Consumer Finance Slide Hits Profits
E Extra, the electronics company, saw its profits decline by 27% in the third quarter of this year, reaching 105 million riyals compared to 143 million riyals during the same period last year. This decrease was driven by an 82.4% drop in consumer finance profits, due to increased impairments on financial assets amounting to 70.1 million riyals, as part of the company's cautious approach to credit risk management. This included additional provisions and annual updates to the models used for calculating credit losses. Meanwhile, the retail sector helped mitigate the overall profit decline, with net profit rising by 10.6% during the quarter, supported by improved profit margins and a 5.5% increase in revenues to 1.89 billion riyals, bolstered by the retail and consumer finance segments.
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