SPM profits jump 4000% to SR6.2 mln in Q3‎

Saudi Paper Manufacturing Co. (SPM) revealed an increase in net profit after zakat and tax in the third quarter to 6.2 million riyals, compared to 0.15 million riyals in the same quarter of last year, by 4000%. This came after today’s announcement of the preliminary financial results for the period ending on September 30 2022 (nine months).

The operational profit amounted to 12.8 million riyals in the third quarter, compared to 6.2 million riyals in the same quarter of the previous year, a growth of 106%.

The net profit after zakat and tax in the 9-month period amounted to 40.5 million riyals, compared to 29.3 million riyals in the same period last year, an increase of 38.2%.

The total shareholders’ equity “without minority rights” amounted to 253.3 million riyals in the current period, compared to 214 million riyals in the same period last year, an increase of 18.3%.

Earnings per share in the current period reached 2.11 riyals, compared to 1.54 riyals in the same period last year.

The reason for the increase in the company’s net profit during the current quarter compared to the same quarter of the previous year is due to the increase in sales through an increase in the company’s market share and an increase in the growth of demand for its products which led to an improvement in the gross profit percentage.

The reason for the increase in the company’s net profit is also due to the increase in the efficiency of production operations due to the availability of inventory in the company’s warehouses after the company suffered from the crisis of global supply chains that worsened last quarter and which affected it until the beginning of the current quarter. Therefore, the company has made great efforts to provide the requirements of the local market , through building of a stock that covers its needs until the first quarter of 2023 in implementation of the company’s plan to expand to cover the largest area geographically to be able to distribute final products from paper rolls to the finished products.

The reason for the decrease in the company’s net profit during the current quarter compared to the previous quarter is due to the achievement of capital gains in the previous quarter as a result of the sale of one of the lands owned by one of its subsidiaries and increase in financing expenses. This is despite the significant increase in sales as a result of the increase in demand for the company’s products in the current quarter and also the company was keen to reduce general and administrative expenses and sales and distribution expenses.

The reason for the increase in the company’s net profit during the current period compared to the same period of the previous year is due to the significant increase in sales through the increase in the market share of the company and increase in the growth of demand for its products, which contributed to the increase in the value of the gross profit, and capital gains were achieved as a result of the sale of one of the lands owned by a subsidiary, despite the crisis of global supply chains that have worsened in the current period and the shortage of supply of pulp in the global markets due to the high tensions and economic instability globally, which resulted in an unprecedented rise in the prices of pulp and the company has made great efforts to secure the local market need of paper rolls and ready-made product.

In addition, the improvement in the cash flow situation where the net cash generated from operating activities increased by 188% which represent amount SAR 51.7 million, as a result of efficiency in the use of cash in operations, as well as the adequacy of collection performance in spite of increase in sales by 13.9%.

Additional Information:

The company’s revenues for the third quarter of this year amounted to SAR 161.63 million, compared to SAR 141.86 million for the same quarter of the previous year, an increase of 13.9% and compared to the previous quarter of SAR 146.29 million, an increase of 10.5%. Revenue for the current period ended 30 September 2022 (nine months) amounted to SAR 502.62 million, compared to same period of previous year amounted to SAR 441.61 million, an increase of 13.8%.

The total comprehensive income of the company’s owners for the third quarter of this year amounted to a profit of SAR 7.10 million compared to a profit of SAR 0.16 million for the same quarter of the previous year, compared to a profit of SAR 20.63 million for the previous quarter. The total comprehensive income of the company’s owners for the current period ended 30 September 2022 (nine months) also reached a profit of SAR 40.83 million compared to SAR 30.34 million for the same period of the previous year.

Total shareholders’ equity (after excluding minority rights) during the current period ending 30 September 2022 amounted to SAR 253.39 million, compared to SAR 214.05 million for the period ended 30 September 2021, an increase of 18.4% resulting from the achievement of profits during the current period.

The retained earnings as at 30 September 2022 amounted to SAR 65.34 million which constitutes 34% of the capital.

The earnings per share attributable to the shareholders of the company in the current period amounted to a profit of SAR 2.11 compared to the same period of the previous year, which amounted to a profit of SAR 1.54.

The basic earnings per share is calculated by dividing the net profit attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. As per the approval of the Extraordinary General Assembly on 16-12-2020 to increase the company’s capital from ninety-two million SAR (92,000,000) to one hundred and ninety-two million SAR (192,000,000) by subtracting priority rights.

The weighted average number of shares outstanding for the current period is 19,200,000 shares, and the weighted average number of shares outstanding for the same period of the previous year is 19,082,834 shares.