Saudi Arabia's Business Sector Reaches Record Operating Profits in 2023

Riyadh: Saudi Arabia's business sector reported operating profits of 3.127 trillion riyals for the past year, achieving a robust operating profit margin of 59%. This surge in profits is highlighted by an increase in operating revenues, which rose by 230 billion riyals to a total of 5.3 trillion riyals, marking a growth rate of 4.5% compared to the previous year's 5.07 trillion riyals.

According to the 2023 Comprehensive Economic Survey Bulletin released by the General Authority for Statistics, total operating expenses reached 2.165 trillion riyals. "Operating revenues" refer to the cash earnings generated from an institution's core and ancillary activities, whereas "operating surplus" is defined as total revenues minus total expenses and worker compensations.

Worker compensations in the sector amounted to 544.7 billion riyals, with the value of fixed capital formation hitting 867.8 billion riyals. Leading the charge in operating revenues were the mining and quarrying sector with 1.1 trillion riyals, manufacturing industries contributing 1.6 trillion riyals, and the wholesale and retail trade sector at 850 billion riyals. Collectively, these sectors accounted for 67.8% of total operating revenues.

In terms of contribution to fixed capital formation, wholesale and retail trade activities led with 22.6%, closely followed by manufacturing at 22.4%. Mining and quarrying activities and construction were next, contributing 14.9% and 12.2% respectively. Information and communications, alongside transportation and storage activities, contributed 5.2% and 4.6%, while finance and insurance activities made up 1.0%.

Moreover, the total purchases of fixed assets rose to 1.5 trillion Saudi riyals, with total sales reported at 646 billion. These figures highlight the dynamic nature and growth potential of Saudi Arabia's business sector during this period.