Abu Dhabi: After a slow Q1-2024, ADX and Saudi Tadawul-listed Americana's H1-2024 revenues decreased 15.2 per cent to $1.05 billion amid regional geopolitical tensions, the company announced Tuesday. And this is despite support from new store openings.
"Revenue growth was impacted by lower like-for-like sales due to the ongoing regional geopolitical situation, despite support from new store openings," Americana said.
Net profit (attributable to the parent company's shareholders) for the first half of 2024 was $80.0 million. The company explained that lower sales and incremental depreciation charges due to new store openings impacted net profit.
Company revenues in the year's second quarter declined 14.2 per cent compared to Q2 2023.
That said, the company observed revenue growth of 13.3 per cent compared to Q1 of this year on the back of a recovery in some of its markets, fewer Ramadan days, and support from both Eid events falling in the second quarter. Similarly, net profit declined 40.1 per cent compared to Q2 2023; however, net profit increased by 85.3 per cent compared to Q1 2024.
Americana is a franchisee of several international food and beverage brands in the Middle East. It operates in 12 countries across the region, including North Africa and Kazakhstan. Americana's portfolio includes KFC, Pizza Hut, Hardees, Krispy Kreme, Peet's Coffee, Wimpy's, Costa Coffee and Baskin Robbins. The company had raised $1.8 billion from its IPO in November 2022.
New stores
Furthermore, the company continued to expand its restaurant network by selectively expanding in less impacted markets and opening 81 gross new stores in the first half of 2024. This brings its total restaurant count to 2,477 as of June 30, 2024.
“Despite implementing value-based promotions as a strategic effort to drive transaction momentum, gross margins improved in Q2 2024, driven by favourable commodity prices and the procurement and revenue management initiatives,” Americana said.
Americana Restaurants said it maintains a healthy balance sheet and a solid financial position. With an adjusted free cash flow of $44.1 million for the first half of 2024 and a cash conversion ratio of 33.4 per cent, the company’s earnings statement on ADX said it is well-positioned to meet its growth plans and support its dividend policy.
Future strategy
The company also stated it is well-positioned for progressive expansion within its operational territories. However, considering the evolving geopolitical environment, Americana said it has opted for a watchful approach to store expansion plans and expects to add 175 – 185 net new restaurants in 2024.
“Additionally, the Company will continue to focus on revenue recovery initiatives such as smart pricing, targeting, promotion, and marketing, with a sharp focus on driving transactions and increasing marketing investments,” it said.
Seperately, the company announced to its shareholders and the market that it has received approval from ADX on the buyback of 25 million shares listed on ADX. "These shares will be repurchased from the open market and will be allocated to eligible employees as per terms set out in the company’s approved share-based Long Term Incentive Plan (LTIP)," it said in a bourse filing.
