According to a bourse filing on The Saudi Stock Exchange Tadawul on February 28, 2023, the net profit increased during 2022 marginally by 0.1% compared to 2021 due to the following:
- Increase in sales quantities of company’s products as a result of increase in plants efficiency and reliability in spite of decrease in profit margin due to decrease in products prices and increase in prices of some feedstock.
- Decrease in finance costs due to decrease in gearing ratio in addition to reduction in General and Administrative expenses and decrease in zakat expenses.
- It should be noted that during last year an impairment loss of SR 160 million was recorded related to cash generating unit of PBT plant when compared the current year with the year 2021.
Statement of the type of external auditor's report Unmodified opinion
Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor Opinion None
Reclassification of Comparison Items
- During 2022, the impairment of non-financial assets relating to 2021 amounting to SR 160.0 million was reclassified from "Other income / (expenses), net" to a separate line item in the consolidated statement of profit or loss, for a more representative presentation of the operating profit.
- The company owns 50% shareholding in Gulf Advance Cable Insulation Company (“GACI”). During 2022, the company re-assessed its position in relation to its control over GACI operations according to IFRS 11 “Joint Arrangements” and accordingly the investment in GACI was accounted using the equity method during 2022. Based on this re-assessment, the Financial Statements for the year 2021 have been re-stated where the investment in GACI was also accounted using the equity method noting that during the year 2021, the plant of Gulf Advanced Cable Insulation Company (GACI) was mothballed in continuation of company’s strategic decisions that targets improving profitability and operations efficiency as previously announced.
- During 2022, the company re-classified shipping and handling costs amounting to SR 222.6 million from “Selling and distribution expenses” to a deduction from “Revenue”. These costs related to transactions where, as per the underlying incoterms, the company is responsible for shipment after control of goods has transferred to the customers.
- Represented provision for precious metals (which used in production) from “Accrued expenses and other current liabilities” to a separate line item in the statement of consolidated financial position.
Additional Information
1. The company managed to reduce the borrowings by end of the year 2022 by SR 2.04 billion compared to end of the year 2021. As a result, the gearing ratio decreased from 34% in 2021 to 20% in 2022.
2. The company distributed during the year 2022 a total dividend of SR 2,358.6 million equivalent to SR 3.25 per share which is considered the highest in the company's history with an increase of SR 722.5 million as compared to the distribution during the year 2021.
3. The net profit for the year 2022 is considered the highest reported since incorporation of the company.
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