SSP Records Net Profit of SR14.5 mln during 1Q

The Saudi Steel Pipe Company “SSP” recorded a net profit after zakat and tax of SR14.5 million during the first quarter, compared to a loss of SR8.5 million during the same quarter of the previous year.

This came after SSP announcement on Wednesday the consolidated preliminary financial results for the period ending on 31.03.2021 (three months).

The operational profit amounted to SR20 million during the first quarter, compared to a loss of SR6 million during the same quarter of the previous year.

The gross profit amounted to SR29 million during the first quarter, compared to SR2 million during the same quarter of the previous year, an increase of 1132%.

Profits per share during the current period amounted to SR0.29, compared to a loss of SR0.17 during the same period of the previous year.

Net profit of SR14.53 million for the first quarter of the financial year 2022 (“Q1 2022”) compared to a net loss of SR (8.48) million for the first quarter of the financial year 2021 (“Q1 2021”) is due to the following main reasons:

a) Gross profit increased to SR 28.96 million in Q1 2022 from SR 2.35 million in Q1 2021, mainly due to the increase in volume and improved mix of sold products.

b) Share of loss in an affiliate (Global Pipe Company) decreased to SR 0.12 million in Q1 2022 from SR 2.99 million in Q1 2021.

c) Administrative expenses decreased to SR 5.59 million in Q1 2022 from SR 7.09 million in Q1 2021, mainly due to the reduction of structural costs and service indemnity costs.

The above listed positive changes were partially offset by net zakat and tax expenses amounting to SR (2.60) million in Q1 2022 compared to net zakat and tax benefit amounting to SR 0.86 million in Q1 2021, trade receivables bad debt provision amounting to SR (0.44) in Q1 2022 compared to trade receivables bad debt provision reversal amounting to SR 1.50 million in Q1 2021, increase in financial charges to SR 2.84 million in Q1 2022 from SR 1.66 million in Q1 2021.

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

SSP recorded an EBITDA of SR 30.66 million in Q1 2022, compared to SR 5.13 million in Q1 2021.

Due to a higher level of activity, SSP’s working capital rose in Q1 2022 and recorded a negative free cash flow of SR (61.24) million compared to a positive free cash flow of 39.17 million in Q1 2021. Consequently, Net debt increased to SR 191.46 million at the end of Q1 2022 from SR 177.74 million at the end of Q1 2021

Net profit of SR 14.53 million in Q1 2022 compared to SR 1.57 million for the fourth quarter of the financial year 2021 (“Q4 2021”) is due to the following main reasons:

a) Gross profit increased to SR 28.96 million from SR 12.57 million in Q4 2021, mainly due to the increase in volume and improved mix of sold products.

The above listed positive change was partially offset by an increase in selling, marketing, and distribution expenses to SR 3.80 million in Q1 2022 from SR 2.41 million in Q4 2021, an increase in net zakat and tax expense to SR 2.60 million in Q1 2022 from SR 1.45 million Q4 2021 and decrease in other income to SR 0.86 million in Q1 2022 from SR 1.93 million in Q4 2021.

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

SSP recorded a positive EBITDA of SR 30.66 million in Q1 2022, compared to SR 17.51 million in Q4 2021.

Due to a higher level of activity, SSP’s working capital rose in Q1 2022 and recorded a negative free cash flow of SR (61.24) million compared to a negative free cash flow of (17.26) million in Q4 2021. Consequently, Net debt increased to SR 191.46 million at the end of Q1 2022 from SR 127.98 million at the end of Q4 2021

Without qualifying our conclusion, we draw attention to note 15 to the accompanying condensed consolidated interim financial statements with respect to certain electronic title deeds related to the Group land plots which became inactive due to cancellation by court order.

In addition to matter defined in note 13, certain comparative figures have been reclassified, split or merged to conform with the presentation in the current period.