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00:00The short-term rental has increased by 27% compared to the quarter of last year.
00:20This is a great increase, which means that growth in the short-term rental is excellent.
00:26Likewise, the long-term rental has increased our revenue by 18%.
00:35What happened is that the profits did not increase, especially the interest.
00:41There are many things, including, as we mentioned in our announcement,
00:47that the cost of financing is increasing as a result of our growth in our business.
00:54We also have the sale of cars.
00:57We notice that the margin for the sale of cars is being corrected
01:04or there is a correction of the high numbers of the previous year.
01:10Likewise, our mix of cars, or the number of cars we sold and the brands,
01:18we started to sell the cars that we bought during the period of not having a large supply
01:27of the brands that we bought.
01:29We bought Chinese cars.
01:31The Chinese are new in the Kingdom and they need some time to prove their ability and efficiency.
01:40The market is dealing with them with a high resale value.
01:45There is no doubt that the Chinese cars in the Saudi market have started to sell well,
01:50but the resale value has not yet proven its strength.
01:54The sales we sold in this quarter had a large mix of Chinese cars,
02:00which is why the profit margin was low.
02:03In addition, we have an increase in the GNA, the General and Admin Cost,
02:10and other things.
02:11We have a change in the cost of some of our cars, from private to public transport.
02:18Some things have affected the margin and the profit,
02:22but I am sure that our main business has an increase in sales in the short-term and long-term,
02:31with excellent numbers, as you pointed out,
02:33and its results will be better in the future, God willing.
02:37Let me clarify.
02:38Let's go back to the issue of Chinese cars.
02:40Does this mean that the margin will be low?
02:44I'm sure the contributor will ask now.
02:46Will the margin of sales of Chinese cars continue until the end of 2024,
02:51at the same interest rate?
02:53Mr. Fawaz?
02:54I can't expect the margin to improve.
02:58It may continue at the same interest rate,
03:01but we are not selling all the Chinese cars.
03:04We have a limited number of Chinese cars,
03:09so it depends on which quarter we will sell the mix of Chinese cars,
03:13and we hope that it will continue well.
03:16But in general, all cars, when they are resold,
03:20there will be a correction in the market,
03:23because all car rental companies in the world
03:27benefited from the short of supply,
03:29because the margin of selling cars was high.
03:32Now we get the numbers that are supposed to be normal.
03:36From now until the end of 2024,
03:38there will be a correction, I think.
03:41Marginal.
03:42If Chinese cars continue as they are,
03:45we will still have a correction.
03:48I don't think it will increase,
03:50but the percentage is not high.
03:52And the replacement we usually have
03:55is that we buy cars of the types that we usually deal with,
04:00especially from other brands,
04:03many of which are Korean or Japanese.
04:06Therefore, we will buy replacement cars,
04:09so that we can benefit in the future in reselling.
04:12I think the impact will not be great,
04:14but yes, the correction will continue.
04:16But this is interesting, Mr. Fawad.
04:18Does this mean that there is an acceptance today
04:21in the Chinese car market for the Chinese product
04:24that was not previously required?
04:28Of course.
04:29You are right, Ms. Maysa.
04:31I think there is a lot of acceptance in retail,
04:35in individuals,
04:36because the Chinese product
04:38assumes that it is the cheapest product in the market.
04:41Individuals and sales to individuals increase,
04:46and I see that there is a double digit growth
04:49in the Chinese product sold in Saudi Arabia.
04:52It will take time to establish
04:55what can I say?
04:57People's trust in the purchase of Chinese cars.
05:01There is no doubt.
05:03Ten or eleven years ago,
05:05the Korean product entered the market
05:07and there was no great trust.
05:09Today, the Korean product competes with the Japanese
05:12and the rest of the European brands.
05:14China wants a little better.
05:16Sales of Chinese products are strong in individuals.
05:19For us, in our business,
05:23cars are not a luxury.
05:25We have to consider many factors.
05:27We have to consider the cost of buying them.
05:30Cars have been rented between 18 and 36 months.
05:33Most companies rely on the product
05:35that is guaranteed to be resold.
05:37This means that our movement
05:39to buy Chinese products in the future
05:41will be less than what we used to buy
05:43in the past two years
05:46that was short of supply for other brands.
05:48I have a second point.
05:50also affected the non-growth of profits in a greater way.
05:53How much has the cost of financing increased today,
05:56and is there a way today to manage the risks of the cost of financing
06:00in an environment that is high in interest, Mr. Fawazi?
06:04I mean, is there a greater transformation today by the company
06:07as a result of the increase in interest rates
06:10due to the continuation of the growth processes you have?
06:14That's right.
06:15The cost of revenue has indeed increased for us,
06:18but if we pay attention, Ms. Maysa,
06:22the debt-to-equity ratio for us
06:27does not exceed 0.35%.
06:30Whereas, if we notice, most of the competitors in the market
06:35have a debt-to-equity ratio of more than 1 to 1.
06:39So, the Saudi budget
06:43maintains that the debt is very simple,
06:48and it has a chance to grow in a greater way
06:51by increasing the debt.
06:53The cost is calculated.
06:55Therefore, our growth depends on lending
06:59from banks to the future
07:01in order to grow our business,
07:03in addition to using the remaining cash
07:07after distributing our profits.
07:10If we notice that this year,
07:12we distributed our profits
07:14at least a little less than in 2024,
07:18in order to use the remaining cash to grow.
07:22I believe that we still have an excellent control
07:26over our debt.
07:28Therefore, the cost of debt in the future
07:33is calculated. We all expect that by the end of 2024,
07:37the interest rate
07:42will either increase or decrease, but it is rare that it increases.
07:46Based on that, we will see how we will be able to move forward.
07:50In 2025, we expect it to decrease,
07:53and if our growth continues at the same interest rate,
07:58we will see that our situation is very strong,
08:02and our debt-to-equity ratio
08:05will increase, and we will be able to grow
08:07and control this cost.
08:10It is true that it will affect the margin,
08:12but our margin is very healthy.
08:15If it is affected in a simple way,
08:18instead of growing in a larger way,
08:20there is no problem.
08:21I do not see that we have real risks
08:24in the issue of financing
08:26for the near and medium future.
08:28Excellent. Now, the contributor is waiting for the most important deal
08:31that we are expecting for the budget,
08:33which is the acquisition of the world of cars
08:34by issuing 7 million shares.
08:36What will happen after this deal?
08:38How will we see the company's direction?
08:40Will the strategy change significantly
08:43after this acquisition?
08:45What do we expect in general
08:47from the benefits of this deal and acquisitions?
08:51That's right.
08:52First of all,
08:54God willing,
08:55if the whole deal is completed,
08:57we are now at the end of the procedures,
09:01and the agreements that must be issued
09:04by the parties
09:07that are specialized in issuing agreements
09:10will go to the general assembly
09:12to be approved.
09:14If the deal is completed,
09:16there will be
09:18great benefits,
09:20as we see it now,
09:21in the synergy between the two companies.
09:24This deal is for a company
09:26that works in long-term leasing.
09:29It will increase our market share.
09:31There will be many benefits
09:33in the synergy
09:35between the two companies.
09:37I think the increase in
09:40efficiency
09:43between the two companies will be greater.
09:45There are many things
09:48related to the benefits
09:50that result from
09:52the acquisition of a similar company.
09:56We know that it leads
09:58to better efficiency and better profits.
10:02What's next?
10:03Our company
10:05is focused on
10:07growing
10:09and continuing to grow
10:11in the Saudi Arabian market,
10:14which is a very promising market
10:16for transportation business in general,
10:20especially for short-term and long-term cars.
10:24The economy is very strong.
10:26The Saudi government
10:28is very keen on
10:30transforming tourism
10:32into a source of income.
10:34These are all related
10:36to our activities in the Saudi budget.
10:39We want to continue to grow.
10:42There is no limit to our growth.
10:45Depending on our future,
10:49we believe in our economy
10:51and in the demand that will increase
10:54in our business, and therefore, we don't know, after we take this company, if God wills,
11:01we arrange our affairs, we achieve the goals of this acquisition,
11:07then after that, we move to a new development, God willing.
11:10And how big will this acquisition be? This is very important,
11:13I mean, comparing this to the current acquisition.
11:16Yes, after the acquisition, according to the numbers we have now,
11:21if the acquisition is completed, God willing, the fleet will have more than 50,000 cars.
11:2850,000 cars, compared to, may God have mercy on you, this is a good event, Mr. Fawad.
11:35God willing.
11:35This is a good event, God willing.
11:38Compared to how big is the fleet now? How big is the fleet?
11:43The fleet for the Saudi budget by the end of 2023 is more than 36,000 cars.
11:50And I say, after the acquisition, there will be more than 50,000 cars.
11:54Yes.
11:54So, by that time, God willing, we will announce the number,
11:57and therefore, it will be, I hope, Ms. Maisa, it will be a success story
12:03in the car rental company in the Middle East region, and even more than the Middle East.
12:10These numbers were not achieved in history, nor were they even in dreams.
12:16We dream and realize our dream with our economy in the Kingdom of Saudi Arabia,
12:22which supports us, thank God.
12:24I wish you all the best, Mr. Fawad Danesh,
12:27and you are the CEO of the Saudi budget company.
12:30You were with us. Thank you very much.