NADEC profits jump 764.4% during Q3 to 27.7 mln

The National Agricultural Development Company “NADEC” revealed that the net profit after zakat and tax in the third quarter increased to SR27.7 million, compared to SR3.2 million in the same quarter of last year, at a rate of 764.4%.
This came after today’s announcement of the preliminary financial results for the period ending on September 30, 2022 (nine months).
The operating profit amounted to SR42 million in the third quarter, compared to SR13.2 million in the same quarter of the previous year, an increase of 218.4%.
The net profit after zakat and tax in the 9-month period amounted to SR70.3 million, compared to a loss of SR7.7 million in the same period last year.
The gross shareholders’ equity “without minority rights” amounted to SR1.26 billion in the current period, compared to SR1.47 billion in the same period last year, a decrease of 13.8%.
Profits per share in the current period amounted to SR0.69, compared to a loss of SR0.08 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:
The Company’s net profit in the current quarter reached to SR27.75 million compared to net profit of SR3.21 million for a similar quarter last year due to:
– Revenue:
The Company’s revenue for the current quarter increased by 15.05% compared to a similar quarter last year, this was mainly on account of an increase in sales of the dairy and food processing sector by 17.74% this increase was partially offset by the decrease in sales of Agri sector by 38.68%
– Cost of sales:
The cost of sales percentage on revenue decreased during the current quarter by 1.79% compared to a similar quarter last year mainly on account of the increase in sales.
– Other income/expenses (net):
Other expenses decrease in the current quarter by 40.08% compared to a similar quarter last year mainly on account of the decrease in loss on the culling of the cows.
Despite the changes in preceding elements that positively impacted the net profit of the Company in the current quarter, there are other elements that negatively impacted the net profit of the current quarter as follows:
-Selling and marketing expenses:
Selling and marketing expenses increased by 6.12% in the current quarter compared to a similar quarter last year mainly on account of an increase in government fees and an increase in distribution cost.
– General and Administrative expenses:
General and administrative expenses increased in the current quarter by 26.13% compared to a similar quarter last year mainly on account of an increase in Information Technology expenses.
-Finance cost:
Finance costs increased in the current quarter by 50.72% compared to a similar quarter last year due to the increase in the interest rates because of the increase in SIBOR.
All the above elements collectively impacted the gross profit and operating profit as follows:
-Gross profit:
Gross profit of the current quarter increased by 22.00% compared to a similar quarter last year, due to the increase in the revenue by 15.05% and a decrease in the percentage of the cost of sales over the net revenue of 1.79%.
-Operating profit:
Operating profit of the current quarter increased by 218.38% compared to a similar quarter last year primarily due to an increase in sales, a decrease in the cost of sales percentage over revenue, and this increase was partially offset by the increase in selling & marketing expenses and general & admin expenses.
The reason for the increase (decrease) in the net profit during the current quarter compared to the previous quarter of the current year is:
The increase in Company’s net profit in the current quarter compared to the previous quarter by SR 0.26 million was due to:
– Cost of sales:
The cost of sales percentage on revenue decreased during the current quarter by 4.33% compared to the previous quarter. In the previous quarter, there was a loss in the plantation of Agri crops due to climatic changes, and similar losses were not there in the current quarter.
On the other hand, the below elements had a negative impact on the net profit of the current quarter compared to the previous quarter:
– Revenue:
The Company’s revenue for the current quarter decreased by 0.72% compared to the previous quarter was mainly on account of decrease in sale of Agri sectors by 64.58% and this decrease was partially offset by increase in sale of dairy and food processing sector.