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Saudi Steel Pipe Co. announces its Interim Financial Results for the Period Ending on 2022-06-30 ( Six Months )

Element ListCurrent QuarterSimilar quarter for previous year%ChangePrevious Quarter% Change
Sales/Revenue 211.8288.48139.4184.0815.07
Gross Profit (Loss) 27.284.83464.828.96-5.8
Operational Profit (Loss) 18.55-4.96-19.98-7.16
Net Profit (Loss) after Zakat and Tax 11.74-8.08-14.53-19.2
Total Comprehensive Income 11.74-8.08-14.53-19.2
All figures are in (Millions) Saudi Arabia, Riyals
Element ListCurrent PeriodSimilar period for previous year%Change
Sales/Revenue 395.9180.55119.27
Gross Profit (Loss) 56.237.18683.15
Operational Profit (Loss) 38.53-10.72-
Net Profit (Loss) after Zakat and Tax 26.27-16.56-
Total Comprehensive Income 26.27-16.56-
Total Share Holders Equity (after Deducting Minority Equity) 521.48476.639.41
Profit (Loss) per Share 0.52-0.33
All figures are in (Millions) Saudi Arabia, Riyals
Accumulated LossesCapitalPercentage %
34.15106.69
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 Net profit of SR 11.74 million for the second quarter of financial year 2022 (“Q2 2022”) compared to a net loss of SR (8.08) million for the second quarter of financial year 2021 (“Q2 2021”) is due to the following main reasons:

a) Gross profit increased to SR 27.28 million in Q2 2022 from SR 4.83 million in Q2 2021, mainly due to the increase in volume and improved product mix.

b) Administrative expenses decreased to SR 5.57 million in Q2 2022 from SR 7.99 million in Q2 2021, mainly due to the reduction of indirect structural cost and service indemnity cost.

c) Share of loss in an affiliate (Global Pipe Company) decreased to SR 0.29 million in Q2 2022 from SR 1.89 million in Q2 2021.

The above listed positive changes were partially offset by net zakat and tax expense amounting to SR (2.66) million in Q2 2022 compared to net zakat and tax benefit amounting to SR 0.70 million in Q2 2021, and an increase in selling, marketing and distribution expenses to SR 5.00 million in Q2 2022 from SR 2.07 million in Q2 2021.

EBITDA represents earnings before interest, tax, depreciation and amortization.

The Company recorded an EBITDA of SR 29.16 million in Q2 2022, compared to SR 6.37 million in Q2 2021.

In addition, the Company recorded a positive free cash flow of SR 89.02 million in Q2 2022, compared to 18.91 million in Q2 2021. Net debt decreased to SR 102.06 million as at the end of Q2 2022 from SR 158.56 million as at the end of Q2 2021. This improvement reflects cash discipline measures and working capital management implemented by the Company.

The reason of the increase (decrease) in the net profit during the current quarter compared to the previous period of the current year is Net profit of SR 11.74 million for Q2 2022 compared to a net profit of SR 14.53 million for the first quarter of financial year 2022 (“Q1 2022”) is due to the following main reasons:

a) Gross profit decreased to SR 27.28 million in Q2 2022 from SR 28.96 million in Q1 2022, mainly as a result of product mix.

b) Selling, marketing and distribution expenses increased to SR 5.00 million in Q2 2022 from SR 3.80 million in Q1 2022.

EBITDA represents earnings before interest, tax, depreciation and amortization.

The Company recorded an EBITDA of SR 29.16 million in Q2 2022, compared to SR 30.66 million in Q1 2022.

In addition, the Company recorded a positive free cash flow of SR 89.02 million in Q2 2022, compared to a negative free cash flow of SR (61.24) million in Q1 2022. Net debt decreased to SR 102.06 million as at the end of Q2 2022 from SR 191.46 million as at the end of Q1 2022. This improvement reflects cash discipline measures and working capital management implemented by the Company.

The reason of the increase (decrease) in the net profit during the current period compared to the same period of the last year is 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.

Statement of the type of external auditor's report Emphasis of Matter
Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor Opinion We draw attention to note 16 to the accompanying interim condensed consolidated financial statements with respect to certain plots of land owned by the Group became inactive due to cancellation by a court order. We are not qualifying our conclusion in respect of this matter.
Reclassification of Comparison Items A comparative period amount, as set out below, has been reclassified to conform with the current period presentation, and there was no effect of this reclassification on the reported results for the period.
Additional Information For further information, please see attached highlights.
Attached Documents  

The Capital Market Authority and Saudi 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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