Al-Baha Losses Jump 308% to SR4mln in 1Q

Al-Baha Investment and Development Co. announced that its losses after zakat and tax jumped 308% to SR 4 million in the first quarter of 2022 compared to SR 994K during the same period of 2021.

This came after Al-Baha announcement on Thursday of the preliminary financial results for the period ending on 31.03.2022 (three months).

The company’s operational loss grew 483% to SR 3 million in the 1^st quarter of the current year from SR 554K in the same period of the previous year.

Gross profit of Al-Baha declined 18% to SR 1.08 million in the first quarter of this year from SR 1.32 million a year ago, while the loss per share dipped to SR 0.05 from SR 0.22.

The reason for the net loss during the current quarter amounting to 4,097.338 Saudi riyals compared to the same quarter of the previous year despite the decrease in general and administrative expenses as well as the decrease in the provision for expected credit losses is due to the following reasons:

Recording non-recurring subscription expenses amounting to 3,995,600 riyals.

An increase in the estimated zakat provision for the same quarter of the previous year.

The reason for the decrease in net loss for the current quarter (Q1 2022) compared to the previous quarter (Q4 2021) is due to:

Not recording an impairment loss for investment properties, which was recorded in the previous quarter of last year, at a value of 7,046,667 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.

We would like to draw attention to the following:

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.

Additional Information   The accumulated losses as on March 31, 2022 amounted to 81,741,387 SAR, which is equivalent to 27.5% of the company’s current capital of 297,000,000 SAR.

The loss per share was calculated during the current period (three months) for this year 2022 on the basis of the parent company’s share of a net loss of (-4,097,338) riyals (after excluding the minority interest).

The company would also like to clarify to the shareholders that the measures it has taken regarding these losses and their reduction are:

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

Second: Messrs. / Al-Dakhil Financial Group has been appointed as a financial advisor for the subscription.

Third: On December 13, 2021, the Capital Market Authority announced the approval of increasing the company’s capital by 12,000,000 riyals.

Fourth: On January 31, 2022, the company announced its invitation to hold an extraordinary general assembly that included an increase in the company’s capital.

Fifth: On February 21, 2022, the Assembly was held. The Extraordinary General Assembly approved the increase in the company’s capital by approving an increase in the company’s capital by 120,000,000 riyals, so that the new capital after the increase became 297,000,000 riyals.

Sixth: On March 13, 2022, the company announced the results of trading priority rights and subscribing to new shares. The percentage of offered shares was covered by 89.46%.

Seventh: On March 20, 2022, the company announced the results of the remaining offering, which covered 568.7% of the value of the remaining shares.

Eighth: All procedures related to increasing the company’s capital from 177,000,000 Saudi riyals to 297,000,000 Saudi riyals have been completed, and this positive impact resulted in a decrease in the company’s accumulated losses ratio, as the accumulated losses decreased from 43.86% for the period ending on December 31, 2021 to 27.5% as on 31 March 2022.