Tamkeen Human Resources, a leading human resources services company in Saudi Arabia, announced strong financial results for the fiscal year ending December 31, 2023. The company’s net profit recorded a remarkable growth of 11.2%, reaching SAR 95.1 million, compared to SAR 85.5 million in 2022, reflecting the company’s strong operational performance and its ability to adapt to growing market demands.
According to the official statement published on the Saudi Stock Exchange (Tadawul), this increase in net profit is primarily attributed to the significant growth in the group's revenues, which jumped by 40.5% compared to the previous year. This revenue growth was reflected positively in gross profit, which rose by 33.8%. This increase in gross profit is due to the outstanding performance of the company's two main business segments, with gross profit in the corporate segment growing by 34.6%, while the retail segment recorded growth of 30%.
Economic context and Vision 2030
This outstanding performance by Tamkeen comes amidst the major economic transformations underway in Saudi Arabia as part of Vision 2030. The Vision aims to diversify income sources, empower the private sector, and develop the labor market, creating a fertile environment for the growth of specialized service companies like Tamkeen. As companies increasingly focus on their core operations, the demand for human resources outsourcing services is rising, a trend that Tamkeen directly leverages to strengthen its market share and expand its client base.
Details of operational performance and investment in personnel
Despite a 24.1% increase in administrative, general, and marketing expenses, the company achieved a 33.3% growth in operating profit. The company explained that the increased expenses were primarily due to its strategy of investing in human capital through higher salaries, benefits, commissions, and bonuses for employees, with the aim of attracting and retaining talent to support future expansion plans. The company also made provisions to mitigate the impact of withholding tax.
As part of managing financial risks, the provision for expected credit losses increased by SAR 7.9 million, in line with the growth in trade receivables resulting from the increase in the company’s revenues, and based on a model prepared by a specialized external consultant.
Impact of non-recurring items
Other non-operating income decreased by SAR 10.4 million, primarily due to the non-recurrence of an exceptional gain recorded in 2022 from the sale of a company-owned plot of land in the Al-Narjis district of Riyadh, which generated a capital gain of SAR 9.6 million. Excluding this one-off gain from the 2022 results, net profit attributable to shareholders increased by a higher percentage of 25.2%, confirming the strong growth in the company's core operating activities.
Distribution of cash dividends to shareholders
To bolster investor confidence, the company's board of directors has decided to distribute cash dividends to shareholders for the second half of 2023, totaling SAR 30.47 million. The dividends will be distributed across 26.5 million eligible shares, at a rate of SAR 1.15 per share, representing 11.5% of the share's par value. The entitlement date for shareholders of record at the close of trading on February 19, 2024, will be March 9, 2024, with the actual distribution commencing on that date.
