SGS reports SR19 mln loss in 1Q, with 14% rise

Saudi Ground Services Co. (SGS) announced that its losses after zakat and tax rose 14% to SR 19 million in the first quarter of 2022 compared to 17 million during the same period of 2021.

This came after SGS announcement on Wednesday of the preliminary financial results for the period ending on 31.03.2022 (three months).

The company’s operational loss climbed 72% to SR 20 million in the 1^st quarter of the current year from SR 12 million in the same period of the previous year.

Gross profit of SGS fell 17% to SR 48 million in the first quarter of this year, compared to SR 58 million a year ago, while the loss per share soared to SR 0.101 from SR 0.089.

The net loss increased by 13.9% compared to same quarter of previous year, reaching SAR 19 million. The increase in the net losses is mainly due to higher operating cost by SAR 61.9 million to support the continuous recovery of level of operation and to prepare for the expected increase in flight traffic resulting from the announcement of lifting the precautionary measures of COVID-19. The recovery of operation has resulted in revenue to increase by SAR 51.8 million (13.9%) compared to same quarter of previous year.

The company disposed its investment in local equity shares which resulted in a gain of SAR 19.4M from FVTPL investment. The zakat expense increased by SAR 12.2M compared to same quarter of previous year.

The company recorded a net loss of SAR 19 million with a decrease of SAR 82.1 million compared to previous quarter which is due to reduction in impairment loss by SAR 40.8 million and administrative expenses by SAR 27.6 million. Whereas operating costs increased by SAR 7.4 million in preparation of expected increase in level of operation resulting from the announcement of lifting the precautionary measures of COVID-19.

Moreover, the current quarter recorded an increase in the gain from FVTPL investment by SAR 23.3M mainly due to disposal of local equity shares. The share of loss from equity accounted investees reduced by SAR 18.5M, while zakat expenses increased by SAR 6.2 million.

With the outbreak of COVID-19 and the suspension of domestic and international commercial flights from mid of March 2020, as a result of precautionary measures taken by the authorities, the company’s management has formed a Business Continuity Executive Committee, which developed a plan with different scenarios and several possibilities to reduce the impact of COVID-19 on the expected financial results and the associated cash flows. The committee identified initiatives to optimize costs without affecting the company’s ability to ramp-up its operational capabilities with the gradual recovery from easing the precautionary measures taken by the official authorities to limit the spread of COVID-19. Lifting of COVID-19 precautionary measures has been announced with effect from 6th of March,2022.

Total revenue for the current quarter amounted to SAR 424.8 million compared to SAR 373 million for the same quarter of the previous year which is an increase of 13.9%. The net loss for the current quarter amounts to SAR 19 million compared to net loss of SAR 16.7 million for the same quarter of last year which is an increase of 13.9%. The net loss for the current quarter is SAR 19 million compared to net loss of SAR 101.1 million for the previous quarter which is a decrease of 81.2%. The comprehensive loss for the current period is SAR 19 million compared to comprehensive loss of SAR 16.7 million for the same period last year which is a decrease of 13.9%. The Company has no minority interest with total shareholders’ equity reaching to SAR 2,245.7 million for the current period compared to SAR 2,482.5 million for the same period last year which is a decrease of 9.5%.