Saudi startup Jahez delivers 85 percent increase in net profit

After zakat and tax, Jahez’s net profit was SR53.2 million ($14.15 million) for the first six months in 2022. In H1 2021, its net profit was SR28.7 million. Gross profit also soared 90 percent despite a 52.6 percent increase in the cost of revenue.

Increase in delivery fee (SR159.5 million) and commission revenue (SR 81.8 million) led to a 59.9 percent surge in revenue on a year-on-year (YoY) basis.

Earlier this year, Jahez became the first Saudi tech startup to be listed on a public exchange. At the time of listing, its market capitalisation was $2.4 billion.

The higher revenue was driven by a 36.5 percent YoY rise in gross merchandize value (GMV) to SR2 billion. This was due to the increase in orders number in the first half 2022. As many as 31.5 million orders were placed, up 45.5 percent compared to 21.6 million orders last year.

Operating profit was up significantly by 91.2 percent YoY basis and earnings before interest, tax, depreciation and amortisation grew almost 100 per cent to SR66.1 million from SR34.1 million.

The jump in operating profit was despite the increase in Research & Development expenses by 226.4 percent in line with the company strategy to invest in the platform’s development and user-experience improvement.

The average user number in the first half 2022 increased by 48.1 percent. However, as the pandemic restrictions lifted, it led to a slight decrease in monthly average orders per user (down 4.5 orders in the H1 2022, compared to 4.6 orders last year).

The GMV per order also decreased slightly, reaching SR63.2 compared to SR67.4 in H1 last year.

The merchant number reached 7,879 restaurants this year. It was 4,742 in the corresponding period of last year.

The 243.7 percent increase in general & administrative expenses reflects the increase in headcount in line with the growth and geographical expansion as well as the expansion of the subsidiaries’ activities.