Americana Restaurants posts 19.4% net profit for H1 2023

Americana Restaurants announced its financial results for the year’s first half ending June 30. The company reported revenues of $1.24bn and adjusted EBITDA of $291.7m for the first half of 2023. Its net profit increased by 19.4 per cent to $144.8m in H1 2023.

Americana, the largest out-of-home dining and quick service restaurant operator in the MENA region said it delivered a 7.8 per cent growth compared to the same period in 2022. This has been supported by significant restaurant portfolio expansion, increased like-for-like sales, and operating efficiencies, said the company in its Q2 earnings report.

Americana’s robust revenue growth

The restaurant operator posted a 13.5 per cent growth in revenue, which it said was supported by the positive impact of fewer Ramadan days. Net profit for Q2 2023 was $86.6m, an increase of 16.7 per cent after adjusting for a one-off tax payment of $25.5m to settle an indirect legacy tax charge in Egypt, as per the quarterly earnings report.

It said its robust year-on-year revenue growth was underpinned by its continued expansion of restaurant portfolios across its operations in the Middle East, North Africa, and Kazakhstan. The company said it successfully opened 108 gross new stores during the first half of 2023, bringing its total restaurant count to 2,277 stores. Additionally, 84 stores were under construction at the time of reporting. Americana said the restaurants under construction are part of its strategic target of achieving 250-260 net new stores during 2023.

It added that its like-for-like revenue increased 7.2 per cent compared to the same period last year due to the healthy performance of KFC, and Pizza Hut brands.

Managing cashflow

Americana said it had maintained a healthy balance sheet and a strong overall financial position. With adjusted free cash flow for H1 2023 of $110.9m and a cash conversion ratio of 58.4 per cent, Americana Restaurants is well-positioned to meet its future growth and capital expenditure commitments together with supporting its dividend policy.

Americana’s outlook for 2023

Americana Restaurants said it is well-equipped to pursue growth across the markets it operates in. By the end of the year, the company expects to have added 250-260 net new restaurants, focusing on growth opportunities across its operations with a particular focus on Saudi Arabia.

The company said it 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. The Company remains committed to expanding its digital offering and optimising off-premises revenue channels.

During the second half of the year, Americana Restaurants said it will continue to phase out existing inventory, which was strategically built up during 2022 to counteract global supply disruptions, supported by cool-off in key commodities as it looks to expand profit margins.

In Egypt, Americana Restaurants remains focused on optimising operations, enhancing franchisor support, and driving further cost efficiencies as it proactively navigates currency-related challenges in the country.