Fitness Time gym operator records first loss in 2020

Fitness Time gym operator records first loss in 2020
The Leejam Sports Company, owner of Saudi gym chain Fitness Time, recorded a net loss for the first time in 2020. (File/@FitnessTimeSA)
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Updated 14 February 2021

Fitness Time gym operator records first loss in 2020

Fitness Time gym operator records first loss in 2020
  • Pandemic closed all gyms between March and June last year, resulting in a drop of more than 30% in yearly revenue
  • Revenues decreased on the back of lower subscriptions and a drop in income from personal training sessions

RIYADH: The Leejam Sports Company, owner of Saudi gym chain Fitness Time, reported a net loss after Zakat and tax of SR58.7 million ($15.65 million) for the fiscal year ended December 2020, the first time the company has recorded a loss.
The gym operator attributed the losses to a decrease in revenue of SR285.3 million, as sporting activity in the Kingdom was suspended last year between March and June, as a result of the novel coronavirus (COVID-19) pandemic.
In a statement to the Saudi Stock Exchange (Tadawul), the company said it was “the first time in its history” it had recorded a yearly loss. According published financial results, revenue for 2020 amounted to SR659.63 million, a year-on-year decline of 30.2 percent.
Revenues decreased on the back of lower subscriptions (down by SR264 million) and a drop in income from personal training sessions (down SR17 million). Costs decreased by SR53.9 million due to lower salaries and related benefits. Advertising and marketing expenses fell 15 percent to SR2.8 million.
Renowned for being the largest fitness company in the Kingdom with 138 gyms in operation, Leejam Sports reported a net profit of SR205.9 million in 2019. Leejam CEO Justin Musgrove called the effects of the pandemic “devastating.”
“We found ourselves with a big overhead, 3,000 employees, all our gyms and centers and our head offices, to keep those costs rolling over. Despite the inevitable pressure of incurring significant costs through the closed period, Leejam cash reserves were sufficient to carry us through,” Musgrove said in an interview with Arab News in December.
On Feb. 4, Leejam Sports temporarily closed all its centers in the Kingdom for a period of 10 days, as ordered by the government. On Sunday, Feb 14, it announced that the centers would remain closed for another 20 days.
“The company will continue, through various means of communication, to raise fitness and wellness awareness and encourage exercising from home. The company is in the process of evaluating the financial impact of the closure of its centers. Any further developments in this regard will be announced later,” it said in a bourse statement on Sunday.
For the time being, the Saudi Ministry of Interior has suspended all events and parties in the Kingdom, including weddings and corporate meetings, in banquet halls, independent wedding halls, and hotel ballrooms, for a period of 30 days.
Despite the setbacks, Musgrove said in December that the company was aiming to expand its gyms. “Ultimately, we’d like to get about 100 ladies’ gyms and 150 men’s gyms by 2025,” he said.