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Saudi Paper Manufacturing Co. announces its Interim Financial Results for the Period Ending on 2020-12-31 (Three Months)

Element ListCurrent QuarterSimilar quarter for previous year%ChangePrevious Quarter% Change
Sales/Revenue 119.25128.39-7.118124.29-4.055
Gross Profit (Loss) 28.4126.497.24838.82-26.816
Operational Profit (Loss) 13.39-4.98-15.77-15.091
Net Profit (Loss) after Zakat and Tax 6.24-11.39-3.9856.783
Total Comprehensive Income 8.39-10.91-3.7126.756
All figures are in (Millions) Saudi Arabia, Riyals
Element ListCurrent PeriodSimilar period for previous year%Change
Sales/Revenue 532.09527.130.94
Gross Profit (Loss) 148.679950.171
Operational Profit (Loss) 61.6930.54101.997
Net Profit (Loss) after Zakat and Tax 15.1-27.88-
Total Comprehensive Income 16.44-27.25-
Total Share Holders Equity (after Deducting Minority Equity) 89.1672.7222.607
Profit (Loss) per Share 1.64-3.03
All figures are in (Millions) Saudi Arabia, Riyals
Element ListExplanation
The reason of the increase (decrease) in the net profit during the current quarter compared to the same quarter of the last year is The increase in the net profit for the current quarter compared to the same quarter of the previous year is due to the significant improvement in the gross profit as a result of the lower cost of sales due to the availability of raw material inventory at an affordable price and other production costs as well as the improvement in the efficiency of the operations, although the pulp prices has increased during the last quarter of the current year. Further, in addition to the decrease in selling and distribution expenses, administrative expenses, and zakat provision as a result of the improvement in collection performance during the current quarter we have reduced the provision related to the impairment of trade receivables. Also, the current quarter's profits were reduced by a provisioned value of SAR 3.2 million.
The reason of the increase (decrease) in the net profit during the current quarter compared to the previous period of the current year is The increase in the net profit for current quarter compared to the previous quarter is due to the decrease in selling and distribution expenses, administrative expenses, finance charge expenses and and zakat provision, as a result of the improvement in collection performance during the current quarter we have reduced the provision related to the impairment of trade receivables.
The reason of the increase (decrease) in the net profit during the current period compared to the same period of the last year is The increase in the net profit for the current period compared to the similar period of the previous year is due to the increase in sales and the decrease in the cost of sales resulting improvement in the gross profit due to the availability of raw material inventory at an affordable price and other production costs as well as the improvement in efficiency of the operation. Further, in addition to the decrease in selling and distribution expenses, administrative expenses and finance charge expenses causing in the improvement of net profit for the current period. However, the profits for the current period were reduced by a provision of amounting to SAR 13.65 million. Although, in the similar period of the previous year, there was a reversal for impairment of trade receivables amounting to SAR 31.4 million compared to reversal of SAR 2.8 million in the current year.
Statement of the type of external auditor's report Qualified conclusion
Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor Opinion Management had performed an assessment for the impairment of the Group’s trade receivables as of December 31, 2019. Based on the results of this assessment, a reversal in allowance for impairment of trade receivables, amounting to SR 31.4 million, was recognized during the year ended December 31, 2019. However, management had not performed an assessment for the impairment of the Group’s trade receivables as of December 31, 2018, as required by IFRS 9 - Financial instruments and had not reflected the resulting impact, if any, in the statement of financial position and statement of profit or loss for the year ended December 31, 2018 and in the accumulated losses of the Group as of January 1, 2019. Accordingly, we are unable to determine whether any adjustment to accumulated losses of the Group as of January 1, 2019 and results for the year ended December 31, 2019, is necessary.

Emphasis of Matters:

1- Note 4 of these condensed consolidated interim financial statements which states that the management engaged a third party consultant for impairment assessment of its property, plant and equipment as at December 31, 2020 based on which 0.95 million impairment loss was recognized during the year ended December 31, 2020 (December 31, 2019: nil). The assessment includes assumptions related to future sales volume, prices, annual growth rates, terminal growth rates, net realizable value, discount rates and other related factors. The outcome of these assumptions is highly dependent on the success of future operations and market conditions as estimated by management and achieving its plans in future. Management is confident of its ability to meet its future business plan and believes that the carrying value of property, plant and equipment as of December 31, 2020 will not exceed their recoverable amounts.

2- Note 4 of these condensed consolidated interim financial statements which states that the management engaged a third party consultant for the impairment assessment of certain unutilized assets of property, plant and equipment as of December 31, 2020, amounting to SR 29.46 million (December 31, 2019: SR 43.7 million). Based on the results of this assessment, management has concluded that impairment amounting SR 0.6 million was required for these unutilized assets as of December 31, 2020 (December 31, 2019: SR 3.2 million). The assessment includes assumptions related to estimated selling price in ordinary course of business, estimated cost of completion and estimated cost necessary to make the sales of these assets. The outcome of these assumptions is highly dependent on market conditions as estimated by management and achieving its plans in future. Management is currently assessing the alternative utilization plan for these assets and has allocated funds in the recent approved budget for restructuring of these assets in order to utilize them in future. Management believes that these assets have the ability to provide future economic benefits to the Group and accordingly carrying amount of such assets will not exceed their recoverable amounts as of December 31, 2020.

3- Note 13 of these condensed consolidated interim financial statements which states that the Company has made an announcement on Tadawul for filling a law suit against Ex-CEO and Board Member of the Company.

Reclassification of Comparison Items Certain figures of the comparative period /year have been reclassified in order to conform with presentation in current period /year.
Additional Information The company's sales for the fourth quarter of this year amounted to SAR 119.25 million, compared to SAR 128.39 million for the same quarter of the previous year with a decrease of 7.1% and compared to the previous quarter of SAR 124.29 million with a decrease of 4.1%. The sales during the current period ending on December 31, 2020 (twelve months) amounted to SAR 532.09 million, compared to SAR 527.13 million for the same period of the previous year, with an increase of 0.9%.

The total comprehensive income of the owners of the company for the fourth quarter of this year amounted to SAR 8.4 million profit compared to SAR (10.9) million loss in the same quarter of the previous year, compared to SAR 3.7 million profit for the previous quarter. The total comprehensive income of the owners of the company for the current period ending on December 31, 2020 (twelve months) amounted to SAR 16.4 million profit compared to SAR (27.3) million loss for the same period of the previous year.

The total shareholders' equity (after excluding non-controlling interest) during the current period is SAR 89.16 million , compared to SAR 72.72 million for the period ending on December 31, 2019, with an increase of 22.6%.

Retained earnings as of December 31, 2020, amounted to SAR 2.97 million, representing 3.23%.

The earnings per share attributable to shareholders of the company in the current period amounted to SAR 1.64 , compared to loss of SAR (3.03) for the same period of the previous year.

The Capital Market Authority and the Saudi Stock Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.

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