Earnings Report /
Saudi Arabia

Seera Group: Q3 22 Results Analysis | First quarterly profit since FY 20

  • Revenues increased by 53.1% yoy (-0.7% qoq) to SAR565mn in Q3 22, but were lower than our estimates of SAR624mn.

  • In Q3 22, Seera’s GBVs increased significantly by 93%yoy (+8% qoq) to SAR2.7bn

  • Gross profit came-in at SAR250mn up 34.4% yoy (+14.8% qoq), in line with our estimates of SAR243mn

SNB Capital
10 November 2022
Published bySNB Capital

Seera returned to profit in Q3 22 with a net profit of SAR54mn in Q3 22 vs losses of SAR72mn and SAR68mn in Q3 21 and Q2 22 respectively. This compares to the SNB capital and consensus estimates of losses of SAR34mn and SAR30mn respectively. Seera recorded its first net profit post pandemic in Q3 22. Gross Booking Value (GBV) increased by 93% yoy to SAR2.7bn, with strong yoy growth across the segments driven by the increase in travel demand. Seera’s revenues increased by 53.1% yoy (-0.7% qoq) to SAR565mn, but were lower than our estimate of SAR624mn.

  • Revenues increased by 53.1% yoy (-0.7% qoq) to SAR565mn in Q3 22, but were lower than our estimates of SAR624mn.  The increase in revenue was due to the strong resurgence in demand for both inbound and outbound travel and domestic tourism.

  • In Q3 22, Seera’s GBVs increased significantly by 93%yoy (+8% qoq) to SAR2.7bn. The Consumer Travel business GBVs grew robustly by 167% yoy to SAR1.2bn, (second consecutive quarter of strong growth), driven by strong demand for travel. Almosafer, as well as Destination Management company Discover Saudi and Hajj & Umrah tour operator Mawasim’s GBV grew 100% to SAR 1.8 billion. Lumi’s car rental revenues were up 35% to SAR188mn. Hospitality unit’s GBVs grew by 350% yoy reaching SAR27mn, while corporate ventures GBV’s grew by 86% yoy reaching SAR601mn.

  • Gross profit came-in at SAR250mn up 34.4% yoy (+14.8% qoq), in line with our estimates of SAR243mn.  Gross margin came in at 44.2% higher than our estimates of 39.0% and 38.3% in Q2 22.

  • Operating profit came-in at SAR30mn vs our estimates of an operating loss of SAR14mn.This compares with an operating loss of SAR44mn and SAR61mn in Q2 22 and Q3 21, respectively. Opex stood at SAR220mn lower than SAR262mn in Q2 22 and our estimates of SAR258mn. Opex-to sales stood at 38.9%, lower than our estimates of 41.3% and 46.0% in Q2 22.

Outlook

Based on our last update, we are Neutral on Seera with a PT of SAR21.8. We believe that the recovery in travel without covid restrictions will have a positive impact on Seera’s operations and profitability in the near term. The long-term outlook for Seera is positive driven by the strong potential of the Saudi tourism sector. The stock trades at 2023f EV/EBITDA of 8.6x vs its peer group average of 10.6x.