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Tihama Advertising and Public Relations Co. announces the interim financial results for the period ending on 30-09-2017 (Six Months)

TAPRCO 4070 1.74% 17.50 0.30
Element Current quarter Similar quarter for previous year % Change current Previous quarter % Change previous
Net profit (loss) 2.2 -22.6 - 1.6 37.5
Gross profit (loss) 8.1 3.26 148.47 4.2 92.86
Operational profit (loss) -4.4 -3.7 -18.92 -4.4 0
All figures are in (Millions) Saudi Arabia, Riyals
Element Current period Similar period for previous year % Change
Net profit (loss) 3.8 -33.7 -
Gross profit (loss) 12.3 -1.4 -
Operational profit (loss) -8.8 -15.9 44.65
Earning or loss per share, Riyals 0.5 -2.2 -
All figures are in (Millions) Saudi Arabia, Riyals
Element EXPLAINATION
Reasons of increase (decrease) for quarter compared with same quarter last year The net profits during the current quarter compared to loss in the same quarter of last year arose from an increase in Advertising sector gross profit by around SAR 9 million as a result of decrease in cost of sales, in addition to increase in other revenues by around SAR 7.9 million as a result of the decrease in Company's obligations for advertising site lease contracts after agreeing the final settlement with Municipalities. During the current quarter the Company recognised around SAR 1.1 million as gain from disposal of it's stake in Ad Art Median Company (a subsidiary). During the same quarter of last year the Company charged the interim consolidated statement of income with SAR 19.6 million as impairment loss in investment in associates . These gains were partially offset by the impact of increase in General and Selling expenses by nearly SAR 5.5 million including provisions of SAR 3.3 million , a decrease in share of profits from associates by around SAR 2.1 million, a decrease of SAR 3 million in Distribution sector gross profit as a result of timing differences in the supply of books to schools and an increase in Zakat provision by around SAR 1.1 million.
Reasons of increase (decrease) for period compared with same period last year The net profits during the current period compared to loss in the same period of last year arose from an increase in Advertising sector gross profit by around SAR 16.5 million as a result of decrease in cost of sales, in addition to increase in other revenues by around SAR 14.6 million as a result of the decrease in Company's obligations for advertising site lease contracts after agreeing the final settlement with Municipalities. During the current period the Company recognised around SAR 1.1 million as gain from disposal of it's stake in Ad Art Median Company (a subsidiary). During the same period of last year the Company charged the interim consolidated statement of income with SAR 19.6 million as impairment loss in investment in associates . These gains were partially offset by the impact of increase in General and Selling expenses by nearly SAR 6.5 million including provisions of SAR 3.3 million, a decrease in share of profits from associates by around SAR 3.6 million, a decrease of SAR 3.4 million in Distribution sector gross profit as a result of timing differences in the supply of books to schools and an increase in Zakat provision by around SAR 1.4 million.
Reasons of increase (decrease) for quarter compared with previous quarter The increase in net profits during the current quarter compared to last quarter arose from an increase in Advertising sector gross profit by around SAR 2.9 million as a result of decrease in cost of sales and an increase in Distribution and Bookstores sectors gross profit by around SAR 0.9 million , in addition to an increase in other revenues by around SAR 1.2 million as a result of the decrease in Company's obligations for advertising site lease contracts after agreeing the final settlement with Municipalities. During the current quarter the Company recognized around SAR 1.1 million as gain from disposal of it's stake in Ad Art Median Company (a subsidiary). in addition to an increase in share of profits from associates by around SAR 0.5 million. These gains were partially offset by the impact of increase in General and Selling expenses by nearly SAR 3.7 million including provisions of SAR 3.3 million and an increase in Zakat provision by around SAR 2.4 million.
External auditor's report containing reservation The Auditor 's Report includes the following qualifications: We have not been able to determine the impact of the non-issuance of the condensed financial statements of the associates. Accordingly, we have relied on the management accounts prepared by the Company's management of the associates, and the Company did not recognize any profits or losses on investment in United Advertising Limited Company for the years ended 2016 and 2015 and the period ended 30 September 2017, and we were unable to obtain adequate and appropriate audit evidence directly or through alternative audit procedures to determine the Company's share of the change in net assets of the entity invested in. Accordingly, we are unable to determine whether any changes to the condensed consolidated financial statements are necessary. The condensed consolidated financial statements were prepared under the Going Concern concept, but the delay in the company renting some Advertising sites and the incurred losses of some of its subsidiaries has led to a deficit in its operational results and of the statement of cash flows for certain subsidiaries such as Tihama Modern Bookstores, Tihama Holding for Commercial Investment, Tihama International Advertising and Istidama International Real Estate Company, the company provided to us it's future plans with respect to the collection of its debts and settlements with creditors and revitalization of operational activities. The Company's current liabilities exceed its current assets by SAR 13,749,824 as at 30 September 2017, this is an indicator of the Company's inability to continue as a going concern. The Management plan is to address these losses and capital deficiency. The condensed consolidated financial statements include an investment in a subsidiary company, International Advertising Services Limited, whose financial statements have not been consolidated as its financial statements has not been issued since the year 2012 due to seizure of the company's operations as of 16 November 2011. We have not been able to obtain sufficient and appropriate audit evidence directly or through alternative audit procedures to determine the validity of the disclosed condensed consolidated financial statements. Accordingly, we are unable to determine whether any changes to the consolidated financial statements are necessary. The Auditor 's Report draws the attention to the following: Some subsidiaries have not yet submitted Zakat declarations such as Tihama Holding for Commercial Investment, Tihama Modern Bookstores Company, Istidama International Real Estate Company and Tihama International Advertising Company. Tihama Distribution Company has not submitted its Zakat declarations for the years since 2014. The management of the subsidiaries has made provisions for Zakat annually.
Reclassifications in quarterly financial results Certain comparative figures have been reclassified to conform with the current period reporting. certain comparative figures were re-stated after the deconsolidation of the financial statements of the International Advertising Services Company.
Other notes Revenues for the quarter ended 30 September 2017 amounted to SAR 15.2 million compared to SAR 27.3 million for the same quarter of last year, a decrease of 44%, revenues for the period ended 30 September 2017 amounted to SAR 29.1 million compared to SAR 40.7 million for the same period of last year, a decrease of 28%. The total shareholders' equity (after excluding the minority interest) as at 30 September 2017 amounted to SAR 58.7 million compared to SAR 69.7 million as at the same period of last year, a decrease of 15.8%. Accumulated losses as of 30 September 2017 amounted to SAR 16.2 million representing 21.7% of the Company's Capital on the same date amounted to SAR 75,000,000. Total comprehensive income for the quarter ended 30 September 2017 was SAR 2.2 million, compared to the total comprehensive loss for the same quarter last year which reached SAR 22.6 million, compared to total comprehensive income for the last quarter amounted to SAR 1.6 million, an increase of 37.5% . Total comprehensive income for the period ended 30 September 2017 was SAR 3.8 million, compared to the total comprehensive loss for the same period last year which reached SAR 33.7 million. Earnings per share for the current period were calculated based on the net profit attributable to equity holders of the parent company amounted to SAR 4 million based on weighted average number of shares issued as of 30 September 2017 of 8,035,714 shares ,as on 13 April 2017 the share capital was reduced by canceling 7,500,000 shares. Loss per share for the comparative period of last year were calculated based on the net loss attributable to equity holders of the parent company amounted to SAR 32.9 million based on weighted average number of shares issued as of 30 September 2016 of 15,000,000 shares . The Company has adopted International Financial Reporting Standards effective 1 April 2017. Accordingly, certain changes have been made in the Company's financial statements in the measurement, presentation and disclosure method for the current and comparative periods in accordance with the accounting policies adopted and in accordance with the requirements of the International Financial Reporting Standards adopted in Saudi Arabia.

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