Al-Baha Records Losses of SR 845,000 during the 3Q

Al Baha Investment and Development Company recorded losses after zakat and tax of 845 thousand riyals during the third quarter, compared to a profit of 177.8 thousand riyals during the same quarter of the previous year.

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

The operational loss amounted to SR105.24 thousand during the third quarter, compared to a profit of SR685.27 during the same quarter of the previous year.

The gross profit amounted to SR1.27 million during the third quarter, compared to SR1.51 million during the same quarter of the previous year, a decrease of 16.17%.

The net loss after zakat and tax during the current period amounted to SR2.47 million, compared to a profit of SR1.01 million during the same period of the previous year.

The loss per share during the current period amounted to SR0.138, compared to a profit of SR0.039 during the same period of the previous year.

The reason for the net loss during the current quarter, amounting to 845,203 Saudi riyals, compared with the same quarter of the previous year, is due to the following reasons:

An expected credit loss of 600.000 Saudi riyals was recorded due to the repercussions of the new Corona virus (Covid 19) pandemic and its direct impact on the real estate and leasing sector.

The increase in the cost of revenue, in addition to the increase in the provision for zakat.

The reason for the increase in net loss during the current quarter compared to the previous quarter is due to the decrease in revenues compared to the second quarter of 2021 and the recording of expected credit losses of 600,000 Saudi riyals, due to the repercussions of the emerging Corona Virus (Covid 19) pandemic and its direct impact on the real estate and rental sector.

The reason for achieving losses during the current period compared to the previous period is due to the decrease in revenues and the increase in the cost of revenues, in addition to the increase in general and non-recurring expenses related to the previously announced capital increase file expenses.

In addition to recording expected credit losses of 3,200,980 riyals during this period of this year, due to the repercussions of the emerging Corona Virus (Covid 19) pandemic and its direct impact on the real estate and rental sector.

The company noted to the “Note No. (5) about the condensed consolidated interim financial statements, which refers to the issue of exchanging assets with Al-Sata’a Modern Company, as detailed in the illustration, as the company established a provision for compensation for losses resulting from the asset exchange contract with Al-Sata’a Modern Company, amounting to SR 84,003,717. Supporting the previously issued ruling obliging Al-Baha Investment and Development Company to implement the terms of the contract with Al-Sata’a Modern Company, our opinion has not been modified accordingly.”

The accumulated losses as on 31 September 2021 amounted to SR71,734,942, which is equivalent to 40.53 % of the company’s capital of SR177,000,000.

The loss per share during the current period (nine months) for this year 2021 was calculated on the basis of the parent company’s share of the net loss of (-2,434,719) riyals (after excluding the minority’s equity share).

The company also clarified to the shareholders that the measures it has taken regarding these losses are:

First: On 10 November 2020 AD, the Board of Directors recommended increasing the company’s capital by offering priority rights shares in an amount of 120,000,000 riyals, through which the company aims to finance and implement its plans and future projects and expand its various activities in addition to reducing the company’s losses.

Second: Appointing Messrs. Al-Dakhil Financial Group as a financial advisor for the IPO.

Third: Work is still underway on the file of increasing the company’s capital with the CMA.

The procedures and instructions for companies whose shares are listed in the Saudi Stock Exchange, whose accumulated losses amounted to 35% or more of their capital, will be implemented.