Saudi Ceramic Co. announces the interim financial results for the period ending on 30-09-2017 (Nine Months)

Saudi Ceramics 2040 -0.76% 22.27 -0.17
Element Current quarter Similar quarter for previous year % Change current Previous quarter % Change previous
Net profit (loss) -39,214 -46,883 16.36 -5,148 -661.73
Gross profit (loss) 24,955 54,620 -54.31 65,985 -62.18
Operational profit (loss) -27,244 -9,147 -197.85 7,135 -
All figures are in (Thousands) Saudi Arabia, Riyals
Element Current period Similar period for previous year % Change
Net profit (loss) -32,199 29,398 -
Gross profit (loss) 172,655 284,739 -39.36
Operational profit (loss) -662 95,966 -
Earning or loss per share, Riyals -0.64 0.59 -
All figures are in (Thousands) Saudi Arabia, Riyals
Element EXPLAINATION
Reasons of increase (decrease) for quarter compared with same quarter last year Reasons of (decrease) in net loss of the current quarter compared with the same quarter of previous year was due to increase in other operating revenues, decrease in selling and marketing expenses, decrease in general and administrative expenses, decrease in the net share in loss from associates, decrease in Zakat expense, in addition to that the company had to provide during the same quarter of previous year for impairment in its investment in its associate company Ceramic Pipes Company by 25 million SAR while it was not required in this quarter. On the other hand, the gross margin decreased by drop in the selling prices of part of the company products due to lower market demand in addition to continuous dumping of the local market with the Indian, Chinese, and Spanish products of ceramic tiles and sanitary ware although the company succeeded in increasing its local market share. This is in addition to increase in financing costs charged to statement of profit or loss, and decrease in income from sale of property.
Reasons of increase (decrease) for period compared with same period last year Reasons of net loss for the current period compared with the same period of previous year was due to decrease in sales caused by rescission in the local building materials markets in the period between Eid Alfitr and Eid Aladha and the Hajj season, where the company had to improve its existence in the markets to increase its market share through more coverage and reducing its selling prices for selected products to compete with the low prices caused by dumping of products from certain countries which caused the decrease in gross profit. In addition to decrease in other operating revenues. On the other hand, was decrease in selling and marketing expenses, general and administrative expenses, Zakat expense, the net share in loss from associates, and increase in income from sale of property. In addition to that the company had to provide during the same period of previous year for impairment in its investment in its associate company Ceramic Pipes Company by 25 million SAR while it was not required in this period.
Reasons of increase (decrease) for quarter compared with previous quarter Reasons of increase in net loss for the current quarter compared with the previous quarter are due to decrease in sales caused by rescission in the local building materials markets in the period between Eid Alfitr and Eid Aladha and the Hajj season, where the company had to improve its existence in the markets to increase its market share through more coverage and reducing its selling prices for selected products to compete with the low prices caused by dumping of products from certain countries which caused the decrease in gross profit for the current quarter. This is in addition to decrease in other operating revenues, and increase in Zakat expense. On the other hand, there was decrease in selling and marketing expenses and financing costs charged to statement of profit or loss. And increase in the net share in profit from associates.
Reclassifications in quarterly financial results Figures of the comparative periods were reclassified to be consistent with the accounting policies implemented in the current quarter which are prepared in accordance with International Financial Reporting Standards.
Other notes The company local markets are still suffering from the recession in the building materials markets in the period between Eid Alfitr and Eid Aladha and the Hajj season, in addition to continuity in the dumping by imported products of tiles, porcelain, and sanitary ware, although the company succeeded in increasing its market share through more coverage and reducing its prices for selected products to confront the law prices of duped imported products.Increase in prices of some imported raw materials caused increase in the production cost for some products.The decrease in the exchange rates of some foreign currencies contributed in decreasing the competitiveness of the company products in the international markets like Europe which is considered a main market for the company product of electric water heaters, the same lower exchange rates improved the competitiveness of imported products in the local market.The sales revenue for the current quarter was SR 224 million compared with SR 232 million for same quarter of previous year showing a drop by SR 8 million representing 3%. The sales revenue for the current period was SR 814 million compared with SR 953 million for same period of previous year showing a drop by SR 139 million representing 15%.Total comprehensive loss for the current quarter was SR (38) million compared with comprehensive loss of SR (47) million for same quarter of previous year showing a drop in comprehensive loss of SR 9 million representing 19%, and compared with comprehensive loss of SR (6) million in the previous quarter showing increase in comprehensive loss of SR 32 million representing 533%. Total comprehensive loss of current period was SR (32) million compared with comprehensive income of SR 29 million for same period of previous year showing a drop of SR 61 million representing 210%.Total shareholders equity as at 30/09/2017 was SR 1,739 million compared with SR 1,828 million as at 30/09/2016 showing drop of 5%. (there is no Minority interest). Cash and cash equivalent improved at the end of the period reaching SR 59 million compared with SR 25 million at the beginning of the year increasing by SR 34 million representing 136%, and compared with SR 72 million at the end the of the same period of previous year decreasing by SR 13 million representing 18%.The Company has adopted the International Financial Reporting Standards (IFRS) effective 1 January 2017. Accordingly, some changes in the Company's financial statements have been made in a number of items in the measurement, recognition, presentation and disclosure method for the current and comparative periods in line with the accounting policies adopted according to the requirements of International Financial Reporting Standards (IFRS) adopted in Saudi Arabia and other standards and publications approved by the Saudi Organization for Certified Public Accountants (SOCPA). These changes have been made in Note 2 and Note 7 (Application of International Financial Reporting Standards for the first time) in the notes to the condensed consolidated interim financial statements for the quarter ended 30/09/2017.

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