Al Dawaa Medical Services Co. expects profit to grow at least 30% this year, its chief executive officer said, after the Saudi pharmacy chain set the price range of its initial public offering at the top end of a range.
“We have strong potential growth coming over the next three years as a result of the investments we have made” in infrastructure, Mohammed Al-Farraj said in an interview. “Al Dawaa will be doing not less than 30%-40% profit growth this year compared to 2021.”
The pharmacy retail chain joined a string of firms, including its larger rival Al Nahdi Medical Co., tapping the kingdom’s equity market as strong investor demand props up share sales. Al Dawaa is seeking as much as $500 Million from its IPO.
Saudi Arabian companies raised almost $9.3 billion from share offerings last year, making Riyadh the most active IPO market in the Middle East and Africa behind Israel, according to data compiled by Bloomberg.
The most recent IPO wave has already seen a digital security firm owned by the kingdom’s wealth fund draw about $57 billion in orders from institutional investors. Al Dawaa’s IPO attracted demand of more than $25 billion ahead of its retail offering.
The firm operates a network of pharmacies with over 800 outlets across 130 cities in Saudi Arabia. It posted a revenue of about 5 billion riyals ($1.3 billion) and profit of 246 million riyals in 2020 compared with 4 billion riyals and 233 million riyals year ago, respectively.
More from the CEO:
- Estimates Al Dawaa’s profit to rise by “not less than 15-20% a year” after 2022
- “Will continue paying dividends of around 50%-60% of profit on a continuous basis”
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