Al Tayyar Travel Group, the Middle East's leading technology-powered travel and tourism company, announced Saturday its financial results for the full year ended Dec. 31, 2018. Abdullah Aldawood, CEO at Al Tayyar Travel Group said: "2018, the first full year of implementing our corporate transformation, was a period of intense activity for Al Tayyar Travel Group. Our revamped portfolio, prudent cost management and continued focus on operational excellence has enabled us to steer the business away from a dependency on specific contracts and towards increased commercial sustainability. We were operationally profitable with a solid cash flow performance and, excluding the one-off non-cash loss from a non-core equity divestment, the net profit of the company would have been SAR 276 million. Considering the significant company-wide advances we are implementing, we are pleased with the results, which are evidence that we are on the right track. "Our core travel brand portfolio continued to deliver excellent results. Our consumer travel reached 1.8 million customers, 1 million of which were through our online platform, growing by 43% year-on-year. Our online gross booking value also grew by 44% surpassing our annual target of SAR 2 billion, and our recently launched Hajj & Umrah service has already registered commitments for 21,000 packages in 2019. This year we leveraged our technology and scale to deliver a unique, omni-channel travel and holiday solution for our online and retail consumer segment. We also integrated our operations into a scalable, flexible, user-friendly technology platform, which further strengthens our customer experience. As a testament to our efforts, Almosafer is now the number 1 online travel agency in Saudi Arabia "Looking ahead, we are committed to delivering on our transformation strategy and we anticipate making significant progress in 2019 with continued growth across all our business units, including travel, hospitality, car rental and corporate ventures. This will be complemented by an accelerated expansion of our core travel segments - consumer, government and corporate, and Hajj & Umrah - and an increasingly positive impact on our top and bottom line." The Company posted full year revenue of SR1,948 million, compared to SR2,107 million in 2017. Revenue has become more diversified, driven by the Company's strategic transformation efforts. Consumer travel, hospitality and car rental all posted higher year-on-year revenue, partially offsetting the significant decline in revenue from government accounts, stemming from the conclusion of the Ministry of Higher Education contract. The company›s online gross booking value through its online platform increased by 44% to SR2,004 million, compared to SR1,387 million in 2017. This segment enjoyed rapid growth in line with the Group›s strategy to focus on omni-channel travel solutions. Also, the Hospitality division recorded a strong year, with revenue up 33%, while revenue from Car Rental increased by 30%. Gross profit was SR1,425 million in 2018 as compared to SR1,603 million in 2017. Operating profit was SR613 million, down 24% from 2017. The reasons for the decline were the change in product mix and increased contribution from online sales and travel services in the United Kingdom, business lines, which have lower margins as compared to other segments of the Company. Additionally, the Company reported a reversal of impairment loss on trade receivables of SR70 million, chiefly from government accounts. The company's total operating expense in 2018 was SR1,418 million, representing a slight increase compared to 2017. Selling and marketing expenses increased by 12% to promote the Company's new activities. Net profit, excluding the non-cash loss on the divestment of the Thakher Investment and Real Estate Company of SR421 million, would have been SR276 million. Including the non-cash loss from the divestment, the company reported net loss, attributable to the parent company, of SR145 million in 2018, compared to a net profit of SR497 million in 2017. Other elements that weighed down on profit include, an impairment loss of SR129 million on goodwill, equity investments and other receivables and a provision recorded for Zakat of SR84 million, primarily to cover previous years' reassessment. Trade receivables were worth SR1.25 billion in 2018 down 28% from SAR 1.75 billion in 2017. All receivables from the Ministry of Higher Education were repaid. The Company's total operating expense in 2018 was SR776 million, representing an 8.2% decrease from 2017. Operating expenses as a percentage of revenue is 40%, which is below the international peer average. The online division met its gross bookings target of SR2 billion, a year-on-year increase of 44%, and the company is on track to reach SR3,750 million in gross bookings by 2020. The surge in gross bookings was powered by Almosafer, which doubled its gross bookings in 2018, and Tajawal, which continued its strong growth in the UAE. In September 2018, the company leveraged its supplier network to launch a promising new strategic business unit focused exclusively on Haj & Umrah pilgrims. This was carried out in part to provide travel solutions to pilgrims across its core markets, and the broader Muslim world, and to support the government's ambitions of growing this sector to 15 million Haj and Umrah visitors by 2020 and 30 million by 2030. At the end of 2018, the company had recorded commitments of 21,000 packages for 2019. The Hospitality segment made solid progress in 2018, recording 33% in annual revenue growth. By the end of 2017, the company had five operating hotels with 1,880 rooms, including the Sheraton Makkah and Movenpick Jeddah. In 2018, it announced the development of seven mid-market hotels in Jeddah, Riyadh and Taif, adding another 1,000 plus rooms to its portfolio. The company's car rental business also made solid progress in 2018. The business unit recorded revenue growth of 30% to reach SR170 million. It also doubled its fleet to 7,000 vehicles in 2018 and operates currently across 14 cities and all major airports across the Kingdom. The Company sold its stake in Thakher Investment & Real Estate Development for a total cash value of SR377.4 million. The company is reinvesting the proceeds into the business, as part of a broader capital allocation program. The company's investment unit continues to manage a portfolio of other ventures that carry significant upside potential. These investments include the leading MENA-based car-hailing app Careem. — SG
