RIYADH: Car rental firm Budget Saudi, will expand its operations and enter into new investments in the logistics services sector this year 2022, President and Group CEO Fawaz Danish revealed.
Budget Saudi’s short and long term car rentals have significantly improved since early October 2021, Danish told Argaam, adding that he expects the month of Ramadan to lead to a higher demand for domestic rentals.
The company's net profit was hit by the sales of used cars in 2021, as it has a large number of unutilized cars, which were sold in the fourth quarter of 2020 when the company made an exceptional profit, Danish said.
Danish pointed out that the 2021 dividend payout at SR 1.9 ($0.51) per share was “solid”, implying the company has a robust balance sheet and strong cash flows, as there is no debt.
Car rental companies were hit hard by the collapse of global travel that accompanied the pandemic in 2020.
The board of directors partially retained cash liquidity for new expansions, after the resumption of Umrah and Hajj season 2022, he said.
The governmental and quasi-governmental entities depend on car rentals rather than purchases under long-term contracts of up to four years, and short-term contracts for car rentals at airports and within cities, according to Budget Saudi CEO.
Government contracts are a decimal part of the company’s business, which witnessed accelerated growth, he explained.
Budget Saudi’s market share was steady at 25 percent. The company reported a net profit after Zakat and tax of SR 219.9 million for 2021, a rise of 9 percent from the previous year.
