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Abdullah A. M. Al-Khodari Sons Co. announces its Annual Financial Results for the Period Ending on 31-12-2018

Element ListCurrent YearPrevious Year%Change
Sales/Revenue 164,688,523519,466,019-68.296
Gross Profit (Loss) -1,363,350,877-7,241,30918,727.409
Operational Profit (Loss) -1,541,977,098-37,053,5224,061.485
Net Profit (Loss) after Zakat and Tax -1,593,050,693-56,421,3642,723.488
Total Comprehensive Income -1,593,328,282-50,778,1013,037.825
Total Share Holders Equity (after Deducting Minority Equity) -1,189,701,592403,626,163-
Profit (Loss) per Share -28.56-1.01
All figures are in (Millions) Saudi Arabia, Riyals
Element ListExplanation
The reason of the increase (decrease) in the net profit during the current year compared to the last year is The reason for the increase in net loss is due to:

1- Decline in Revenue by 68.3% to SAR 164.68 million during the year 2018, compared to SAR 519.46 million in the year 2017, mainly due to no contribution in revenue from construction sector in 2018. Significant liquidity challenges leads to severe difficulties in executing the construction projects which reflected in some of the construction projects were assigned to others and some projects were cancelled/withdrawn by the clients and some other contracts are assigned a substantial proportion of the volume of work remaining for these contracts to subcontractors and slower progress on remaining construction projects. Official suspension/cancellation of number of construction projects and no new project awards in O&M sector (recurring business) in 2018 also contributed the sharp decline in revenue in 2018.

2- Gross loss has increased significantly by 18727.41% from SAR:7.24 million in 2017 to SAR:1,363.35 million in 2018. Revision in estimated cost to complete the construction projects in 2018 due to the unproductive costs incurred during the slow progress or suspension period, increase in fuel cost and employees related costs resulted many projects in loss making projects. As per the IFRS, all such losses are charged immediately to income statement. Increase in the estimated cost to complete the construction projects and cancellation/assignment of some of the construction projects to others, resulted in reversal of previously recognized revenue (unbilled revenue), as per the requirement of IFRS, all such reversals were charged to losses which resulted in significant increase in gross loss.

3- Other income has decreased by 32% (SAR 18 million) mainly due to the decrease in gain from the sale of used equipment by SAR: 13 million in 2018 as compared to the previous year. Decline in receipt of refund of work permit levy by SAR: 12.9 million in 2018 as compared to the previous year.

4- Finance charges has increased by 20.7% (SAR 15.28 million) in 2018 as compared to previous year mainly due to the increase in Sibor in 2018.

5- Additional impairment loss of SAR: 135.3 million was provided for trade receivables mainly due to the slow collection of receivables and mainly due to the old aged receivables. An additional impairment loss of SAR: 12.2 million was provided for fixed assets mainly due to the fact that the significant portion of assets were held at projects which are either cancelled, suspended or assigned to others.

The above was favorably counteracted by:

1- Decrease in selling and marketing costs by 32.7% (SAR 1.5 million), reflecting the sharp decline in bidding activities in 2018 as compared to last year and also decline in employees related costs due to cost cutting efforts started in 2014.

2- Decrease in G&A by 17.4% (SAR 5.87 million) mainly due to reduction in manpower costs. Administration cost also reduced significantly mainly due to the reduction in head office space and major portion of head office was vacated which was on rent. This is part of cost cutting efforts started in 2014.

3- Decrease in Zakat expenses by 77.8% (SAR 1.75 million).

Statement of the type of external auditor's report Disclaimer of opinion
Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor Opinion As attached
Reclassification of Comparison Items Refer to note 34 to the consolidated financial statements of the Group, which states that the comparative figures have been adjusted to correct the recording of the provision for credit impairment loss for both trade receivables and contract assets.
Additional Information 1-Abdullah A. M. Al Khodari Sons Co. announces its accumulated losses reaching 328.58 % of its capital:

a- Date of reaching accumulated losses: 31December 2018.

b- Amount of Accumulated losses: SAR 1,832,875,815.

c- Accumulated losses percentage of the capital: 328.58%.

2- New awards for theyearof 2018 were SAR 23.4 million compared to SAR 77.07 million during 2017. The contract backlog is SAR 391 million at the end of 2018 compared to SAR 2,560 million for 2017.

Attached Documents  

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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