The Group achieved a strong financial results driven by our key objectives for 2022, in a year full of challenges and fluctuations on the economic front, in addition to the volatility in the market. Against this background, there are many things that we are always keen to review in order to improve the Group’s positioning, financial performance and other related developments.

We strive to achieve our goals and achievements in parallel, adding momentum to year-on-year Group’s growth and performance. Post our IPO, the Group embarked to implement its diversification strategy, one which continued its development and roll-out during 2022.

In overview concerning our Finance Division, since the formation of the Group we have significantly expanded our role and capacity in support of our Group and its subsidiaries growth, while also maintaining strong focus on our core products and services.

A key development in our role, is the adoption of an increasingly outward looking operation, as the Saudi capital market has achieved many successes in line with Vision 2030. We seek to be as transparent and share information of the highest quality, as per this report. Our Group remains a key contributor to the sustainable development of the Kingdom.

Performance in context

Global markets experienced varying intensities of turbulence as a result of rising inflationary pressures and responses, compounded by economic instabilities during 2022. While the Tadawul All Share Index (TASI) gained during seven months in 2022 and registered a strong 16% gain in the first quarter of the year, these uncertainties of a global recession among other events resulted in the index declining during five months, ending 2022 with a YoY decline of 7.1%.

Impacted by this mixed performance of the capital market, the Saudi Tadawul Group registered a net income after Zakat of SAR 424.6 Mn, with a year-on-year decrease of 27.8%, mainly driven by the decrease in operating revenue by 8.1% YoY reaching SAR 1,071.4 Mn in FY 2022, predominantly due to the decrease in equity trading and related post trade revenues driven by the decrease in trading values which contracted by 23.0%, as almost 62% of our revenue is linked with market trading activity. in addition, the operating expenditures increased 16.6% YoY reaching SAR 644.3 Mn in the FY 2022, due to the increase in the manpower costs, the largest cost item, driven by the increase in headcount as per the Group’s expansion plan.

Our efforts towards diversification of revenue base has started to show progress, as almost 38% of our revenue is now not linked with market trading activity and these products and services have registered growth YoY despite market trading activity contraction.

We continue to introduce new and well-founded products that increasingly contribute towards stabilizing strong revenue streams, and enhancing Group growth.

Our Security Clearing subsidiary Muqassa introduced clearing services in April, as part of our ongoing efforts to accommodate the evolving needs of investors, we have also embarked on optimized automation of our operating activities, implementing a range of new software enhancements that will streamline and expand our financial management tools and capability.

During the Q4 2022, Wamid signed a sale and purchase agreement with National Two Ventures Sole Shareholder to acquire 51% shares in Direct Financial Network Company (DirectFN) in the value of SAR 133,9 Mn, as part of its growth strategy.

The activation of co-location services at the beginning of the year has been another significant innovation, further expanding and enhancing growth opportunities for the Exchange and our Group.

Our Finance Division is closely working together with subsidiaries and divisions in supporting corporate strategy implementation.

Finally, I would like to thank our Chairperson, Board of Directors and Group CEO for their support and guidance. I would also like to thank our shareholders for their valuable confidence in Saudi Tadawul Group.

Financial review/key ratios

Year ended 31 December	2022 SAR Mn	2021 SAR Mn
Trading revenues	666.5	810.5
Non-trading revenues	405.0	355.5
Operating revenues	1,071.4	1,166.1
Opex	644.3	552.5
EBITDA	490.3	670.6
EBITDA margin (%)	46	58
Net income after Zakat	424.6	587.7
Net income margin (%)	40	50
Earnings per share (SAR)	3.54	4.90

Profit and Loss Snapshot

Year ended 31 December	2022 SAR Mn	2021 SAR Mn	YoY Change (%)
Operating revenues	1,071.4	1,166.1	-8.1
Operating expenses	581.1	495.5	17.3
EBITDA	490.3	670.6	-26.9
EBITDA margin (%)	46	58
Depreciation and amortization	63.2	57.0	10.8
EBIT	427.1	613.6	-30.4
EBIT margin (%)	40	53
Investment income and other income	75.1	43.6	72.1
Loss from associates	(9.9)	(3.3)	202.5
Zakat	67.7	66.2	2.2
Net profit after Zakat	424.6	587.7	-27.8
Net profit margin (%)	40	50
Earnings per share (SAR)	3.54	4.90

Financial Position Snapshot

Year ended 31 December	2022 SAR Mn	2021 SAR Mn	YoY Change (%)
Cash and cash equivalents	2,118.8	86.2	2358.1
Investments	674.4	2,687.0	-74.9
Other assets	4,896.8	770.1	535.8
Total assets	7,690.0	3,543.3	117.0
Total liabilities	4,510.4	450.9	900.3
Total equity	3,179.7	3,092.4	2.8