Paper Manufacturing profits decrease to SAR 8.5 million in Q1 by 36%

The Saudi Paper Manufacturing Co. revealed a decline in net profit after zakat and tax in the first quarter to SAR 8.5 million, compared to SAR 13.3 million in the same quarter of last year, by 35.7%. This came after the announcement on Monday of the interim financial results for the period ended on 31.0.2023. (Three months).

The operating profit amounted to SAR 20.1 million riyals in the first quarter, compared to SAR 19.9 million riyals in the same quarter of the previous year, an increase of 0.75%.

The total shareholder equity “without minority rights” amounted to SAR 409.9 million in the current period, compared to SAR 225.6 million in the same period last year, a growth of 81.6%.

Profits per share in the current period reached SAR 0.25, compared to SAR 0.48 in the same period last year.

The reason for the decrease in the company’s net profit during the current quarter compared to the same quarter of the previous year is due to an increase in financing charges by SAR 4.4 million as a result of an increase in financing costs (Sibor).

Despite a significant increase in sales of jumbo rolls and converting products, where sales in the current quarter increased by 11.6% compared to the same quarter of the previous year, which resulted in an increase in the gross profit by 7.6% and also an increase in selling and distribution expenses by SAR 2.4 million.

The company made an effort to consume the relatively high-cost raw material inventory during the current quarter, yet managed to maintain profit margins.

One of the reasons for the decrease in net profit is an increase in the provision pf the allowance for impairment of trade receivables during the current quarter by SAR 1.1 million, and an increase in the provision for Zakat by SAR 438 thousand.

The reason for the increase in the company’s net profit during the current quarter compared to the previous quarter is due to a significant increase in sales by 14.8% as a result of the growing demand for the company’s products and an increase in its market share. This led to an increase in gross profit by 7.4% compared to the previous quarter. The company also succeeded in reducing general and administrative expenses by SAR 1.2 million, which improved the net profit for the current quarter.

The company’s revenues for the current quarter amounted to SAR 217.28 million, compared to SAR 194.70 million for the same quarter of the previous year with an increase of 11.6% ,and compared to the previous quarter of SAR 189.25 million with an increase of 14.8%.

The total comprehensive income of the company’s owners for the current quarter amounted to SAR 8.65 million, compared to SAR 13.01 million profit in the same quarter of the previous year, and compared to SAR 6.09 million profit for the previous quarter.

The total shareholders’ equity (after excluding minority interests) during the current quarter ending on March 31, 2023 amounted to SAR 409.97 million, compared to SAR 225.66 million for the quarter ending on March 31, 2022, an increase of 81.7% resulting from achieving profits during the period

The retained earnings as of March 31, 2023 amounted to SAR 72.36 million, representing 21.5% of the capital.

Profits per share attributable to the company’s shareholders in the current quarter amounted to a profit of SAR 0.25, compared to the same quarter of the previous year, which amounted to a profit of SAR 0.48.

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.

The weighted average number of shares outstanding for the current quarter is 33,700,000 shares, and the weighted average number of shares outstanding for the same period of the previous quarter is 27,690,728 shares.