Dubai: The Middle East’s biggest restaurant operator, Americana, recorded a 19.2 per cent drop in net profits for the first three months of 2023, to $58 million. But revenues edged higher, by 2.1 per cent to $589 million.
The decline on the profit numbers is being attributed to currency devaluations in Egypt and Lebanon. Plus, there was also the ‘partial seasonal shift’ of having Ramadan during Q1 rather than in Q2. If this seasonal impact is removed, the like-for-like revenue increase would have been 7.5 per cent rather than the 2.1 per cent that was delivered.
Commodity inflation too had a hand in the squeeze on profits.
Full speed ahead in Saudi Arabia
"Americana Restaurants’ medium-term objective is to double revenues while targeting healthy mid-single digit like-for-like growth in sales, opening between 250-300 net new restaurants per year," the company, dual listed on Abu Dhabi's ADX and Saudi Tadawul, said in a statement. "Management believes that Saudi Arabia provides a particularly compelling opportunity for restaurant expansion, while Iraq offers an exciting greenfield opportunity."
During the current period of economic headwinds in Egypt, the company will focus on operations, people transformation, and cost efficiencies."
Having had one of the Gulf's biggest IPOs of recent times, Americana will work to improve its profit margins through the second-half of the year. This would come as 'existing and strategically built inventory is phased out'. The target is for a 250-300bps improvement on adjusted EBITDA margin over the medium-term.
In the first three months, there were 49 gross new restaurants, with the overall tally as at end March being 2,228 outkets and with 63 new ones under construction.
The management expects to open 250-300 net new restaurants per year over the medium-term. With strong momentum from the expansion, the company intends to build on this through 2023. "Looking ahead to Q2-2023, management expects the impact of Ramadan on sales to be comparatively less than in Q2-2022, when the entire Holy Month fell within the period," the statement said.
