Anaam Holding achieves SR7 mln net profit during Q3 ‎

Anaam International Holding Group achieved a net profit after zakat and tax in the third quarter of 7.1 million riyals, compared to a loss of 2.5 million riyals in the same quarter of last year. (9months).

The operational profit amounted to 1 million riyals in the third quarter, compared to a loss of 3.2 million riyals in the same quarter of the previous year.

The net profit after zakat and tax in the 9-month period amounted to 8.7 million riyals, compared to a loss of 5 million riyals in the same period last year.

The total shareholders’ equity “without minority rights” amounted to 315.8 million riyals in the current period, compared to 108 million riyals in the same period last year, a growth of 193%.

Earnings per share in the current period amounted to 0.52 riyals, compared to 1.37 riyals 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 the profit realized from discontinued operations as a result of selling the Al-Jouf project last year. However, the company has achieved profits from continuing operations 7.2 million riyals for the current quarter, compared to a loss of 2.6 million riyals for the same quarter of the previous year due to increase in sales for the current quarter by 446% by acquisition of real estate investments during the current year. This had a positive effect, and gross profit has increased by 780% during the current quarter compared to the same quarter of the previous year. As a result of the increase in sales the group has achieved operating profit for the current quarter compared to an operating loss for the same quarter of the previous year, despite the increase in selling and distribution expenses, and administrative and general expenses. Finally, the positive impact on the net profit for the current quarter is also attributed due to increase in gains from revaluation of investment properties.

The reason for achieving a net profit during the current quarter compared to a loss in the previous quarter of the current year is mainly due to the gain from the revaluation of investments at fair value by 8.2 million riyals, compared to a loss of 1 million riyals during the previous quarter. The gross profit increased during the current quarter compared to the previous quarter of this year, mainly due to the increase in additional rental income of the new real estate investment.

The reason for realizing a net profit during the current period compared to a loss for the same period of the previous year is due to the increase in revenues for the newly acquired entities, the revaluation of investment properties and gains from other investments. Sales in the current period increased by 204% as a result of the acquisition of real estate investments during the current year, which had a positive effect and gross profit increased by 228% during the current period compared to the same period of the previous year. Due to increased sales the operational loss decreased for the current period compared to the operating loss for the same period of the previous year despite the increase in selling, distribution, and general and administrative expenses. The increase in the gain from the revaluation of investment properties as well as in other revenues also impacted positively on the net profit for the current period compared to the same period of the previous year.

Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor Opinion:

Emphasis of matters:

We would like to draw attention to the following:

1. As stated in note 4 to the accompanying interim condensed consolidated financial statements, the property, plant, and equipment includes land and building amounting to SR 14 million for which the ownership is not registered in the name of the Group.
2. As stated in note 5 to the accompanying interim condensed consolidated financial statements, the investment property includes land amounting to cost SR 16.8 million of which the ownership is not registered in the name of the Group.

Our conclusion is not modified in respect of these matters.

Other matter

The interim condensed consolidated financial statements of the Group for the three-month and nine-month periods ended 30 September 2021 have been reviewed by another auditor who has issued an unmodified conclusion on those interim condensed consolidated financial statements on 21 November 2021 and the consolidated financial statements for the year ended 31 December 2021 have been audited by the same auditor who has expressed unqualified audit opinion on those consolidated financial statements on 31 March 2022.