Saudi's Herfy plans 17 new fast food restaurants

Herfy Food Services Co, Saudi Arabia’s largest fast-food chain, plans to open 17 new restaurants this year, bringing the total number of branches in the kingdom to 173.

The company has recently opened three restaurants in Ras Tanura, Riyadh and Dammam, according to a company statement on the Saudi bourse website on Wednesday.

The company earlier this month began an initial public offering to raise $110.2 million.

Herfy was offering 8.1 million shares, equivalent to 30 percent of its capital, at $13.5 per share, its listing prospectus showed. Subscription closed on January 17.

Savola Group, the Middle East's biggest edible oil manufacturer and sugar refiner, said it would net a capital gain of $53.3 million from the offering which will show on its earnings for the first quarter of 2010.

Savola's stake in Herfy will drop to 47.6 percent after the IPO from 68 percent while that of Herfy's founder - Ahmad al Said - will fall to 20.3 percent from 29 percent, the prospectus showed.

Herfy was set up in 1981 with a capital of $399,978 and currently has a paid up capital of $71 million.

By mid June last year, Herfy had restaurants in Saudi Arabia, Bahrain, Egypt, Kuwait and the UAE.

It also owns 16 bakery production units as well as one meat processing plant.

Its net profit in 2008 rose to $24.34 million from $16.42 million a year earlier, while turnover increased to $124.39 million from $99.99 million in 2007.

During the first half of 2009, Herfy made a net profit of $14.69 million on sales of $67.88 million, up from respectively $11.70 million and $60.45 million during the year earlier period.