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RIYADH: Al-Hokair's preliminary results for tourism and development showed that the net profit for the second quarter of 2019 fell by 79.7% year-on-year.
The company said in a statement Tuesday that net profit reached 0.63 million riyals in the second quarter of this year, compared to 3.1 million riyals in the same quarter in 2018.
The company recorded a loss of 32.06 million riyals in the first quarter of 2019.
The company attributed the lower net income earnings down to RS 8.7 million, mainly due to increased market competitiveness, which resulted in a decrease in the average price of selling the daily room of existing hotels.
The closure of a number of underperforming sites, including recreational sites and restaurants, which resulted in operating losses, resulted in the closure of these sites, resulting in a $ 2.6 million decline. riyals of income and a financial burden of 1.6 million riyals.
The statement pointed out that although the application of the International Standard for Financial Report No. 16 has a negative impact on net income in the current quarter, with a total amount of SAR 10.4 million, this is reflected in an increase in financing costs of $ 23.9 million, depreciation charges of $ 52.4 million and a decrease in rental expenses. Amount to SR 65.9 million.
Net income for the quarter compared to the same period last year was only $ 2.5 million, due to a number of factors including the streamlining of the Authority's expenditures in 2018, which resulted in a decrease in the volume of operating expenses.
Direct costs decreased by SAR 9.4 million (including a decrease of SAR 4.4 million in salary and other costs by SR 5 million) and administrative and overhead costs by SR 5.4 million ( including a decrease of SR 4 million in salary costs and USD 1.4 million). In addition to the increase of the share of the company in the profits of joint ventures for an amount of 4.2 million riyals.
The company's losses in the first half of 2019 increased to 31.44 million riyals, compared to a loss of 4.42 million riyals, an increase of 611.1%.
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