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Al Hassan Ghazi Ibrahim Shaker Co. announces the consolidated annual financial results for the period ending on 31-12-2017

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Element Current year Previous year % Change
Net profit (loss) -171,039 48,817 -
Earning or loss per share, Riyals -2.71 0.77 -
Gross profit (loss) 175,948 388,926 -54.76
Operational profit (loss) -153,472 58,717 -
All figures are in (Thousands) Saudi Arabia, Riyals
Element EXPLAINATION
Reasons of annual financial results The loss at both net and operational profits levels compared to profit in corresponding period, and the decline of the gross profit level is attributed to the following: 1) drop in sales by %37.2 and increase in the cost of sales percentage due to the increase in the inventory provision, compared with the level of sales achieved in the same period last year as a result of the decrease of the market demand and the strong competition which were the reason for the decrease in the profit margin and the decline of the gross profit level by 54.8%. 2) Increase in the other expenses by SR 38 Million as a result of additional provisions for impairment of trade receivables during the current period. 3) The selling and distribution did not drop in its percentage at close to the same percentage of the drop in sales, in order to stimulate sales and Part of the expenses are associated with the advertising campaign to launch LG new generation of air conditioners (dual inverter) in the Kingdom, which is highly efficient in energy saving. 4) Decrease in share of results of associates by SR 3.6 Million and an increase in the financial charges by SR 3.7 despite the drop in the general and administrative expenses by 17.4% during the current period as compared to the corresponding period. The corresponding period also included an increase in the amount of other income due to disposable assets and the reversal of provisions that are no longer needed.
Reclassifications in annual financial results Items, elements and notes of the comparative Condensed Consolidated Interim Financial Statements have been disclosed, regrouped and reclassified to meet with the applied accounting policies for the current period 2017, 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 2 and note 35 (First Time adoption of IFRS) in the Consolidated Financial Statements for the period ended in 31/12/2017.
Other notes The total revenue for the current period amounted to SAR 1,038 Million compared to the same period last year of SAR 1,654 Million with a decrease of 37.2%. The total shareholders equity (excluding minority interests) at 2017 amounted to SAR 874,4 Million compared to SAR 1,044 Million at the end of 2016, with a decrease of 16.3%. The total comprehensive losses for the current period amounted to SAR 169,8 Million while the total comprehensive profit for the same period last year was SAR 49.5 Million. While the returned earnings as of 31/12/2017 amounted to 103,4 Million which is 16.4% of the share capital. The company has adopted the international financial reporting standards starting as of 1 January 2017, and according to that some changes have been made in the financial statements of the company on some items in the method of measurement,recognition ,presentation and disclosure for the current period and the comparative period in accordance with the accounting policies adopted according with the requirements of international financial reporting standards adopted in the kingdom of Saudi Arabia . It is worth mentioning here, that the Company has continued to monitor its performance and improve the efficiency of its operations through optimizing and controlling the expenses and spending and improving its working capital to enhance the financial performance of the Company.

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