GASCO Profits Fell to SR32 mln during Q2, down 13%

The net profit after zakat and tax for the National Gas and Industrialization Company (GASCO) decreased during the second quarter to SR32 million, compared to SR37 million in the same quarter of last year, at a rate of 13%.

This came after Wednesday’s announcement of the preliminary financial results for the period ending 30.06.2022 (6 Months).

The operational profit amounted to SR19 million in the second quarter, compared to SR17 million in the same quarter of the previous year, a growth of 13%.

The gross profit amounted to SR66 million in the second quarter, compared to SR63 million in the same quarter of the previous year, an increase of 5%.

The net profit after zakat and tax during the current period amounted to SR105 million, compared to SR122 million in the same period last year, down 14%.

Profits per share in the current period reached SR1.4, compared to SR1.62 in the same period last year.

The decrease in net profit of SR5 million is mainly due to the followings:

– Decrease in investments’ income by SR13 million represented mainly in the decrease in the revenues of investing funds.

– Increase in operating expenses by SR1 million.

Despite the:-

– Increase in gross profit by SR3 million due to the increase in revenues.

– Decrease in Zakat expense by SR 6 million.

The decrease in net profit by SR41 million is mainly due to the followings:

– Decrease in gross profit by SR11 million due to the decrease in revenues in the current quarter compared to the previous quarter resulted from the seasonality increase in the consumption of gas during the first quarter of every year.

– Increase in operating expenses by SR6 million due mainly to the increase in the amounts paid for the Early Retirement Plan (stage 2), in addition to the increase in professional consultation and society contributions.

– Decrease in investments’ income by SR29 million represented mainly in the decrease in the revenues of investing funds.

Despite the increase in other revenues by SR4 million

“The decrease in net profit by SR17 million is mainly due to the followings:

– Decrease in investments’ income by SR21 million represented mainly in the decrease in the revenues of investing funds.

– Decrease in the share of results of associates by SR6 million.

Despite the:-

– Increase in gross profit by SR3 million.

– Decrease in Zakat expense by SR4 million.

– Decrease in operational expenses by SR1 million

– Increase in other revenues by SR4 million.

– Decrease in financing charges by SR 0.5 million.”

As detailed in note 15 (c) to the interim condensed consolidated financial statements, accrued expenses and other current liabilities include an amount of SR27.4 million (2021: SR 27.4 million) representing an unapplied collection account (the “unapplied account”).

This unapplied account includes certain transactions totaling SR25.7 million which were discovered in 2020 by the Group and relate to embezzlement transactions committed by a former employee during the period from 2017 to 2020 and which had been routed through this account.

The embezzlement transactions were reversed as at 31 December 2020, and a separate account created for them. However, the original transactions in this account could not be traced to sufficient and appropriate evidence. We were unable to satisfy ourselves with respect to the existence and completeness of this account, nor 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.

Certain comparative figures have been reclassified to conform to the current period’s presentation. For more information refer to note (23) to the 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.