GASCO profits decline 14% to SR73 mln in 1Q

National Gas and Industrialization Co. (GASCO) announced that its profits after zakat and tax declined 14% to SR 73 million in the first quarter of 2022 compared to 85 million during the same period of 2021.

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

The company’s operational profit climbed 4% to SR 35 million in the 1^st quarter of the current year from SR 34 million in the same period of the previous year.

Gross profit of GASCO was SR 76.3 million in the first quarter of this year, the same amount reported a year ago, while the profit per share soared to SR 0.97 from SR 1.14.

The decrease in net profit by SR 12 million is mainly due to the followings:

– Decrease in investments’ income by SR 8 million represented mainly in the decrease of the dividends received from National Industrial Gases Company.

– Decrease in investment income from associates by SR 5 million.

– Despite of the increase in other income by SR 1 million.

The increase in net profit by SR 30 million is mainly due to the followings:

– Increase in gross profit by SR 20 million is due to the increase in revenues.

– Increase in income from investments by SR 14 million.

– Decrease in operating expenses by SR 3 million.

– Decrease in finance charges by SR 1 million.

– Despite of the decrease in the share of profits from associates by SR 5 million, in addition to the increase in Zakat expense by SR 3 million.

Included in the accrued expenses and other current liabilities is an unapplied collection account (“the unapplied account”) of SR 27.4 million (2021: SR 27.4 million). As detailed in note 11(a) to the interim condensed consolidated financial statements; the Group discovered in 2020 that certain transactions totaling SR 25.7 million related to embezzlement transactions committed by a former employee, were routed through this account. These transactions were reversed as at 31 December 2020. Other transactions in this account could not be completely traced and the closing balance could not be reconciled as at 31 March 2022 due to lack of audit trail. We were unable to satisfy ourselves with respect to the existence and completeness of this account, nor were we able to perform other alternative procedures. Accordingly, we are unable to determine if any adjustments are required to this account and the related impact on these interim condensed consolidated financial statements.

In reference to the qualification mentioned in the independent auditor report regarding the balance of unapplied collection account amounted to SR 27.4 million, the Company assured that it is still continuing its efforts in coordination with the external auditor to reconcile this account, and expects that such reconciliation will have a positive impact on the Company’s results in the future.