‎“Zamil Industrial” records losses of 33.1 million riyals during Q3‎

Zamil Industrial Investment Company recorded a net loss after zakat and tax in the third quarter of 33.1 million riyals, compared to a profit of 2.4 million riyals in the same quarter of last year. This came after today’s announcement of the preliminary financial results for the period ending on September 30, 2023 (nine months).

Operating profit reached 663 thousand riyals in the third quarter, compared to 33.5 million riyals in the same quarter of the previous year, a decrease of 98%.

The net loss after zakat and tax in the 9-month period amounted to 231 million riyals, compared to 78.4 million riyals in the same period last year, an increase of 194.4%.

Total shareholders’ equity (excluding minority rights) amounted to 530.3 million riyals in the current period, compared to 870.7 million riyals in the same period last year, a decrease of 39%.

The loss per share in the current period reached 3.85 riyals, compared to 1.35 riyals in the same period last year.

-The increase in net loss in the current quarter is due to:

1) An increase in financing costs by 20.1 million riyals

2) An increase in zakat and tax allocations by 6.2 million riyals

3) An increase in the provision for doubtful debts by 18.8 million riyals

However, the effect of the above is partially offset by the following:

1) Increased sales in the iron and insulation sectors

2) An increase in gross profit and operating profits in the iron and insulation sectors

-The reason for the decrease in net loss in net profit during the current quarter compared to the previous quarter is due to:

1) Increased sales in all sectors

2) Increase in overall profits in all sectors

3) Improvement in operating profit margins in the air conditioning sector

4) Other revenues increased by 9.8 million riyals

5) Increase in shares in the results of associate companies and strategic partnerships by 8.1 million riyals.

6) There is no exceptional provision compared to the inventory allocation of 162.8 million riyals for the loss resulting from the fire in the air conditioning factory that occurred in the previous period of the current year.

The reason for the increase in net loss in net profit during the current period compared to the similar period of the previous year is due to:

1) Inventory provision amounting to 162.8 million riyals as a result of the damage resulting from the fire.

2) An increase in financing costs by 69.2 million riyals

3) An increase in zakat and tax allocations by 14.3 million riyals

4) An increase in the provision for doubtful debts by 29.3 million riyals

5) Decrease in the value of non-current assets by 8.2 million riyals

However, the effect of the above is partially offset by the following:

1) Increased sales in all sectors

2) Improvement in gross profit margins in the iron and insulation sectors

3) Improvement in operating profit margins in the iron and insulation sectors

4) An increase in income from discontinued operations by 43 million riyals

5) Increased shares in the results of associate companies and strategic partnerships by 16.8 million riyals.

– It is worth noting the following important notes:

1) Consolidated sales during the period across all segments increased by 18.3% (Air conditioning = 5.8%, iron = 24.5%, insulation = 48.5%).

2) Operating profit during the period, excluding exceptional allocations, amounted to 29.5 million riyals, compared to a profit of 3.7 million riyals.

3) During the period, the company recorded a provision in the amount of 162.8 million riyals for damaged inventory due to the fire that occurred in one of the factories of Zamil Air Conditioners and Home Appliances Company (a subsidiary) on March 3, 2023 AD. The company has comprehensive insurance cover to reduce the risks of these losses. During the period, the company submitted a compensation claim, and is fully confident that the settlement from the insurance company will be sufficient to cover the losses resulting from the fire.

4) During the period, the company’s extraordinary general assembly, held on September 28, 2023, approved the Board of Directors’ recommendation to use part of the statutory reserve amounting to 180,000,000 riyals to fully extinguish the company’s accumulated losses amounting to 169,253,000 riyals, which represents 28.2% of capital, as in the financial statements for the period ending on June 30, 2023 AD.

As a result, the accumulated losses as of September 30, 2023 amounted to 33.1 million riyals, which represents 5.53% of the capital.