Hit by COVID-19 restrictions, Saudi food company Herfy first-quarter profit plunges 48%
Saudi food service company Herfy posted a 47.71% plunge in first-quarter net profit to 25.13 million riyals ($6.7 million) compared to 48.06 million riyals for the same three months in 2019.
The company said in a bourse filing on Thursday (Apr 23) the drop is due to sales being hit by measures imposed by the Saudi government to contain the spread of the novel coronavirus.
On Apr 12 the company said it was unable to determine the financial impact the COVID-19 restrictions would have on its business. Herfy’s foodservice and catering businesses are hit by measures including the temporary closure of shopping malls, restaurants in commercial centres, and the restriction of food delivery services.
Herfy’s sales dropped by only 5.26% to 296.93 million riyals versus 313.4 million riyals for the first three months of 2019. But operational profit slumped by 41.19% to 34.83 million riyals.
The company said cost of sales, selling and marketing expenses all increased. At the same time, other income dropped.
Herfy operates its fast food restaurants as well as bakeries. It also has a meat processing business line. The company reported a 3.96% drop in net profit for 2019 to 196.09 million riyals ($52.29 million).
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