Middle East quick service restaurant operator Americana reports US$226M profit in first nine months
DUBAI – Americana, the Middle East’s largest restaurant operator and the operator of popular franchises such as KFC, Pizza Hut, and Hardee’s, has announced robust financial results for the first nine months of 2023.
The company reported a 7.1% increase in revenues, totalling US$1.89 billion for the period from January to September.
This strong performance led to a net profit of US$226.7 million, representing a 15.8% increase from the US$195.8 million recorded during the same period in the previous year.
Americana which is dually listed on the Abu Dhabi Securities Exchange (ADX) and the Saudi Tadawul, operates a vast network of restaurants across the Middle East.
According to the company’s financial report, Americana’s solid financial performance positions it well to cover short-term capital expenditure (capex) requirements and continue its dividend policy.
As of September, Americana’s adjusted free cash flow stood at US$195 million, with a cash conversion ratio of 66.3 per cent.
The company revealed its ambitious expansion plans, aiming to add 250-260 net new restaurants during 2023, with a particular focus on the Saudi Arabian market.
Additionally, Americana reported that it is working on expanding profit margins through improved operational efficiencies and normalized commodity prices.
While acknowledging the potential impact of recent geopolitical developments on short-term performance, the company maintains a positive outlook for the general business environment and anticipates favourable long-term performance.
Americana Restaurants, which went public in 2022, operates 2,338 restaurants as of September 2023.
The company benefited from a decrease in food staple prices during the recent quarter, which led to lower commodity inflation.
This, coupled with the company’s focus on operational efficiencies, contributed to its growth.
The revenue growth for the first nine months of 2023 was further boosted by continuing like-for-like sales gains and the addition of new restaurant locations across the Middle East, North Africa, and Kazakhstan.
Market sources confirmed increased spending across F&B outlets in the UAE and the Gulf region since the start of the year.
However, some factors pulled back net profit growth, including the negative impact of accounting for hyperinflation in its Lebanon business operations and currency devaluation in Egypt, resulting in an approximate US$10 million decline compared to the same period last year.
Nevertheless, overall net profit was driven by business growth and improved operational efficiency, with no significant one-off charges such as a tax claim charge in Egypt, which amounted to US$24.9 million during the same period in 2022.
