Saudi mall operator Arabian Centres bucks retail malaise as profits surge

Time: August 21, 2019  

Makkah Mall, one of the shopping malls operated by Arabian Centres. The group’s shares edged 3 percent higher after first-quarter profits almost trebled. (Reuters)
  • Mall operator defies online shopping pressure by lowering discounts to tenants, boosting occupancy and rental revenues

LONDON: Arabian Centres, the Saudi mall operator which went public in May, said first-quarter consolidated net profit almost trebled to SR227 million ($60.53 million) as occupancy edged higher across its shopping centers. Revenues increased by about 2.5 percent over the year to SR572.5 million.

The results helped to propel the group’s shares 3 percent higher on Tuesday.

The group said that it boosted performance by offering lower discounts to its tenants which helped to drive rental revenues. Like-for-like occupancy across all malls increased  to 93.2 percent from 92.4 percent in the year earlier period. Finance costs fell by about 65 percent from a year earlier to SR73.9 million.

FASTFACT

27 – Arabian Centres plans to expand its mall portfolio to 27 within four years.

Retailers across the Middle East are coming under increased pressure as more consumers shop online, while at the same time, tourists are spending less in dollar-pegged economies because their purchasing power has been cut by the strength of the greenback. Still, in Saudi Arabia, the under-served retail market is expected to receive a boost from rising investment in the entertainment sector, especially new cinemas.

“Faced with the rising challenge of online shopping, the brick-and-mortar retail segment has sought to diversify its offering to secure its customer base, providing an increased range of leisure and entertainment facilities,” said Oxford Business Group, in a report analyzing emerging trends in the Saudi retail sector.

“The reintroduction of cinemas to the Kingdom in April last year … is expected to increase retail footfall,” it said.

Arabian Centres, majority-owned by Fawaz Alhokair Group, listed its shares on the Tadawul stock exchange in May — the first to do so in the Kingdom under Rule 144a, allowing the sale of securities, mainly to qualified institutional buyers in the US.

The group aims to expand to 27 malls within four years.

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Mazin Al-Ghunaim, CEO of Bidaya Home Finance

Time: August 21, 2019  

Bidaya Home Finance CEO Mazin Al-Ghunaim

Mazin Al-Ghunaim is the chief executive officer of the Saudi-based Bidaya Home Finance.

It is an Islamic home finance company that has recently won four prestigious awards in Global Finance magazine’s consumer digital banking categories — Best Bill Payment and Presentment, Best in Social Media and Marketing Services, Best Digital Mortgage Bank and Best Islamic Digital Bank.

Al-Ghunaim said: “In the Kingdom of Saudi Arabia, home ownership for all citizens is a key goal of Vision 2030 and at Bidaya, we are committed to utilizing the most advanced digital technologies to provide innovative easy-to-understand solutions that enable fast processing of online home financing applications in order to achieve our target of increasing home ownership to 60 percent by 2030.”

Mazin comes with an excellent record of accomplishment in building and managing large business portfolios internationally, regionally and locally.

He has over 20 years of experience in retail banking and consumer finance, having worked in leading banks, as well as financial institutions such as Arab National Bank, Saudi Investment Bank and Abu Dhabi Islamic Bank.

He spent more than five years establishing and managing leading home finance companies and the latest was Bidaya Home Finance.

Al-Ghunaim holds a master’s degree in Islamic Economy, and he has participated in many local and international events, conferences, workshops and roundtable discussions on risk management, investment and finance management.

He is also the vice-chairman of the executive committee of finance companies committee in the Saudi Arabian Monetary Authority.

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Smart technologies up Saudi employees’ productivity satisfaction

Time: August 18, 2019  

Saudi Arabia’s growing appetite for technology is evident from the fact that today the country is the largest IT market in the Middle East.

A recent research conducted by Avaya, polled employees (both males and females) across 9 countries — Saudi Arabia, UK, Italy, South Africa, UAE, Singapore, Germany, Australia and France — has found that an overwhelming majority of Saudi respondents (84 percent) agree that technology-assisted workplaces help them increase their productivity.

While it can be expected that younger employees and tech-savvy millennials would be most in favor of using technology to aid their job functions, an interesting finding was that it was actually the age group of 55 years and over that showed the highest agreement (95 percent).

Seventy percent of the survey’s Saudi respondents stressed the importance of enhancing communications and collaboration systems in their organizations. This figure places Saudi Arabia first among the nine countries included in the research. It is an indication that organizations in the Kingdom need to pay urgent attention to the needs of these employees.

Besides increasing job satisfaction among this large group of employees, the investments that Saudi organizations make to enhance the communication and collaboration tools could go a long way in optimizing operations.

There is a clear need to do this as presently, a surprisingly large number of Saudi employees (85 percent) report loss of work time due to poor communication.

According to Zuhair Diab, managing director of AVAYA, Saudi Arabia, such productivity losses can be easily avoided through the use of smart technologies.

“Take video collaboration for example. Today, broadband internet and easy-to-set-up-and use conferencing solutions are conveniently available to businesses across the Kingdom,” said Diab.

He added: “Together, these facilitate instant connectivity for teams, leading to enhanced collaboration, rapid sharing of ideas and information, and reducing the need to for business-related travel. It should come as no surprise that our research found that the large percentage employees, especially women (80 percent), expressed their desire for desktop video conferencing technologies.”

Going a step further, Saudi companies could also look to converge their customer and workforce experience solutions.

“This would not only enable them to maximize the value of each customer interaction but also increase the productivity of their workforce. Furthermore, a converged customer and workforce solution can bring simplicity to business processes, lower total cost of ownership and ultimately deliver a faster and higher return on investment.”

Companies that can effectively align their technology investments with the current market need for enhanced customer and employee experiences will be in the leading position in the Saudi market.

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Saudi Aramco sets share sale stage with $47 billion profit

Time: August 13, 2019  

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Shaybah, the base for Saudi Aramco’s Natural Gas Liquids plant and oil production in the surrounding Shaybah field in Saudi Arabia’s remote Empty Quarter. (AFP file photo)
  • Saudi oil giant holds first-ever earnings call with investment analysts

DUBAI: Saudi Aramco proved itself the most profitable company in history on Monday with financial figures that beat all its competitors by a long way.

The Kingdom’s oil giant reported net income of $46.9 billion for the first half of 2019, way ahead of the $31.5 billion reported by the next biggest earner, Apple. Aramco’s profits are nearly 50 percent higher than those of the five largest Western oil companies combined.

It was the first time Aramco — a private company owned by the Kingdom — had disclosed its financial strength in a formal results announcement, and followed the unprecedented level of financial information disclosed in April, when it broke world records in the bond markets with a much-in-demand $12 billion issue.

The company also underlined that it was ready to go to international stock markets in an initial public offering (IPO) of shares whenever the Kingdom thought conditions were right. Some experts think the IPO could happen next year — earlier than many analysts had predicted.

Saudi Aramco’s president and CEO, Amin al-Nasser. (AFP file photo)

Amin Nasser, the president and chief executive of Aramco, said the company’s profits — lower than in the same period last year — were earned against a background of tough conditions in the global energy market.

“Despite lower oil prices during the first half of 2019, we continued to deliver solid earnings and strong free cash flow underpinned by our consistent operational performance, cost management and fiscal discipline,” he said in a formal statement to the London Stock Exchange, where Aramco’s bonds are listed.“Our financials are strong and we continue to invest for future growth.”

The profit announcement came at the start of a busy day for Aramco. It also announced a planned investment in the petrochemicals and refining business of the Indian comglomerate Reliance Industries. There was speculation about Aramco buying a 20 per cent stake in the business for about $15 billion, but Khalid Al-Dabbagh, Aramco’s chief financial officer, declined to confirm those figures and said the talks with Reliance were at “an early stage.”

Al-Dabbagh was speaking on a conference call with investment analysts — another first for Aramco — in which he also revealed that the upgrade to the Kingdom’s east-west pipeline, aiming to increase capacity on the route from 5 million to 7 million barrels per day amid security concerns in the Arabian Gulf, would be finished next month.

Dividend payments to the Kingdom amounted to $46.4 billion in the first half of 2019, including a “special dividend” of $20 billion “refecting the exceptionally strong financial performance the company delivered in 2018.”

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Nexthink expands operations in Saudi Arabia

Time: August 05, 2019  

Maged Eid, area vice president of Nexthink.

Nexthink, a leader in digital employee experience software for enterprises, will strengthen its existing operations in Saudi Arabia as a response to the company’s strong growth, by increasing its workforce and presence through strategic partnerships.

Maged Eid appointed as the area vice president will oversee Middle East, Turkey and Africa growth strategy; he will drive new business and strengthen existing operations in the region. In his role, Eid will work closely with the Saudi Arabia team to ensure companies have better support and significantly improve the digital employee experience.

“Saudi Arabia is a key market for us and we will continue to invest in this region by increasing our workforce and partnerships with key distributors,” said Eid. “Nexthink’s technology enables an organization’s IT department to take a proactive approach to improving their IT performance, resolving potential problems quickly and focusing better on company-wide initiatives. We believe there is a clear need for our solutions in the Kingdom that can help an organization transform their business.”

Some of Nexthink’s key clients in the Kingdom include organizations from the finance, defense, government, health care and energy sectors.

The Kingdom continues to adopt innovative technologies as a result of the National Transformation Program (NTP) objectives and Vision 2030 strategy that will drive significant ICT spending ($34.5 billion) in technologies such as digital transformation, cloud, mobility, artificial intelligence and robotics.

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India’s Samana Global eyes hotel projects in UAE, Saudi Arabia

Time: July 31, 2019   

India's Samana Global eyes hotel projects in UAE, Saudi Arabia
Samana Global Services is on the lookout for upscale hotel projects in Dubai, Sharjah and Saudi Arabia as part of a major plan to expand its hospitality business in the Middle East, a top executive of the group has said.

The hospitality and retail arm of the Indian multi-business group Samana Global Business Solutions is also eyeing hotel projects in the southeast Asia and Indian Ocean regions as part of its ambitious plans.

“We are quite bullish about UAE and Saudi Arabia for our expansion plans in the hospitality business and are in talks for acquiring hotel projects in Dubai, Sharjah, Oman and Saudi Arabia currently,” Vinay Nair, chief operating officer of Samana Global Services, told Arabian Business.

Though the group’s preference is to acquire management contracts for 5-star hotel projects, we are also open to other options like joint development or acquisition of properties for hotel projects, Nair added.

The group will fund its expansions in the hospitality sector partly using proceeds from its $560 million Alternative Investment Fund, launched in Abu Dhabi and India December last year, he added.

Samana Global, which already runs a hotel in Riyadh, is currently in talks with the promoters of the hotel property to acquire a second hotel project in the Saudi Kingdom.

“The talks are on (with the promoters of the Saudi hotel property) but nothing has been finalized yet,” he said.

Nair said the group was also open to having hotels in the Red Sea area which the Saudi Government is currently developing as a major tourist attraction with full fledged hotel and recreation facilities. “We are still studying the opportunities in this area”, he said.

Samana Global also runs high-end hotels in Trivandrum and Calicut in Kerala. The group runs its hotels under the brand name Apollo Dimora.

“We are aggressively pursuing opportunities (in the hospitality segment) in the Middle East region as we have set a target of achieving 1,000-rooms by next year. We are hopeful of achieving this target,” Nair said.

Nair said the decision to lookout for hotel projects in the Southeast Asia and Indian Ocean region also is part of the group’s strategy to not only achieve the target (of 1,000 rooms) but go beyond it.

This article was first published in Arabian Business

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Brazilian food giant BRF in talks to produce chicken in Saudi Arabia

Time: July 21, 2019  

Brazilian food giant BRF in talks to produce chicken in Saudi Arabia

BRF CEO Lorival Luz said that he’d like to see the talks concluded by the end of 2019
In January, BRF announced that it planned to restore chicken exports to Saudi Arabia to previous levels after one of its plants lost its certification to export to the kingdom.

Brazilian food giant BRF is in advanced talks with multiple parties in Saudi Arabia to produce chicken in the kingdom, according to company CEO Lorival Luz.

In January, the firm announced that it planned to restore chicken exports to Saudi Arabia to previous levels after one of its plants lost its certification to export to the kingdom.

The facility – known as Lejeado – had been exporting around 6,500 tonnes of chicken products to Saudi Arabia each month before the Saudi government significantly reduced the number of Brazilian exports allowed to ship there.

In an interview with Bloomberg, Luz said that the company is now in advanced talks with more than one party in Saudi Arabia to produce chicken in the kingdom.

“It’s a priority for BRF,” he said. “I would like to see talks concluded by year-end.”

BRF began exporting meat and poultry products to the Middle East in the 1970s. In 2016, the firm consolidated OneFoods, a regional subsidiary. The firm now has 5 production units in the region, as well as 11 distribution centres and over 6,000 direct employees.

In May, Reuters reported that BRF executives travelled to Saudi Arabia to discuss the expansion of its presence there.

At the time, company chairman Pedro Parente said that the BRF executives met with Saudi authorities and potential partners to explore meat production in the country.

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Allergan reaffirms commitment to eye care in KSA

Time: July 16, 2019  

Allergan, a global biopharmaceutical company, recently participated in the 31st Annual Scientific Meeting of Saudi Ophthalmological Society (SOS) held in Riyadh.

Allergan, a global biopharmaceutical company, recently participated in the 31st Annual Scientific Meeting of Saudi Ophthalmological Society (SOS) held in Riyadh, by presenting data from key opinion leaders in the field of eye care and providing scientific insight. The conference shed light on new developments surrounding prevalent eye diseases, such as cataract, retina, prevention of blindness, pediatric ophthalmology, glaucoma as well as genetics.

Allergan works with organizations within the Saudi health care environment, such as the SOS, and actively seeks to contribute to scientific events to drive awareness programs across the Kingdom.

Ramsey Morad, Allergan’s vice president for India, Middle East and Africa, said: “We are now on the cusp of entering a new era of innovation within eye care, and we are continuing to actively seek out opportunities to fulfill ophthalmic unmet needs.”

Our aim is to continue driving innovation in Saudi Arabia with the underlying objective of creating sustainable solutions for patients.”

Yazeed Alsufyani, brand manager — eye care at Allergan Saudi Arabia, is at the forefront of building, maintaining and developing creative programs and engagement strategies with the Ministry of Health, as well as for the private sector.

There were 3.85 million diabetes patients in Saudi Arabia in 2017. Diabetics are at high risk of retinal diseases such as diabetic macular edema, which are increasing in proportion with the prevalence of diabetes. This underlines the serious need to drive awareness surrounding eye care and to develop innovative therapies for optimal treatment.

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India’s Oyo Hotels eyes Saudi expansion, says CEO

Time: July 14, 2019    

India's Oyo Hotels eyes Saudi expansion, says CEO
Indian entrepreneur and founder of Oyo Hotels & Homes Ritesh Agarwal

India’s Oyo Hotels & Homes hopes to expand its offerings in Saudi Arabia and will likely meet its target of creating 5,000 jobs for Saudis earlier than anticipated, according to CEO Ritesh Agarwal.

In February 2019, the kingdom’s Public Investment Fund (PIF) and Oyo signed a memorandum of understanding (MoU) in which they agreed to explore co-investment opportunities, create new jobs and develop “new sectors”.

“We look at Saudi as a very strategic growth market,” Agarwal said in an exclusive interview with Arabian Business. “The partnership is very special for us and we want to continue to go deeper.”

Agarwal said Oyo currently manages more than 80 buildings and properties in over 10 Saudi cities, including Riyadh, Jeddah, Dammam, Taif and Abha.

“We’re in markets where having a great quality experience at the right price point really matters,” he added.

Additionally, Agarwal said that Oyo has “already created a significant amount of jobs for locals”.

“We have promised to create over 5,000 Saudi jobs by the end of next year,” he added. “We feel that we’ll exceed that by the second quarter.”

Regional expansion

Although he declined to give specific details, Agarwal said that Oyo is also exploring other opportunities in the region.

“Fundamentally, infrastructure investment and job creation are two things that we bring to countries,” he said. “We’ve received a lot of inbound interest from some countries. We are looking at potential opportunities, but it’s too early to comment on any specific country where we would launch.”

In a separate interview earlier in June, Manu Midha, Oyo’s regional head for the Middle East, said that the company plans to take its total rooms under management to 12,000 rooms in 150 hotels across the UAE by 2020.

Midha said that since Oyo was launched in the UAE last year it has welcomed 100,000 guests from 78 countries across 1,700 rooms in over 80 hotels.

Founded by Agarwal – now 25 years old – in 2013, Oyo is now present in 881 cities around the world, with approximately 850,000 rooms in over 23,000 hotels. It is now considered the third largest hospitality chain in the world based on room count.

The company aims to be the world’s largest hotel chain by 2023, surpassing Marriott.

This article was first published in Arabian Business

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Saipem CEO says Saudi contracts part of natural gas shift

Time: July 11, 2019  

Saipem shares rose 2.9 percent in Milan on Wednesday, outperforming a 0.8 percent rise in Italy’s blue-chip index. (AFP)
  • Saipem shares rose 2.9 percent in Milan on Wednesday, outperforming a 0.8 percent rise in Italy’s blue-chip index

ROME: Two contracts signed in Saudi Arabia for $3.5 billion by Italy’s oil contractor Saipem are part of a shift in the company’s strategy to focus more on natural gas, Chief Executive Stefano Cao said on Wednesday. Saipem said on Tuesday it won two new contracts from Saudi Aramco for the development of land facilities of the Berri and Marjan gas fields, which are both located in the Arabian Gulf. The gas contracts announced on Tuesday “confirm that this is the fundamental strategy for our company,” Cao said.
Saipem shares rose 2.9 percent in Milan on Wednesday, outperforming a 0.8 percent rise in Italy’s blue-chip index.
“The news is very positive and improves the visibility of our estimates on 2020-2022, in particular for the E&C (Exploration and Construction) onshore division,” broker Equita said.
Stefano Cao met in Milan on Wednesday with Filipe Nyusi, the president of the Republic of Mozambique, where Saipem last month won a $6 billion exploration, procurement and construction contract for the Anadarko Mozambique liquefied natural gas project.
The Saipem CEO said Mozambique, a gas producer, would become one of the most important countries in the company’s portfolio. “In the energy transition (toward renewables) the gas chain will play a fundamental role,” Cao said.

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