الرئيس التنفيذي للشركة المتحدة للمواصلات "بدجت السعودية" لـ CNBC عربية:  نسبة النمو في عقود التأجير قصيرة الأجل ارتفعت 27% خلال الربع الأول 2024 - video Dailymotion

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Watch الرئيس التنفيذي للشركة المتحدة للمواصلات "بدجت السعودية" لـ CNBC عربية:  نسبة النمو في عقود التأجير قصيرة الأجل ارتفعت 27% خلال الربع الأول 2024 - CNBCArabia on Dailymotion

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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.

الرئيس التنفيذي للشركة المتحدة للمواصلات "بدجت السعودية" لـ CNBC عربية: نسبة النمو في عقود التأجير قصيرة الأجل ارتفعت 27% خلال الربع الأول 2024

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