Restaurant operator Americana's Q1-2024 net profit drops to $26.6m over Middle East situation
Middle East's biggest F&B operator also sees sharp revenue dip
Dubai: The Middle East crisis centered on the Gaza situation took quite a bite of the F&B operator Americana Restaurants’ net profit for the first three months of 2024, totaling $26.66 million from $58.79 million a year ago. Revenues too were impacted, at $493.5 million and down from $589.4 million.
In a statement, Americana, which is listed on ADX and Saudi Tadawul, attributed to geopolitics as a factor behind the profit dip. The Middle East’s biggest quick service restaurant franchise operator, Americana’s portfolio includes KFC, Pizza Hut and Hardee’s among others. (McDonald’s recently came out with its quarterly numbers, and which too felt the heat of geopolitics.)
Another factor that dented Americana’s Q1-2024 results was the start of Ramadan in March. There were also the higher depreciation charges and rent expenses brought on by new store opening over the first three months.
Even then, the company ‘continued to exhibit financial resilience’ with a cash position of $159.9 million, ‘indicating sustained financial health of the business’. (The stock is down 12.87 per cent over the last 12 months.)
Stick with expansion plans
"Americana Restaurants is committed to navigating the current economic adversities while continuing its expansion strategy," said a statement. "In 2024, the company will continue expanding its restaurants portfolio by opening stores in markets which are less impacted by the current regional macro-environment."
This year, the plan is to have between 200 to 225 net new stores.
Special dividend for 2023
Shareholders, meanwhile, have approved distribution of dividends totaling $179.4 million (or $0.0213 per share) for 2023, split between an ordinary dividend of $129.7 million and a one-time special dividend of $49.7 million.
In 2023, the company recorded net income of $259.5 million on top-line numbers of $2.41 billion.
Americana will 'continue to focus on revenue recovery initiatives such as smart pricing, targeting, promotion and marketing, with sharp focus on driving transactions through value, crave and familiarity
Improve on margins
Through the rest of 2024, Americana is gunning for an improvement in gross profit margins. "Looking forward to Q2-2024, management anticipates a lesser impact of Ramadan on sales compared to Q2-2023, when the majority of the Holy Month fell within the current period," the statement added.