Leisure & Hospitality

Saudi gym chain Leejam pumps up its profits

October 29, 2024, 4:47 PM

Gyms such as Leejam are benefiting as Saudi Arabia attempts to motivate its citizens to pursue fitness

Leejam YTD profit $94.5m
Shares up 44.46%
Fitness sector worth $4bn

Leejam Sports Co has reported a net profit of SAR355 million ($94.5 million) for the first nine months of 2024, an increase of 56 percent compared with the same period last year.

The Riyadh-based company’s revenue grew 18 percent year on year as subscriptions and membership revenue rose 14 percent, and paid programmes revenue climbed 45 percent.

Across Saudi Arabia and the UAE Leejam operates 178 gyms and more than 650 other sports facilities, with a combined paid membership of around 400,000.

Shares in Leejam are trading at SAR195, which is 44 percent up on last year.

In financial statements Leejam said that the first nine months of 2024 included various one-off incomes. It earned SAR18 million from rent negotiations on a previously impaired centre in Ras Al Khaimah; SAR92 million from selling three land plots in Riyadh; and SAR7 million profit from short-term murabaha, an Islamic financing structure in which the seller and buyer agree to the cost and markup of an asset.

Fitness is becoming big business in Saudi Arabia with the sector valued at SAR16 billion.

Under the kingdom’s Vision 2030 quality of life objectives, the Saudi government aims to raise the proportion of the population that is physically active — taking part in sport and other activities every week — to 40 percent. Fitness brands have been piling into the country to capitalise on this.

Fast-growing brands such as GymNation are expanding in Saudi Arabia, viewing the country as their most significant opportunity in the Gulf.

Outside players such as the UK’s PureGym are also getting involved – it wants to open 40 gyms in the kingdom by 2025.