KSA travel sector set for recovery as Saudis prepare for holidays

KSA travel sector set for recovery as Saudis prepare for holidays
The Saudi Interior Ministry recently announced that vaccinated Saudis and those who have recovered from COVID-19 would be allowed to travel abroad as of 1 a.m. from May 17. (File)
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Updated 10 May 2021

KSA travel sector set for recovery as Saudis prepare for holidays

KSA travel sector set for recovery as Saudis prepare for holidays
  • 80 percent of those surveyed plan to go abroad within 6 months of borders reopening

JEDDAH: Saudis are as eager as ever to explore other countries, with a survey by travel operator Almosafer finding that 80 percent are planning  to go abroad within six months of the borders reopening on May 17.

Speaking to Arab News in mid-April, Capt. Ibrahim Al-Koshy, CEO of Saudia, the Kingdom’s state-owned flag carrier, said initial bookings were healthy but “people are still a bit cautious about long-distance traveling.”

This was supported by Muzzammil Ahussain, executive vice president of the consumer travel business unit at Seera Group, the parent company of Almosafer, who found that initial interest among travelers was for locations predominantly within the Middle East and North Africa, especially nearby countries like Bahrain, Dubai, Qatar, and Egypt, as well as new locations like Bosnia, Georgia, the Maldives, and Morocco.

“This is what customers told us in Q1 in the survey, as the borders open soon, and this is exactly what we saw, there is a spike in the traditional countries that Saudis usually travel to in terms or searches and bookings,” Ahussain told Arab News.

Before the coronavirus disease (COVID-19) pandemic, European destinations like France, Italy and Switzerland were popular in the summer. “However, Europe now is not as safe as places like the Maldives,” Ahussain said. 




Muzzammil Ahussain, Executive VP, Seera Group

He added that Saudis have shifted their interest away from Turkey to alternative locations like Georgia and Bosnia.

Another recent trend Ahussain noticed is an increased preference for boutique hotels and alternative accommodation with a more personal touch.

Previously known as the Al-Tayyar Travel Group, Seera Group is the largest travel and tourism group in the MENA region. It was hit hard by the economic impact of the pandemic, with net profit down around 91 percent in 2020. While various subsidiaries of the company are recovering at different rates, Ahussain believed it would take time to get back to pre-pandemic levels. “Collectively, we are looking at a full recovery by 2023,” he said, while adding the general consumer travel division will “reach 50 to 60 percent of pre-pandemic levels this year.”

FASTFACTS

• Saudis are taking interest in visiting countries like Bahrain, Dubai, Qatar, and Egypt, as well as new locations like Bosnia, Georgia, the Maldives, and Morocco.

• Before the pandemic, European destinations like France, Italy and Switzerland were popular in the summer.

Seera Group invested in Dubai-headquartered ride-hailing app Careem in December 2014 and when the company was sold to international rival Uber it received a large cash injection when it exited in 2019. 

Ahussain said the Careem exit provided it with timely liquidity for the company’s balance sheet of around SR1.78 billion ($470 million). This helped it focus on Lumi, its homegrown car rental division.

Lumi was the key division for Seera in 2020, with its gross book value increasing by 27 percent year-on-year to SR434 million.

“Lumi, The group’s car rental unit is increasing, year-on-year, it is already above the pandemic numbers, it has not slowed down,” Ahussain said. “It increased its profit last year and it is expected to increase this year.”

Ahussain added that there are plans to expand Lumi’s digital offerings through rentals, used car sales, mobile workshops, and pick-up and drop-off services. The new platform is expected to be launched within two months. “We are heavily investing in the digital solution of Lumi,” he said.

The Saudi Interior Ministry recently announced that vaccinated Saudis and those who have recovered from COVID-19 would be allowed to travel abroad as of 1 a.m. from May 17.


Oil rallies as US crude stocks decline in tight market: Energy market wrap

Oil rallies as US crude stocks decline in tight market: Energy market wrap
Updated 6 sec ago

Oil rallies as US crude stocks decline in tight market: Energy market wrap

Oil rallies as US crude stocks decline in tight market: Energy market wrap

RIYADH: Oil prices rose on Wednesday after US crude inventories at the nation’s largest storage site hit their lowest level in three years and nationwide fuel stocks fell sharply, a signal of rising demand.

Brent crude futures settled at $85.82 a barrel, a gain of 0.9 percent or 74 cents and the highest since October 2018.

November US West Texas Intermediate crude, which expires on Wednesday, settled at $83.87, up 91 cents, or 1.1 percent. The more active WTI contract for December settled up 98 cents to $83.42 a barrel.

Crude prices have risen as supply has tightened, with the Organization of the Petroleum Exporting Countries maintaining a slow increase in supply rather than intervening to add more barrels to the market, and as US demand has ramped up.

Globally, refiners have been boosting output thanks to high margins, one that can only be restrained by maintenance. US refining capacity use dropped in the most recent week, but analysts noted that supply may continue to tighten if US refiners also pick up processing again.

Emissions cut

Anglo-Australian miner Rio Tinto announced a $7.5 billion plan to reduce carbon emissions by 50 percent by 2030 and forward its target of 2025 for a 15 percent reduction in emissions from 2018 levels.

LNG deals

China has agreed to three huge liquefied natural gas deals with US exporter Venture Global LNG.

According to documents posted on the US department of energy website, the agreements with China’s state oil giant Sinopec include two 20-year deals for a combined 4 million tons of LNG per year.

Germany’s oil imports

German crude oil import volumes fell 7.1 percent from January to August and related lockdowns hit the industry, official data showed on Wednesday.

Oil volumes in Jan-Aug fell to 51.9 million tons from 55.8 million in the same months of 2020, statistics from the BAFA foreign trade office showed.

Forecast 

Crude oil prices could reach $100 per barrel in the first or second quarter of next year as global inventories are at their lowest level, the Iraqi oil minister said.


Sipchem records highest profits in its history, shares skyrocket

Sipchem records highest profits in its history, shares skyrocket
Updated 20 October 2021

Sipchem records highest profits in its history, shares skyrocket

Sipchem records highest profits in its history, shares skyrocket
  • The company posted a net profit of SR1.029 billion for the third quarter of 2021.
  • It also achieved a net profit after zakat and tax of about SR1.24 billion in the first half of 2021.

RIYADH: Shares of Sahara International Petrochemical Co. “Sipchem” on Wednesday hit the highest level since debut on the Saudi stock market. Share of the petrochemical company closed at SR46.95 ($12.2). 

Nearly 15.4 million shares were traded during the market session. The company posted a net profit of SR1.029 billion for the third quarter of 2021, the highest profit since its establishment. 

In a statement, the company attributed the reason for the rise in shares price to high selling prices of all the company’s products, which it said contributed to the increase in profit margins despite pressures from the rise in the prices of raw materials such as butane, ethanol, ethylene and propane.

On a quarterly basis, the company’s profits rose by about 24 percent, compared to the profits of the previous quarter, which amounted to SR829.9 million.

The company also achieved a net profit after zakat and tax of about SR1.24 billion in the first half of 2021, compared to losses of about SR151.8 million in the same period of 2020.

Sipchem CEO Abdullah Al-Saadoon told CNBC Arabia that he expected demand for the company’s products to remain strong in the fourth quarter of the year and the first three months of 2022.

Sipchem’s strong marketing plan helped buoy its third quarter earnings, he said. 

The company has  strong presence in the European and Asian markets, through Sipchem Europe and Sipchem Asia. It markets more than 70 percent of its products to end consumers.

Al-Saadoon said the company seeks to reduce its debt since the beginning of the year. It reduced its leverage by almost 12 percent to reach 40 percent of capital, he added.

 

 


Oil prices, government spending see TASI hit highest level since 2006: Market Wrap

Oil prices, government spending see TASI hit highest level since 2006: Market Wrap
Updated 20 October 2021

Oil prices, government spending see TASI hit highest level since 2006: Market Wrap

Oil prices, government spending see TASI hit highest level since 2006: Market Wrap

RIYADH: The Tadawul All Share Index increased on Wednesday by 0.94 percent, or 111.2 points.

Oil prices and the announcement of $2 trillion in government spending contributed to the rise in stocks.

TASI liquidity today amounted to about SR7.2 billion, while 189.8 million shares were traded, in 313,000 deals. 

National Gypsum Co. (NGC) topped the list of companies trading above three month average at 344, followed by Sahara International Petrochemical Co. (Sepchem) at 295.

The petrochemical producer posted a net profit of SR1.029 billion for the third quarter of 2021, the highest profit since inception.

Saudi Arabia’s parallel stock market index, Nomu, gained 81.7 points, or 0.34 percent, closing at 24,449.96 points. 

The biggest risers today were, Al-Rajhi Bank which records the highest level since 2006 to close at SR141.2, up 1.6 percent, and SABIC shares by 2 percent at SR133.6.

Among other shares that rose were NCB by 0.6 percent, and Riyad Bank by 4.4 percent.


Saudi markets surge as M&A activity set to continue until mid-2022: General Authority for Competition

Saudi markets surge as M&A activity set to continue until mid-2022: General Authority for Competition
Updated 20 October 2021

Saudi markets surge as M&A activity set to continue until mid-2022: General Authority for Competition

Saudi markets surge as M&A activity set to continue until mid-2022: General Authority for Competition

RIYADH: The Saudi market saw mergers and acquisitions jump 68 percent to 237 applications in the first nine months of the year — led by the IT, healthcare and petrochemical sectors according to a Saudi expert.

The General Authority for Competition head of mergers and acquisitions Talal Alhogail said the year-on-year comparison shows that it has been an exceptional period for business as it recovers from the pandemic, reported Asharq.

He added he expects the high rate to continue into the middle of 2022.


IMF has most favorable outlook for the Saudi economy in 2021 compared to other organizations

IMF has most favorable outlook for the Saudi economy in 2021 compared to other organizations
Updated 20 October 2021

IMF has most favorable outlook for the Saudi economy in 2021 compared to other organizations

IMF has most favorable outlook for the Saudi economy in 2021 compared to other organizations

The International Monetary Fund expects the Saudi economy to grow by 2.8 percent in 2021 — higher than forecasts by other global and local institutions.

In its latest regional economic outlook, the international organization said that oil exporters such as Saudi Arabia are expected to expand their production after August 2021. 

In addition, strong vaccination campaigns and higher oil prices are projected to boost the non-oil sector of the Kingdom’s economy, prompting an expansion in economic activity.

The Saudi Ministry of Finance expects the Saudi economy to grow by 2.4 percent in 2021, in line with the World Bank's predictions. 

Capital Economics and OECD also had similar forecasts for 2021. 

Jadwa, on the other hand, had the lowest expected rise in output, predicting a 1.8 percent growth rate only despite raising it from the previous 1.3 percent forecast.

As for the 2022 outlook, Capital Economics had the most positive forecast for the Saudi economy, saying it would jump by 7.3 percent. 

The Ministry of Finance posted its projection for 2022 growth at 4.8 percent. The IMF and OECD had the same expectation as well.

Moreover, the World Bank prediction was a slightly higher 4.9 percent. Jadwa also had a similar forecast for Saudi growth at 5.1 percent.