Al Gassim Holding losses rise 7% in Q2 to SR313.5 thousand

The financial statements of Al Gassim Investment Holding Company “GACO” revealed that the company’s losses increased in the second quarter of this year by 7% to reach SR313.47 thousand, compared to losses of SR292.89 thousand for the same period last year.
The company said in a statement to the Saudi market, Tadawul, on Thursday, that the increase in losses during the comparison periods is due to the increase in the value of the provision for expected credit losses component, and the decrease in the value of profits from the sale of property, machinery, and equipment, despite the decrease in the value of general and administrative expenses during the current period.
The company incurred losses of SR782.65 thousand in the first half of this year, compared to losses for the same period of the previous year, which amounted to SR317.34 thousand, with a significant increase in losses by 146.6%.
The company explained that the increase in semi-annual losses is due to the increase in the value of provisions made during the current period compared to the same period of the previous year, despite the decrease in the value of general and administrative expenses during the current period.
The reason of the increase (decrease) in the net profit during the current quarter compared to the same quarter of the last year is:
The reason for the increase in the current quarter’s loss is mainly due to the increase in the value of the provision for expected credit losses component, and the decrease in the value of profits from the sale of property, plant and equipment during the current quarter compared to the same quarter of the previous year, despite the decrease in the value of general and administrative expenses during the current quarter.
The reason of the increase (decrease) in the net profit during the current quarter compared to the previous quarter of the current year is:
The reason for the decrease in the loss of the current quarter compared to the previous quarter is mainly due to the decrease in the value of the provision for expected credit losses formed during the current quarter and the decrease in the value of general and administrative expenses, compared to the previous quarter, despite the increase in the provision for Zakat component, and the decrease in the value of dividends received during the current quarter.
The reason of the increase (decrease) in the net profit during the current period compared to the same period of the last year is:
The reason for the increase in the loss of the current period is mainly due to the increase in the value of provisions made during the current period compared to the same period of the previous year, despite the decrease in the value of general and administrative expenses during the current period.
It said that: “We draw attention to note no. (16) in the interim condensed financial statements, which indicated the existence of a lawsuit filed by the company no. (228) for the year 1442H before the First Circuit of the Administrative Court in Buraidah against the branch of the Ministry of Environment, Water and Agriculture (“the Ministry”) in the Qassim region, which relates to a request to cancel the negative decision represented in the Ministry’s branch refraining from submitting to the Supreme Court by requesting the company’s right of the entire area that is revived from the land handed to it. Approval was issued by the High Commissioner for the company to own an area of only 74 million square meters out of the total land area of 116 million square meters. Noting the case of the company losing the lawsuit, it will materially affect the company due to the association of the disputed land with the rental income contracts made by the company with third parties, which represents the main source of income for it. The expected losses can only be determined at the final settlement of that lawsuit. On 30 March 2021 a decree was issued not to accept Case no. (228) and the company objected to the decree before the Administrative Court of Appeal. Judgment issued on 30 March 2021, related to Case No. (228), which ruled that the case was not accepted, and the Ministry of Environment, Water and Agriculture’s negative decision of its refusal to refer the company’s grievance for not owning the entire area of land that it revived assigned to it to the committee stipulated in Article no. 10 of the system for the distribution of heathlands. An application was submitted to register the case in front of the committee, and the committee’s response has not been received to date”.
On 18 May 2021, the Company received a letter from the Ministry of Environment, Water and Agriculture, , regarding the Sheri land, in which the Ministry hopes to pay the same rent for the encroached area, which the Company revived from the date of laying hands to the state treasury in favour of the Ministry, and since there is an existing disagreement against the branch of the Ministry of Environment, Water and Agriculture, in which the Company demands to cancel the negative decision represented in the ministry’s refusing from submitting to the Supreme Court by requesting the Company’s ownership of the entire area that the Company has revived from the land it received. Therefore, the Ministry is not entitled to demand the rent before deciding whether the company owns the land or not. The company objected to the decision on 14 July 2021. Our conclusion has not been modified with respect to this matter.
Certain comparative figures for the previous period have been reclassified to conform to the presentation used for the current period.