth plans and support its dividend distribution policy.
Americana added 81 new restaurants in the first six months, bringing its total number to 2,477 as of June 30, 2024. It expects to add between 175 and 185 new ones in 2024.
