Americana's second-quarter profit surges to $86.6 million on strong revenue growth

Company's revenue increased nearly 14% in the three-month period

Americana, founded in Kuwait in 1964, introduced fast-food restaurants in the region in 1970. Photo: Americana

Americana, the largest quick-service restaurant operator in the Mena region, reported a 76 per cent annual increase in second-quarter profit, on revenue boost, as the company continues to expand its restaurant portfolio.

Net profit attributable to the shareholders of the parent company for the three months to the end of June reached $86.6 million, the company said late on Wednesday in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

Second-quarter revenue rose nearly 14 per cent year-on-year to $652 million, supported by a “positive impact from fewer number of Ramadan days”, Americana said.

Net profit for the first half of the year attributable to the shareholders of the parent company rose by 19.4 per cent on an annual basis to $144.8 million, while revenue increased 8 per cent to $1.24 billion during the period.

“Americana Restaurants’ robust year-on-year revenue growth was underpinned by a continued commitment to expanding its diverse restaurant store portfolio across its operations in the Middle East, North Africa and Kazakhstan,” the company said.

The company opened 108 new stores during the first half of 2023, bringing its total restaurant count to 2,277 stores as of the end of June, it added.

The company, which is the franchisee of Pizza Hut and KFC in the Middle East, raised $1.8 billion from its initial public offering in November last year. It has a dual listing on Saudi Arabia's main Tadawul market and the ADX, the Arab world's two largest stock markets.

Americana's IPO was the largest in Saudi Arabia last year. It was also the first company to be dually listed in the kingdom and the UAE.

The company sold more than 2.52 billion shares, or 30 per cent stake of its issued share capital, with the IPO drawing strong demand from institutional and retail investors that generated $105 billion worth of orders.

It started trading in December. Saudi Arabia's sovereign wealth fund, the Public Investment Fund, and Mohamed Alabbar, founder and managing director of Dubai's Emaar Properties, bought a 30 per cent stake in the company's issued share capital.

Americana, founded in Kuwait in 1964, introduced fast-food restaurants in the region in 1970. It was previously traded on the Kuwait Stock Exchange but delisted its shares in 2017.

It is the largest out-of-home dining operator in 12 countries across the Mena region and Kazakhstan and operates food chains such as the recently signed Peet’s Coffee. Other brands include Costa Coffee, Hardees, Baskin Robbins, Krispy Kreme, Wimpy and TGI Fridays.

Americana's top-line gains in the first six months of the year were also driven by positive momentum in like-for-like sales, which measures revenue growth for restaurants that have been operational for 12 months.

Like-for-like revenue increased 7.2 per cent over the first half of 2022, enabled by the healthy performance of KFC and Pizza Hut, in particular, Americana said.

Over the past 12 months, Americana business added 262 gross new stores in the region.

The company, which has 84 stores under construction as of June 30, 2023, expects to add 250-260 net new restaurants by the end of the year, with particular focus on Saudi Arabia, it said.

Americana is also “in a strong position” to continue scaling its new brands, including further expansion of Pizza Hut and Peet’s Coffee in Saudi Arabia, it added.

During the second half of the year, Americana said it would continue to phase out existing inventory, which was strategically built up during 2022 to counteract global supply disruptions.

Americana in June said that it has been added to the MSCI UAE Index. The index is considered an important benchmark for investment decision-making by investors in emerging markets including the Middle East. It is designed to measure the performance of large and mid-cap segments of the UAE equity market.