|Element List||Current Year||Previous Year||%Change|
|Gross Profit (Loss)||307||1,273||-75.883|
|Operational Profit (Loss)||-534||339||–|
|Net Profit (Loss) after Zakat and Tax||11||189||-94.179|
|Total Comprehensive Income||9||215||-95.813|
|Total Share Holders Equity (after Deducting Minority Equity)||5,877||5,836||0.702|
|Profit (Loss) per Share||0.06||0.62|
|All figures are in (Millions) Saudi Arabia, Riyals|
|The reason of the increase (decrease) in the net profit during the current year compared to the last year is||SEERA FOCUSES EFFORTS ON POST PANDEMIC READINESS AS GROUP REPORTS NET PROFIT DROP OF 90% TO SAR 18.2 MILLION FOR FY 2020
COVID-19 has had a major impact on the travel industry as a whole, however, Seera Group’s strong liquidity position in addition to several actions undertaken to mitigate the impact of the virus has helped the Group overcome challenges and has set Seera up to emerge stronger as the travel sector recovers.
The Group’s gross booking value (GBV) decreased by 64% for the year 2020 to SAR 3.9 billion vs. SAR 10.8 Billion FY 2019. The drop is solely explained by precautionary measures and restrictive impact as a result of the COVID-19 outbreak that has directly affected the travel and tourism sector across all verticals.
Reverberations of the pandemic were felt across the Group, however, Seera has taken stringent measures to soften the financial impact as the Group pivoted strategies and positioned itself favorably for the rebound in travel over the coming years.
Seera’s Car Rental unit, Lumi, has surpassed expectations in 2020, as the unit’s GBV has grown 27% from SAR 343 million in 2019 to SAR 435 million in 2020, largely due to the cost-effective sale of its excess fleet and through multiple wins of large-scale lease contracts with corporate and government sectors, resulting in the delivery of more than 3000 new vehicles in 2020.
As a consumer driven business, Seera’s Almosafer and tajawal brands have been hit hard by the pandemic with GBV dropping from SAR 3.9 billion to SAR 1.2 billion, a 69% decrease relative to 2019. In 2020. Almosafer, the Group’s flagship consumer travel brand, refocused on domestic travel as a key booking driver in line with the Kingdom’s 2020 tourism agenda which put a primary emphasis on domestic leisure with success recorded as far as 50% growth for 10 top destinations within Saudi Arabia. The share of domestic bookings vs. international for the KSA POS has shifted from 31% in 2019 to 78% in 2020.
Despite the drop in overall bookings, the consumer travel business unit continued to invest for the future in technology, products and customer service, including the development of real-time COVID-19 health & safety platform, as well as further efforts into the development of a fully-fledged omni-channel offering.
While travel had halted for most corporate and government clients under the elaa Travel Management brand, resulting in a drop in GBV of about 50%, from SAR 2.9 billion in 2019 to SAR 1.45 billion in 2020, the government health travel sector had continued operating primarily due to its efforts in combating the virus.
Mawasim, Seera’s Hajj & Umrah business, posted SAR 14 million revenue for the year 2020 vs SAR 170 million in 2019. The drop is due to the temporary full closure of Hajj & Umrah visa services along with long-lasting restrictions on Umrah for citizens and residents.
Discover Saudi, Seera’s integrated DMC recorded a GBV of SAR 24 million, as the destination management company provided transport and accommodation services to the 2021 Dakkar Rally in KSA and the Winter at Tantora Festival in AlUla. As a close ally to the Ministry of Tourism, Discover Saudi has participated in various initiatives and campaigns run by the tourism authority. It has also developed and operated in-house adventure activities, nature trips and culture tours across the Kingdom in its efforts to grow its offerings of domestic activities within KSA.
Seera’s Hospitality unit yielded revenue of SAR 54 million representing a 64% drop from the previous year due to closure of commercial operation as a result of COVID-19.
The Group’s Corporate Ventures unit posted a GBV of SAR 738 million, a decline of 78% as compared to 2019, due to the impact of COVID-19.
GROUP REVENUE & NET PROFIT
Group Revenue declined by 59% in 2020 v’s 2019 driven by drop in GBV due to COVID – 19.
Net profit after zakat The company generated a net profit after zakat (before non-controlling interest) of SAR 11 million as compared to net profit after zakat(before non-controlling interest) of SAR 189 million during the previous year, primarily driven by profit recognized on Careem transaction amounting to SAR 1.573 billion, netted off with one off exceptional items.
Net profit after non controlling interest The company generated a net profit after non-controlling interest of SAR 18 million as compared to net profit of SAR 186 million during the previous year, primarily driven by profit recognized on Careem transaction amounting to SAR 1.573 billion, netted off with one off exceptional items.
Excluding the impact of below exceptional items, the company achieved normalized net loss of SAR 594 million for the year 2020 (2019: net profit of SAR 180 million) with a decrease of 430% in losses as compared to 2019.
Portion of gain recorded in current year on disposal of investment is SAR 1.573 billion (2019: NIL)
Impairment losses amounting to SAR 956 million (2019: SAR NIL)
Recognized foreign currency loss on impairment of goodwill amounting to SAR 13 million (2019: SAR NIL)
Gain on disposal of subsidiary during the current year SAR 8.2 million (2019: SAR 16.6 million)
Foreign currency gain/(loss) recognized on disposal of subsidiary during the current year SAR 478 (2019: SAR -11 million)
|Statement of the type of external auditor’s report||Unmodified opinion|
|Reclassification of Comparison Items||Certain comparative figures are reclassified to conform current year classification|
|Additional Information||COVID-19 assessment and impairment losses
The Group was affected significantly due to the impact of COVID-19, which resulted in a decrease in the Group’s primary activities. Consequently, the Group’s non-current assets’ value, mainly those described below, were adversely affected. The Group’s management considered reviewing all these non-current assets for any impairment indicators. Following a detailed assessment carried out by the Group’s management, it was concluded that the below assets triggered the impairment indicators. Accordingly, an impairment review was performed across all cash generating units ("CGUs") of the Group, including the fair valuation of investment properties and other owned properties of the Group. The analysis resulted in carrying amount of the below assets exceeding the estimated recoverable amount and hence an impairment has been recorded in these consolidated financial statements as disclosed below. Further details regarding the impairment of each class of asset has been disclosed in the relevant notes.
As a result of the impact assessment carried out by the management, the Covid-19 pandemic has significantly impacted the Group’s operations, hence the Group has impaired the following assets:
Impairment loss on property and equipment (note 7 of the financial statement)
Impairment loss on investment properties (note 11 of the financial statement)
Impairment loss on intangibles (note 10 of the financial statement)
Impairment loss on goodwill (note 10 of the financial statement)
Impairment loss on asset under construction and development (note 8 of the financial statement)
Impairment loss on equity-accounted investees (note 12 of the financial statement)
The Group will continue to evaluate the nature and extent of the impact on its business and financial results.
Disposal of Careem Investment
On 26 March 2019, Uber Technologies (Uber) signed an Assets Purchase Agreement (APA) with Careem Inc. (Careem) to acquire the net assets of Careem for USD 3.1 billion (equivalent up to SAR 11.6 billion) subject to modifications. Seera owned 15.3% shares in Careem Inc., a strategic investment that was initially made in 2014 and was fully backed by Seera Group’s overall transformation agenda to diversify and support technology advancements in the region. The Group classified its investment in Careem as non-current assets held for sale in the last annual consolidated financial statements.
The Careem acquisition was completed on 2 January 2020 ("Minimum Payment Date" as per APA) after obtaining the approval from most of the regulatory authorities in the relevant countries. As per APA, Uber held back 25% of the total consideration amounting to SAR 483 million, until all regulatory and legal requirements have been completed. The Group recognized a gain of SAR 1,563 million, excluding an amount of SAR 241 million, which represents 50% of the holdback amount as described above. The Group assessed the recoverability of the remaining receivable amount related to holdbacks based on the information it obtained related to the progress of regulatory, tax and indemnity issues for the closure of the sale transaction. Subsequent to the initial recognition of the above gain, Uber paid an additional amount of SAR 9.2 million related to the adjustment of its share price by SAR 1.05 per share at the time of the above acquisition.
The Group will be recording additional income (upto SAR 241 million) in future periods, after the completion of the entire regulatory processes, subject to regulatory and indemnity holdbacks deductions (if any).
Please refer to note number 39 of the financial statement.
1 The revenue for the current year is SAR 905 million as compared to SAR 2,190 million during the previous year showing a decrease of 59%.
2 The gross profit for the current year is SAR 307 million as compared to SAR 1,273 million during the previous year with a decrease of 76%.
3 The operating loss for the current year is SAR 534 million as compared to operating profit of SAR 339 million for the previous year with a decline of 257%.
4 The net profit after zakat and tax before non controlling interest for the current year is SAR 11 million as compared to SAR 189 million for the previous year showing a decrease of 94%.
The net profit after non controlling interest for the current year is SAR 18 million as compared to SAR 186 million for the previous year with a decrease of 90%.
5 The total comprehensive income for the current year before non controlling interest is SAR 9 million as compared to total comprehensive income of SAR 215 million for the previous year decreased by 96%. The total comprehensive income after non controlling interest for the current year is SAR 17 million as compared to total comprehensive income of SAR 212 million for the previous year showing a decrease of 92%.
6 Earnings per share for the current year is SR 0.06 as compared to earnings per share of SR 0.62 for the previous year.
7 The shareholders equity (without non controlling interest) as at the end of the current year is SAR 5,877 million as compared to SAR 5,836 million in the previous year (without minority interest) increased by 0.7%.