“Saudi Pipes” records profits of SR11.7 million during the second quarter

The Saudi Steel Pipe Company revealed an increase in net profit after zakat and tax in the 2Q to SR11.7 million, compared to a loss of SR8.08 million in the same quarter of last year.

This came after announcing on Thursday the preliminary financial results for the period ending on 30.06.2022 (six months).

The operational profit amounted to SR18.5 million in the 2Q, compared to a loss of SR4.9 million in the same quarter of the previous year.

The gross profit in the 2Q amounted to SR27.3 million, compared to SR4.8 million in the same quarter of last year, a growth of 464.8%.

The total shareholders’ equity “without minority rights” amounted to SR521.4 million in the 6-month period, compared to SR476.6 million in the same period last year, an increase of 9.4%.

Profits per share in the current period amounted to SR0.52, compared to a loss of SR0.33 in the same period last year.

Net profit of SR 11.74 million for the second quarter of financial year 2022 (“Q2 2022”) compared to a net loss of SR (8.08) million for the second quarter of the financial year 2021 (“Q2 2021”) is due to the following main reasons:

1. Gross profit increased to SR 27.28 million in Q2 2022 from SR 4.83 million in Q2 2021, mainly due to the increase in volume and improved product mix.
2. Administrative expenses decreased to SR 5.57 million in Q2 2022 from SR 7.99 million in Q2 2021, mainly due to the reduction of indirect structural cost and service indemnity cost.
3. Share of loss in an affiliate (Global Pipe Company) decreased to SR 0.29 million in Q2 2022 from SR 1.89 million in Q2 2021.

The above listed positive changes were partially offset by net zakat and tax expense amounting to SR (2.66) million in Q2 2022 compared to net zakat and tax benefit amounting to SR 0.70 million in Q2 2021, and an increase in selling, marketing and distribution expenses to SR 5.00 million in Q2 2022 from SR 2.07 million in Q2 2021.

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

The Company recorded an EBITDA of SR 29.16 million in Q2 2022, compared to SR 6.37 million in Q2 2021.

In addition, the Company recorded a positive free cash flow of SR 89.02 million in Q2 2022, compared to 18.91 million in Q2 2021. Net debt decreased to SR 102.06 million as at the end of Q2 2022 from SR 158.56 million as at the end of Q2 2021. This improvement reflects cash discipline measures and working capital management implemented by the Company.

Net profit of SR 11.74 million for Q2 2022 compared to a net profit of SR 14.53 million for the first quarter of financial year 2022 (“Q1 2022”) is due to the following main reasons:

1. Gross profit decreased to SR 27.28 million in Q2 2022 from SR 28.96 million in Q1 2022, mainly as a result of product mix.
2. Selling, marketing and distribution expenses increased to SR 5.00 million in Q2 2022 from SR 3.80 million in Q1 2022.

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

The Company recorded an EBITDA of SR 29.16 million in Q2 2022, compared to SR 30.66 million in Q1 2022.

In addition, the Company recorded a positive free cash flow of SR 89.02 million in Q2 2022, compared to a negative free cash flow of SR (61.24) million in Q1 2022. Net debt decreased to SR 102.06 million as at the end of Q2 2022 from SR 191.46 million as at the end of Q1 2022. This improvement reflects cash discipline measures and working capital management implemented by the Company.

Net profit of SR 26.27 million for the first half of financial year 2022 (“1H 2022”) compared to a net loss of SR (16.56) million for the first half of financial year 2021 (“1H 2021”) is due to the following main reasons:

1. Gross profit increased to SR 56.23 million in 1H 2022 from SR 7.18 million in H1 2021, mainly due to the increase in volume, improved mix of sold products, efficiency improvement and optimization of direct structural cost.
2. Share of loss in an affiliate (Global Pipe Company) decreased to SR 0.40 million in 1H 2022 from SR 4.88 million in 1H 2021.
3. Administrative expenses decreased to SR 11.17 million in 1H 2022 from SR 15.08 million in 1H 2021, mainly due to the reduction of indirect structural cost and service indemnity cost.

The above listed positive changes were partially offset by net zakat and tax expense amounting to SR (5.26) million in 1H 2022 compared to net zakat and tax benefit amounting to SR 1.56 million in 1H 2021, increase in selling, marketing and distribution expenses to SR 8.80 million in 1H 2022 from SR 4.98 million in 1H 2021, and an increase in financial charges to SR 6.01 million in 1H 2022 from SR 2.49 million in 1H 2021.

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

The Company recorded a positive EBITDA of SR 59.83 million in 1H 2022, compared to SR 11.50 million in 1H 2021.

Due to the higher level of activity and the increase in working capital in 1H 2022, the Company recorded a positive free cash flow of SR 27.77 million in 1H 2022, compared to SR 58.08 million in 1H 2021. Net debt decreased to SR 102.06 million as at the end of 1H 2022 from SR 158.56 million as at the end of 1H 2021. This improvement reflects cash discipline measures and working capital management implemented by the Company.