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Red Sea International Co. announces the annual financial results for the period ending on 31-12-2017

RED SEA 4230 -0.69% 17.28 -0.12
Element Current year Previous year % Change
Net profit (loss) -65.3 90.3 -
Earning or loss per share, Riyals -1.1 1.5 -
Gross profit (loss) 75.2 263.3 -71.44
Operational profit (loss) -45.5 114.8 -
All figures are in (Millions) Saudi Arabia, Riyals
Reasons of annual financial results There was a Net loss attributable to Shareholders of the Company for the current year as compared to Net profit for the previous year, with decrease in gross profit by SAR 188.1 million arising from reduction in gross profit margin from 25.6% in the previous year to 9.7% in current year and also, drop in building revenues by 27.2% , in rental revenues by 21.7% , and in paint business revenues by 25.8% in comparison to previous year . Furthermore, Gross profit margin was also reduced due to various non-recurring costs and provisions related to anticipated losses on two ongoing projects, increase in provision for slow moving inventory. Also there was increase in tax provisions due to additional tax demands for overseas operations, which the Company has provided for as a matter of prudence. However, Company has implemented cost control measures and has reduced its selling & marketing expenses by 7.8%, General and Administrative expenses by 16.8% and finance charges by 23.5%.
Reclassifications in annual financial results Items, elements and notes of the comparatives Consolidated Financial Statements have been redisplayed, regrouped and reclassified to meet with the applied accounting policies for the current year which have been prepared according to the International Financial Reporting Standards (IFRS) that are endorsed in the Kingdom of Saudi Arabia. For more information, please see the note 5 (First time adoption of IFRS) in the Consolidated Financial Statements for the year ended in 31 December 2017.
Other notes The sales revenue for the current year is SAR 773.1 million as compared to SAR 1,030.4 million during the previous year, which represents a decrease of 25.0%. The Comprehensive loss attributable to Shareholders of the Company for the current year is SAR (69.0) million as compared to as comprehensive income of SAR 80.9 million for the previous year, a decrease in income by 185.3%. The Net Shareholders' Equity (excluding minority interest) at the end of current year is SAR 817.3 million as compared to SAR 931.4 million at the end of previous year, which represents a decrease of 12.3%.