Woqod's H1 2025: Profit Margins Rise, but Falling Sales Drag Net Profit Lower
• The company's sales revenue dropped 10% year over year.
• Woqod's share price remained stable during H1 2025.
• Net profit witnessed a drop in H1 2025 due to a remarkable decline in sales revenue and other income sources, partially offset by an improvement in gross profit margin.
Throughout H1 2025, Woqod's stock price remained stable with a negligible change. The year began with stock trading at 15.00 riyals per share, and by the end of the H1, it closed at 14.98 riyals per share.
Here are the key numbers:
● Sales Revenue: 12,473 million QAR vs. 13,939 million QAR in H1 2024 (a 10% YoY decline).
● Gross Profit: 348 million QAR vs. 332 million QAR in H1 2024 (a 5% YoY increase).
● Net Profit: 482 million QAR vs. 504 million QAR in H1 2024 (a 4% YoY decline).
● Earnings per Share: 0.460 QAR/share vs 0.480 QAR/share in H1 2024 (a 4% YOY decline).
● Dividend per Share: 0.400 QAR/share interim dividend, the same as in H1 2024.
A detailed comparison between H1 2025 and H1 2024 reveals a jump in the average gross profit margin. In H1 2024, the company maintained a gross profit margin of 2.39%. This margin experienced a slight increase to 2.79% in H1 2025. While this increase may appear minor, it has significant implications for the company's overall profitability, especially considering the substantial revenue it generates. This increase in gross profit margin resulted in a positive impact on net profit, amounting to 51 million QAR. This underscores the sensitivity of the company's financial health to even small changes in gross profit margins.
On the other hand, the company experienced a significant 10% decline in sales revenue during the period, leading to a reduction in net profit by 35 million QAR. This decline may be attributed to changes in either sales volume, pricing strategy, or a combination of both. A detailed analysis of these factors is essential for management to identify the root causes—such as weakened market demand, increased competition, or pricing inefficiencies—and to develop effective corrective actions to stabilize revenue and protect profitability going forward.
In addition to the revenue generated by its core business activities, the company has harnessed significant income from various supplementary sources beyond its primary operations. Notably, a substantial portion of this additional income is derived from interest revenues. The impact of this supplementary income source represented a negative influence of 10 million QAR when compared to the same period in H1 2024.
The company's core business, fuel retail, is highly susceptible to the impacts of the global macroeconomic situation, particularly fluctuations in oil prices, over which management has no control. Therefore, management must take a proactive approach by emphasizing the establishment of a robust market position and implementing effective expense control measures over expenses and pricing strategy. These actions are essential to counter and mitigate the adverse effects that may arise during periods of declining oil prices. By doing so, the company can better safeguard its financial stability and navigate the challenges posed by external market forces.
For more comprehensive information, please refer to the reliable financial information source, http://sahmik.com.