Membership and subscription revenues showed growth during Q3, reaching SAR 305 million.
• Leejam achieved record-breaking revenues and net profits in Q3 2023, with SAR 348 million and SAR 92 million, respectively.
Leejam Sports Company, the largest operator of fitness centers in the Middle East and North Africa, achieved record-breaking results in terms of revenue and net profits in Q3 2023, with SAR 348 million and SAR 92 million, respectively. This represents a year-on-year increase of 32% and 35%, compared to Q3 2022. These results follow the strong performance and record profits Leejam reported in the first half of the year, where the exceptional performance in Q3 contributed to the results for the first nine months of 2023, reaching SAR 927 million in revenue, an increase of 27%, and SAR 227 million in net profit, a rise of 51% compared to the same period in 2022, reaching a total of 448,000 by the end of September 2023, marking the highest figures ever recorded for both the male and female sectors.
In this context, Mr. Adnan Al-Khalaf, CEO of Leejam Sports Company, stated, “Leejam Sports has maintained consistent profit growth throughout 2023, setting record levels across all financial indicators during Q3, which culminates in continued exceptional performance since the beginning of the year. Much of this strong and continuous performance is attributed to the company’s product quality, diverse services, integrated strategy for attracting members from all segments, and its commitment to enhancing the customer journey and enriching their experience. The opening of 11 new centers since the end of September 2022 demonstrates the company’s dedication to expanding access to a variety of sports activities, contributing to building a vibrant community that promotes health, happiness, and activity in all areas it serves.”
Profits Across Sectors
1. Male Centers: Segment revenues for the current year’s Q3 and the first nine months reached SAR 263 million and SAR 696 million, with an increase of 33% and 27%, respectively. The number of male members reached 348,000 by the end of Q3, a historical high.
2. Female Centers: Segment revenues for the current year’s Q3 and the first nine months reached SAR 84 million and SAR 224 million, with an increase of 31% and 31%, respectively. The number of female members reached 100,000 by the end of Q3, a historical high.
3. Corporate Sector: The growth in corporate segment revenues is partly attributed to the improved onboarding experience for sector members through easy, seamless, and multi-channel digital services.
Leejam’s Formula for Maintaining Profitability Amid Escalating Costs
Leejam’s operating profits saw significant growth in Q3 and the first nine months of the year, despite increased sales and marketing expenses, general and administrative costs, including expenses related to hiring and investments in new technologies. The company’s profits before accounting for depreciation, amortization, interest, zakat, and taxes increased by 34% and 32% during Q3 and the first nine months of the year, amounting to SAR 191 million and SAR 481 million, respectively, driven by higher operating profits. Additionally, the company also recorded its highest-ever deferred revenue balance, propelled by increased subscription sales during the successful promotional campaign for Saudi National Day in September 2023. Membership and subscription revenues showed growth during Q3, reaching SAR 305 million, a 30% increase compared to Q3 2022. This increase can be attributed to the continuous and comprehensive improvement of customer experiences across all membership categories.
Leejam’s Expansion and Development Strategy
When discussing Leejam Sports’ strategy for growth and advancement, Adnan Al-Khalaf expressed, “At Leejam Sports, we focus on a clear strategy with two main tracks. First, we aim to grow and develop our existing clubs, renovating them and increasing their membership through the ‘Your Club is Changing’ project, which has already seen 40 clubs developed and is ongoing. The second track involves Leejam’s announcement to expand with more than 100 additional clubs”.
Commenting on the expansion plans of Leejam Sports Clubs, Adnan Al-Khalaf said during his interview with Al-Arabiya channel: “After opening 11 branches in the third quarter of this year, we are continuing with the expansion plans as we aim to reach 250 club by 2025 in Saudi Arabia and the UAE. We also expect during the current and next quarter to achieve the highest rate of openings for our clubs, whether for women or men”. Pointing out that more financial data in addition to the company’s new strategy will be disclosed as part of the “Leejam Day” conference scheduled for November 6, 2023.
The increase in membership numbers has boosted demand for personal training services, leading to a 37 million and 100 million SAR increase in sector revenues during the current year’s Q3 and the first nine months, respectively. This is a result of the company’s investment in training programs, whether in swimming, group exercises, or specialized exercises such as boxing, cycling, and other scientifically designed high-quality training sessions to provide a better experience for customers. The enhancements introduced on our digital platform dedicated to members in 2023 have facilitated members’ experiences in purchasing, payments, reservations, and logging their sessions, significantly improving the quality of personal training services. Furthermore, enhancing the digitization of member experiences and their interaction with personal trainers through our electronic platform has allowed better utilization of personal trainers’ capabilities, offering more opportunities to boost their activity and generate higher profits for both them and the company.