Wafrah reports net profit of SR5 mln in Q2‎

Wafrah for Industry and Development Co. recorded a net profit after zakat and tax in the second quarter of SR 5.02 million, compared to a loss of SR 2.5 million in the same quarter of last year (six months).

The operational profit amounted to SR 6.3 million in the second quarter, compared to a loss of SR 2.7 million in the same quarter of the previous year.

The net profit after zakat and tax in the 6-month period amounted to 11.2 million riyals, compared to a loss of 2.7 million riyals in the same period last year.

The total shareholders’ equity “without minority rights” amounted to 63.8 million riyals in the current period, compared to 59.6 million riyals in the same period last year, a growth of 7%.

The company’s profits per share in the current period amounted to 1.45 riyals, compared to a loss of 0.36 riyals in the same period last year.

The reason for the net profit incurred in the current quarter compared to the net losses of the corresponding quarter of the previous year is attributed to the increase in sales by 117.83 %, and to the increase in average selling prices, and to the decrease in unit cost of sales that resulted from increase in production volume and efficiency, despite the increase in provision for expected credit.

The main reason for the decrease in net profit incurred in the current quarter compared to the previous quarter is attributed to the decrease in sales by 4.53 %, and to the increase in the General and Administrative expenses and the increase in provision for expected credit.

The reason for the net profit incurred in the first period compared to net losses in the corresponding period of the previous year is attributed to the increase in sales by 83.99 %, and to the increase in average selling price, and to the decrease in cost of sales that resulted from increase in production volume and reduction in unit cost, despite the increase in the General and Administrative expenses, and the increase in selling and marketing expenses and the increase in provision for expected credit.

The company would like to draw attention to Note No. (2. e) about the attached interim condensed financial statements, which indicates that the company has achieved accumulated losses amounting to 12,569,441 Saudi riyals as on June 30, 2022, and the company’s current liabilities exceeded its current assets by 12,365,433 Saudi riyals in that The date, and these circumstances indicate the existence of a material uncertainty, may cast significant doubt on the Company’s ability to continue as a going concern, and our conclusion has not been modified in this respect.

Additional Information:

Earnings per share

The weighted average number of shares was reached by taking the effect of the capital decrease from the beginning of the earliest period offered to comply with the requirements of IAS 33.

Capital Increase

On 22 May 2021, the Company’s Board of Directors issued a recommendation to increase the Company’s Capital through right issue amounting to SAR 154,340,700 and the Company appointed an issuer, a legal advisor and a financial advisor to manage the increase.

On 4 April 2022 the CMA has approved the capital increase request through right issue of SR 154,340,700.

On 14 June 2022 (Corresponding to 15 Dhu al-Qi’dah 1443 H ), the extraordinary general assembly has approved the BOD recommendation to increase the capital of 200% through right issue based on 2 rights per each owned share, and thus the number of shares after increase will be 23,151,105 shares amounting to SR 231,511,050 subsequent to issue 15,434,070 shares of SR 10 per share with total of SR 154,340,700. The Capital increase is to expanding the company’s operations, upgrading production lines and properly utilise the brands to cover the kingdom territories.

On 17 July 2022, the subscription was fully completed with total new shares of 12,009,112 shares pertains to old shareholders (77.81 %) and 3,434,958 shares pertains to new shareholders (22,19%)

On 9 August 2022, the company’s share Capital was amended and new CR was issued with new Capital of SR 231,511,050.

On 10 August 2022, the capital increases proceeds were received and deposited in company’s bank account by the underwriter.