GAZADCO Profits Fell to SR2.2 million during the 3Q by 73%

Jazan Energy and Development Company “JAZADCO” net profit after zakat and tax decreased to SR2.2 million during the third quarter, compared to SR8.4 million during the same quarter of the previous year by 73%.

This came after Jazan Energy and Development Co. announced its interim financial results for the period ending on 2021-09-30 (nine months).

The operational profit amounted to SR2.7 million during the third quarter, compared to SR9 million during the same quarter of the previous year, down 70%.

The gross profit amounted to SR9 million during the third quarter, compared to SR12 million during the same quarter of the previous year, down 26%.

The net profit after zakat and tax during the current period amounted to SR12 million, compared to SR10 million during the same period of the previous year, a growth of 27%.

Profits per share during the current period amounted to SR 0.24 riyals, compared to SR0.19 during the same period of the previous year.

The increase in profits is related to the growth in sales by 3.03%, as the agricultural & the aquaculture sectors sales grew by 5.4%, supported by an increase in sales of shrimp and fruits.

Furthermore, revenues from Real estate operation rose by 8.5% as a result of an increase in the occupancy rate, while the sales of the industrial sector (water factory) declined by 6%.

The increase in net profits is led by the increase of the gain on revaluation of vital assets, as a result of the company’s plan to increase the productivity force in the shrimp farm in addition to the reduction in cost of revenue, which contributed in a higher gross profit by 13.26% as a result of a higher efficiency and reduction in operating costs in the agricultural sector.

Furthermore, the performance improvement of the associates and subsidiaries has also contributed to the increase in net profits.

Therefore, all the aforementioned reasons contributed to the growth of net profits for this quarter compared to the same quarter from the previous year.

The reason for the increase in net profits during the current quarter compared to the previous quarter despite the decrease in sales is due to the increase of the gain on revaluation of vital assets, as a result of the company’s plan to increase the productivity force in the shrimp farm in addition the reduction in the cost of sales as a result of the decrease in the cost of sales in the current quarter at the cost of outstanding shrimp stock (livestock).

The reason for the increase in net profits during the current period compared to the same period of the previous year is due to an increase in sales by 3.03%, in addition to the measures taken to restructure the company’s sectors, which had an impact on raising the efficiency of performance. A number of initiatives were also implemented to reduce operational costs, which had a positive impact on achieving profits during the current period.

The company said that without modifying its conclusion, indicating that “we would like to draw attention to what is detailed in Note No. (22) of the supplementary notes to the condensed consolidated interim financial statements, as the comparative figures for the financial period ended on 30 September 2020 represent the financial statements numbers of the parent company without consolidation with its subsidiary, As Mango Jazan Trading Company was acquired on 26 February 2020, and the first financial statements according to the company’s articles of association dated 31 December 2020. Therefore, the first consolidated financial statements of the group were issued on 31 December 2020.”

“Some comparative figures for the previous year have been reclassified to conform to the presentation used for the current period.” The company concluded.