| Reason for increase (decrease) in net profit for current quarter compared to the same quarter of the previous year |
The increase in net profits during the current quarter compared to the same quarter of last year arose primarily from an increase in Distribution Sector revenues by around SAR 10 million after restructuring of sub-distribution contracts and expanding the sales team, General and Adminstrative expesnes droped by around SAR 2.4 million, along with an increase in share of results from associates by around SAR 0.5 million. This was partially offset by increase in distribution sector cost of sales by around SAR 6 million as a result of increase in sales, in this quarter there was an increase in advertising site rental accruals of around SAR 3.5 million mainly as a result of providing for the risk of increased rental charges, in addition to an increase in selling expenses of around SAR 2 million including a provision for slow moving inventory of around SAR 1.2 million, and a drop in other advertising revenues by around SAR 0.7 million, as the Company recognised in the same quarter of last year around SAR 0.7 million. |
| Reason for increase (decrease) in net profit for current quarter compared to the previous quarter |
The increase in net profits during the current quarter compared to the last quarter arose primarily from an increase in Distribution Sector gross profit by around SAR 10 million after restructuring of sub-distribution contracts and expanding the sales team. This increase was partially offset by an increase in advertising site rental accruals of around SAR 2 million mainly as a result of providing for the risk of increased rental charges, in addition to an increase in selling expenses by around SAR 2 million including a provision for slow moving inventory of around SAR 1.2 million, a drop in other revenues by around SAR 4.4 million as the Company recognised in the last quarter service revenues and the release of provisions no longer required of around SAR 4.4 million. |
| Reason for increase (decrease) in net profit for current period compared to the similar period of the previous year |
The decrease in net profits during the current period compared to the same period of last year arose primarily from a net drop in other revenues by around SAR 9 million, with other revenues in the same period of last year of around SAR 14.6 million as a result of the decrease in Company's obligations towards advertising site lease contracts after receiving the final settlements, partially offset by recording other revenues during the current period from services, settlement of credit balances and provisions no longer required of around SAR 5.6 million, in this period there was an increase in advertising site rental accruals of around SAR 3 million mainly as a result of providing for the risk of increased rental charges, in addition to an increase in selling expenses of around SAR 2.4 million including a provision for slow moving inventory of around SAR 1.2 million. In addition, during the same period of last year the Company recognised around SAR 1.1 million as gain from disposal of it's stake in Ad Art Median Company (a subsidiary). This decrease in net profits was partially offset by a reduction on General and Selling expenses by nearly SAR 6 million, an increase in Distribution Sector gross profits of around SAR 4 million and a decrease in Zakat provision of around SAR 2.7 million. |
| Type of the external auditor's opinion |
Qualified opinion |
| External auditor's report containing reservation |
The Auditor 's Report includes the following qualifications: As disclosed in note (5) We have not been able to determine the impact of the non-issuance of the financial statements of the associates. Accordingly, we have relied on the management accounts prepared by the management of the associates. The Group did not recognize any profits or losses on investment in United Advertising Limited Company for the period ended 31 December 2018 and the years ended 2017, 2016 and 2015, and we were unable to obtain adequate and appropriate audit evidence directly or through alternative audit procedures to determine the Group'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. As disclosed in note (2/4) The condensed consolidated financial statements were prepared under the Going Concern concept, but the consecutive losses of some of its subsidiaries and the Group deficit from its operating activities in the statement of cash flows is an indicator of the Group's inability to continue as a going concern , the Group provided to us it's future plans with respect to the collection of its debts and settlements with creditors and revitalization of operational activities. As disclosed in note (3/1/5) 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 have 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: We would like to draw the attention to note (11) in the condensed consolidated Financial statements which states that Tihama Modern Bookstores Company and Tihama International Advertising Company have not submitted Zakat declarations since formation, in addition Istidama International Real Estate Company has not submitted its Zakat declarations for the years since 2013. The management of the subsidiaries have made provisions for Zakat annually, our opinion has not been changed based on the effect of this. |
| Reclassifications in quarter financial result |
Certain comparative figures have been reclassified to conform with the current period presentation. |
| Additional Information |
Earnings per share for the current period were calculated on the net profit attributable to equity holders of the parent company of SAR 3.6 million based on the weighted average number of shares issued as of 31 December 2018 of 7,500,000 shares, the earnings per share for the comparative period of last year was calculated on the net profit attributable to equity holders of the parent company of SAR 4.8 million based on the weighted average number of shares issued as of 31 December 2017 of 7,855,839 shares, on 13 April 2017 the share capital was reduced by canceling 7,500,000 shares, the number of shares issued after the reduction was 7,500,000 shares. |
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