FIPCO achieves profit of 2.2 mln during Q3

The Packaging Materials Manufacturing Company (FIPCO) achieved a net profit after zakat and tax in the third quarter of 2.2 million riyals, compared to a loss of 3.4 million riyals in the same quarter of last year.
This came after the announcement on Monday of the consolidated preliminary financial results for the period ending on September 30, 2022 (nine months).
The operational profit amounted to SR4.2 million in the third quarter, compared to a loss of SR1.5 million in the same quarter of the previous year.
The net profit after zakat and tax in the 9-month period amounted to SR3.5 million, compared to a loss of SR10.2 million in the same period last year.
The gross shareholders’ equity “without minority rights” amounted to SR123.6 million in the current period, compared to SR118.5 million in the same period last year, an increase of 4.3%.
Profits per share in the current period amounted to SR0.3, compared to a loss of SR0.89 in the same period last year.
The reason of the increase (decrease) in the net profit during the current quarter compared to the same quarter of the last year is:
FIPCO has achieved net profit of SR 2.25 million for the third quarter of 2022 compared to the net losses of SR 3.44 million in the corresponding quarter of the previous year 2021, the reasons lie mainly behind the following:
1- Increase in gross profit due from increased turnover as well as improved profit margin.
2- Increase in other revenues.
3- Decrease in selling and marketing expenses resulted from declined exports during this period and the variation in freight rates to some major destinations.
4- Increase in un-realized gains of investments at fair value through profit or loss.
These results achieved in spite of:
1- General and administrative expenses are slightly up.
2- Increase in banking charges because of absence of governmental initiatives, in order to minimize the impact of the coronavirus outbreak (Covid-19), particularly the initiative of deferred payment program related to postpone the due payment with no interest.
The reasons lie behind increased net profit for the third quarter of 2022 compared to the second quarter of the same year are mainly due to:
1. Decrease in selling and marketing expenses resulted from declined exports during this period and the variation in freight rates to some major destinations.
2. Expected credit losses provision was sufficient in accordance with IFRS 9.
3. Increase in un-realized gains of investments at fair value through profit or loss.
These results achieved in spite of the decrease in other revenues.
FIPCO has achieved net profit of SR 3.5 million for the nine months of 2022 compared to the net losses of SR 10.2 million in the corresponding period of the previous year 2021, the reasons lie mainly behind the following:
1- Increase in gross profit due from increased turnover as well as improved profit margin in the parent company.
2- Expected credit losses provision has been decreased in accordance with IFRS 9.
3- Increase in realized and un-realized gains of investments at fair value through profit or loss
3-Increase in other revenues because of obtaining the governmental financial support during the period as well as impairment of capital assets for low economic viability that took place in the corresponding period of 2021.
These results achieved in spite of:
1- Selling and Marketing expenses are higher because of increased freight prices, in addition to expanding FPC participation in international exhibitions with the aim of increasing its market share in global markets and achieving its export goals.
2- Increase in banking charges because of absence of governmental initiatives in order to minimize the impact of the coronavirus outbreak (Covid-19), particularly the initiative of deferred payment program related to postpone the due payment with no interest.
Certain Comparative figures have been reclassified to be consistent with the presentation of the current period presentation.