ELEMENT LIST

CURRENT QUARTER

SIMILAR QUARTER FOR PREVIOUS YEAR

% CHANGE

PREVIOUS QUARTER

% CHANGE

Sales/Revenue

2,037.9

2,251.2

-9.474

2,373.9

-14.153

Gross Profit (Loss)

334.5

389.1

-14.032

303.7

10.141

Operational Profit (Loss)

274.9

329.3

-16.519

227

21.101

Net Profit (Loss) after Zakat and Tax

255.2

305

-16.327

208.4

22.456

Total Comprehensive Income

256.4

306.6

-16.373

206

24.466

All figures are in (Millions) Saudi Arabia, Riyals

ELEMENT LIST

CURRENT PERIOD

SIMILAR PERIOD FOR PREVIOUS YEAR

% CHANGE

Sales/Revenue

6,752

6,030.5

11.964

Gross Profit (Loss)

965.7

925.2

4.377

Operational Profit (Loss)

774.2

773.8

0.051

Net Profit (Loss) after Zakat and Tax

715.3

707.8

1.059

Total Comprehensive Income

715.3

713.5

0.252

Total Share Holders Equity (after Deducting Minority Equity)

1,688.4

1,668.5

1.192

Profit (Loss) per Share

5.96

5.9

-

All figures are in (Millions) Saudi Arabia, Riyals

ELEMENT LIST

EXPLAINATION

Increase (Decrease) in Net Profit for Current Quarter Compared to the Same Quarter of the Previous Year is Attributed to

Reasons for decrease:
The decrease in sales of several retail sections-particularly school and office supplies and smartphones in addition to the decrease in most wholesale sections.
- Retail sales of school and office supplies as well as wholesale sections were all negatively affected by the precautionary measure taken by the competent authorities to shift the traditional education format to remote learning to control the spread of coronavirus pandemic.
- Sales generally were also affected by the implementation of VAT rate increase from 5% to 15% which began with the start of the current quarter.
- Delayed launch of the new iPhone also contributed to decreased smartphone sales compared to the same quarter of the last year.
- The negative impact on the back to school season resulted in an unfavorable sales mix which contributed to a relative decline in gross profit margins partially explaining the percentage of decline in net profit being more than the percentage of decline in sales.

Increase (Decrease) in Net Profit for Current Quarter Compared to the Previous Quarter is Attributed to

Despite the decrease in sales of 14.2% in the current quarter compared to the previous quarter, but there is an increase in the net profit of 22.5% due to:
- Decrease in general and administrative expenses, which in the previous quarter included the company’s contribution to the Ministry of Health’s Health Endowment Fund for an amount of 20 million riyals.br> - The relative improvement in gross profit margins as a result of the change in the selling mix in favor of the relatively high profitable sections compared to the previous quarter.
- The profit margin has improved as a result of discounts obtained from suppliers.

Increase (Decrease) in Net Profit for Current Period Compared to the Similar Period of the Previous Year is Attributed to

Despite the increase in sales of 12% in the current period compared to the similar period of the last year, which is due to the rise in some retail sections especially the computers and the smartphone sections, the increase in net profit was limited to only 1.1% due to:
- The relative decline in gross profit margin due to the significant negative impact on the back to school season owing to the precautionary measure taken by the competent authorities to shift the traditional education format to the remote learning to control the spread of coronavirus pandemic, resulting in an unfavorable sales mix involving less proportion of relatively high profitable sections.
- The increase in general and administrative expenses, which included during the current period the company’s contribution to the Ministry of Health’s Health Endowment Fund for an amount of 20 million Riyals and the company's contribution to support Atta Digital campaign sponsored by the Ministry of Communications and Information Technology for around 5 million Riyals.

Basis of the External Auditor's Opinion

Unmodified opinion

Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor Opinion

None

Reclassification of Comparison Items

None

Additional Information

- Difference between comprehensive income and net income for the current quarter is attributed to foreign exchange gain resulting from the subsidiary in Egypt due to changes in exchange rate of EGP against SAR.
- Three new showrooms were opened during the period on 10/1/2020, 27/7/2020 and 16/9/2020.