Halwani Brothers records losses of SR23 mln during Q3

Halwani Brothers Company recorded a net loss after zakat and tax in the third quarter of SR23 million, compared to a profit of SR14 million in the same quarter of last year.
This came after the announcement on Monday of the preliminary financial results for the period ending on September 30, 2022 (nine months).
The operational loss amounted to SR10.3 million in the third quarter, compared to a profit of SR23.1 million in the same quarter of the previous year.
The net loss after zakat and tax in the 9-month period amounted to SR5.1 million, compared to a profit of SR65.7 million in the same period last year.
The gross shareholders’ equity “without minority rights” amounted to SR455.7 million in the current period, compared to SR552 million in the same period last year, a decline of 17.4%.
The loss per share in the current period amounted to SR0.14, compared to a profit of SR1.86 in the same period last year.
The reason for the decrease in net profit during the current quarter compared to the same quarter of the previous year is due to:
1) The company’s gross profit decreased by 38% during the current quarter compared to the same quarter of the previous year as a result of the decrease in sales and the increase in raw materials prices within the global inflation that had an impact on most companies.
2) Focusing on expanding sales geographically through optimizing channels and restructuring sales force caused an increased distribution and selling expenses during the current quarter compared to the same quarter of the previous year.
3) The company’s consolidated profits were affected by the devaluation of the currency exchange rate in the subsidiary company in the Arab Republic of Egypt.
4) Increase in general and administrative expenses during the current quarter compared to the same quarter of the previous year.
In light of global developments with the rise in interest rates, the Saudi Central Bank has raised the rate of repo agreements which led to an increase in the cost of financing, and this is in line with the goal of the Saudi Central Bank to sustain monetary and financial stability.
The reason for the decrease in net profit during the current quarter compared to the previous quarter is due to:
1) The company’s gross profit decreased by 33% during the current quarter compared to the previous quarter as a result of the decrease in sales and the increase in discounts granted to customers.
2) Increase in the cost of financing, primarily due to the hike in interest rates implemented by the Saudi Central Bank.
The reason for decrease in the net profit during the current period compared to the same period of the last year due to:
1) The decrease in the gross profit of the company by 21% during the current period compared to the same period of the previous year as a result of the company being affected by the high prices of raw materials costs within the global inflation that had an impact on most companies.
2) Focusing on expanding sales geographically through optimizing channels and restructuring sales force caused an increased distribution and selling expenses during the current period compared to the same period of the last year.
3) The company’s consolidated profits were affected by the devaluation of the currency exchange rate in the subsidiary company in the Arab Republic of Egypt.
4) Increase in general and administrative expenses during the current period compared to the same period of the last year.
5) Increase in the cost of financing, primarily due to the hike in interest rates implemented by the Saudi Central Bank.
The figures in the interim financial statements have been grouped to conform to the accounting policies for the current year presentation as per International Financial Reporting Standard as endorsed in the Kingdom of Saudi Arabia. For more information, refer note 17- Comparative figures in the interim Financial Statements for the period ended 30-09-2022.
Profits per share for the nine months period ended 30/09/2021, 30/09/2022 have been calculated by dividing the net income for the period by 35,357,145 shares (including bonus shares) according to the Extra Ordinary General Assembly’s approval on the Capital increase by way of issuing bonus shares in its meeting dated 28-04-2021.