“Tabuk Agricultural” achieves a net profit of 81 million riyals during 2023

Tabuk Agricultural Development Company recorded a net profit of 81 million riyals during the year ending on December 31, 2023, compared to a loss of 54 million riyals in the year 2022. This came after today’s announcement of the annual financial results ending on December 31, 2023.

The operating loss amounted to 62 million riyals during the year ending December 31, 2023, compared to a loss of 43 million riyals in the year before last, an increase of 45%.

Earnings per share last year amounted to 2.07 riyals, compared to a loss of 1.37 riyals in the year before last.

The reason for the decrease in revenues during this year compared to the previous year is due to the exclusion of the sales of a subsidiary company for the fourth quarter of 2023 AD due to its transformation from a subsidiary company to an associated company due to the loss of control over it during the third quarter of 2023 AD, in addition to the decrease in the revenues of one of the other subsidiary companies.

The reason for the decrease in net losses and the achievement of net profits is due to the increase in the group’s share of profits from investments in companies using the equity method and the decrease in the provision for expected credit losses.

Statement of the type of auditor’s report: unmodified opinion

Any observation contained in the auditor’s report, represented by a paragraph of another matter, reservation, drawing attention, refraining from expressing an opinion, or an opposing opinion, as stated in the auditor’s report, drew attention.

As shown in Note No. (3) of the consolidated financial statements, the group’s consolidated financial statements include the financial statements of Agricultural Feed Sources Company, a “subsidiary company.” The legal procedures for transferring ownership of assets and all operational operations to Agricultural Feed Sources Company have not been completed in accordance with the assignment agreement signed between the owner The Corporation (one of the partners) and the Agricultural Feed Sources Company, and our opinion has not been modified in relation to this matter, as the total assets of the Agricultural Feed Sources Company included in these consolidated financial statements amounted to 21.7 million Saudi riyals (2022: 26.2 million Saudi riyals) Its total liabilities are 22.8 million Saudi riyals (2022: 24.4 million Saudi riyals), its revenues are 0.1 million Saudi riyals (2022: 1.5 million Saudi riyals), and its total expenses are 5 million Saudi riyals (2022: 16, 1 million Saudi riyals).

We would like to draw attention to Note No. (32) of the consolidated financial statements, which indicates that the total accumulated losses of the group amounted to 63,184,610 Saudi riyals, representing 16.1% of the capital (2022 AD: 163,094,500 Saudi riyals, representing 41.6% of the capital. The group’s current liabilities exceeded its current assets, which led to a deficit in working capital amounting to 80,890,978 Saudi riyals. The group also achieved net cash from operating activities in the negative amount of 13,830,429 Saudi riyals (2022: 17,568,214 Saudi riyals). However, the group relies primarily on the success of implementing plans. The group’s business is to generate sufficient cash flows to enable it to meet its obligations when they fall due and continue its operations without a major deficit. The group’s management believes that the group’s consolidated financial statements have been prepared on the basis of continuity and that there is no decline in the value of assets. These matters, along with other matters described in Note No. (32), indicate the existence of cases of material uncertainty and decline in the value of assets, which could indicate the existence of significant doubt about the group’s ability to continue its business. Our opinion has not been modified in respect of this matter.

Reclassification of some comparative figures Some comparative figures have been reclassified to be consistent with the current presentation of the lists.

Additional information Earnings per share

Basic and diluted earnings per share are calculated by dividing the profit attributable to the group’s shareholders by the weighted average number of shares during the year.

The weighted average number of ordinary shares used as a denominator in calculating basic and diluted earnings per share amounted to 39,176,700 shares, and basic and diluted earnings per ordinary share from continuing operations amounted to 2.07 riyals, compared to a loss per share of (1.37) from the previous comparative year.

Later events

On Thursday, March 7, 2024 AD, the official currency of the country in which the sister company’s equity-accounted company operates, “Rakhaa Agricultural Investment and Development” Company, was reduced, which led to a reduction in the official currency of that country against the Saudi riyal by 55% from the levels applied in December 31, 2023 AD, which may affect the value of the investment in that company in the subsequent period compared to the date of the consolidated financial statements as follows:

The investment balance as of December 31, 2023 is 12,112,966 Saudi riyals.

The investment balance as of March 7, 2024 amounted to 5,438,910 Saudi riyals.

The effect of the change in the exchange rate is a loss amounting to (6,674,056) Saudi riyals.

The value of the accumulated losses as of 12/31/2023 amounted to 63.2 million Saudi riyals, which is equivalent to 16.1% of the company’s capital amounting to 391.767 million Saudi riyals. The date these losses were reached was 12/31/2023 AD, as the main reasons are: For these accumulated losses, the decline in the value of the property, machinery and equipment of a subsidiary company, the recording of an allowance for expected credit losses related to government grants from the Ministry of Finance due to one of the subsidiary companies, the amortization of the costs of issuing equity instruments, the increase in the cost of sales, the increase in administrative and general expenses, and the increase in selling and distribution expenses.