Elm (7203) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 grew 26.5% year-over-year to SAR 3,406 million, driven by strong Digital Business and BPO expansion.

• Net profit increased 19.6% year-over-year to SAR 831 million, with EPS rising to SAR 10.70.

• Government products growth was supported by a 10-year agreement with SDAIA, ensuring business sustainability.

• Leadership transitioned to Mr. Mohammad Alomair as CEO.

• Interim financial statements received an unqualified review from the independent auditor.

Financial highlights

• Gross profit for H1 2024 was SAR 1,361 million, with a gross margin of 40.0%.

• EBIT/operating profit reached SAR 798 million, up 14.4% year-over-year; operating margin was 23.4%.

• Cash and short-term investments grew by 14%, reaching SAR 3.9 billion.

• Total assets as of June 30, 2024, stood at SAR 9,271 million, with equity of SAR 4,546 million.

• Cash and cash equivalents increased to SAR 2,392 million.

Outlook and guidance

• Full-year 2024 revenue growth guidance raised to 22%-24%.

• EBIT margin guidance remains at 22%-24%.

• No new or amended IFRS standards are expected to materially impact future results.

• No significant subsequent events after June 30, 2024, that would affect the financial position.

• Management expresses confidence in continued growth and market leadership, citing ongoing digital transformation.