|Net profit of SR 26.27 million for the first half of financial year 2022 (“1H 2022”) compared to a net loss of SR (16.56) million for the first half of financial year 2021 (“1H 2021”) is due to the following main reasons:|
a) Gross profit increased to SR 56.23 million in 1H 2022 from SR 7.18 million in H1 2021, mainly due to the increase in volume, improved mix of sold products, efficiency improvement and optimization of direct structural cost.
b) Share of loss in an affiliate (Global Pipe Company) decreased to SR 0.40 million in 1H 2022 from SR 4.88 million in 1H 2021.
c) Administrative expenses decreased to SR 11.17 million in 1H 2022 from SR 15.08 million in 1H 2021, mainly due to the reduction of indirect structural cost and service indemnity cost.
The above listed positive changes were partially offset by net zakat and tax expense amounting to SR (5.26) million in 1H 2022 compared to net zakat and tax benefit amounting to SR 1.56 million in 1H 2021, increase in selling, marketing and distribution expenses to SR 8.80 million in 1H 2022 from SR 4.98 million in 1H 2021, and an increase in financial charges to SR 6.01 million in 1H 2022 from SR 2.49 million in 1H 2021.
EBITDA represents earnings before interest, tax, depreciation and amortization.
The Company recorded a positive EBITDA of SR 59.83 million in 1H 2022, compared to SR 11.50 million in 1H 2021.
Due to the higher level of activity and the increase in working capital in 1H 2022, the Company recorded a positive free cash flow of SR 27.77 million in 1H 2022, compared to SR 58.08 million in 1H 2021. Net debt decreased to SR 102.06 million as at the end of 1H 2022 from SR 158.56 million as at the end of 1H 2021. This improvement reflects cash discipline measures and working capital management implemented by the Company.