NADEC achieves net profit of SR 95.5 mln at the end of 2022

The National Agricultural Development Company “NADEC” recorded a net profit after zakat and tax during the year ending on December 31, at SR 95.5 million, compared to a loss of SR 285 million in the year 2021, and this came after today’s announcement of the annual financial results ending on 12-31-2022.

The operating profit for the current year reached SR 147 million as compared to an operating loss of SR 213.32 million last year.

The gross profit for the current year reached SR 808 million as compared to SAR 630.84 million last year, with an increase of 28%.

The earnings per share for the current year reached SR 0.94 as compared to the loss per share of SR 2.80 last year.

The reasons for the Company’s net profit of SR 95.49 million in the current year compared to a net loss of SR 285.03 million for the previous year:

Revenue:

The Company’s revenue for the current year increased by 18.57% compared to the previous year, which is mainly on account of an increase in the sales of dairy and food processing by 19.08% and the agricultural sector by 7.76%.

Cost of sales:

Cost of sales percentage on revenue decreased during the current year by 2.24% as compared to last year, which is mainly on account of the decrease in provision for slow/non-moving inventories. During last year the company made SR 46.89 million for slow/ non-moving inventories compared to SR 17.38 million during the current year.

General and Administrative expenses:

The general and administrative expenses for the current year decreased by 6.12% compared to the last year due to a decrease in professional and consultancy fees, and this decrease is partially offset by an increase in information technology expenses and employee benefit expenses.

Provisions for prepayments and other receivables:

During the last year, the provision of SR 64.95 million for subsidy receivables and prepayments was compared to SR 7.1 million for the current year.

other income/ (expenses) – net:

The decrease in other expenses is mainly on account of a reduction in loss on sales of cows due to less culling of cows and a reduction in losses on transactions of foreign currency balances.

Write off/ Impairment losses on Property, Plant and Equipment

During the last year, the Company the management has performed physical verification of fixed assets with external consultants. As a result of physical verification, the management has written off/impaired PPE and Capital work in progress worth SR 83.67 million as compared to the current year write-off/ impairment of losses of SR 10.00 million.

Zakat expenses:

During the last year, the provision of SR 33.99 million was made based on the assessment order received from ZATCA for earlier years and no such provisions were made in the current year.

Despite the changes in preceding elements that positively impacted the profitability of the Company in the current year, there are other elements which have negatively impacted the Company, as follows:

Selling and Marketing expenses:

Selling and marketing expenses increased in the current year as compared to last year by 0.88% due to the increase in the distribution cost, and this increase was partially offset by less spending on marketing activities and promotional expenses.

Finance cost:

Finance costs increased in the current year as compared to last year by 52.55%, mainly on account of an increase in the interest rates due to an Increase in SIBOR as compared to last year.

Statement of the type of external auditor’s report Unmodified opinion

Reclassification of Comparison Items: Please see note 37 in the financial statements for the year ended 31 December 2022.

1- The comprehensive income for the current year reached SR 99.33 million as compared to comprehensive loss of SR 282.47 million last year with an increase of 135.17%.

2- The net profit for the current year reached SR 95.49 million as compared to the net loss of SR 285.03 million last year with an increase of 133.50%.

3- Total revenue for the current year reached SAR 2,694.25 million as compared to SR 2,272.32 million last year with an increase of 18.57%.

4- The gross profit for the current year reached SAR 808.33 million as compared to SR 630.84 million last year with an increase of 28.14%.

5- The operating profit for the current year reached SAR 147.03 million as compared to operating loss of SR 213.32 million last year with an increase of 168.92%.

6- The shareholders’ equity as of 31 December 2022 (no minority equity) was SR 1,295.15 million as compared to SR 1,195.81 million as of 31 December 2021 with an increase of 8.31%.

7- The earnings per share for the current year reached SAR 0.94 as compared to loss per share of SR 2.80 last year.