Saudi Ground Services Co. announces its Interim Financial Results for the Period Ending on 2020-06-30 ( Six Months )
| Element List | Current Quarter | Similar quarter for previous year | %Change | Previous Quarter | % Change |
|---|---|---|---|---|---|
| Sales/Revenue | 115,094 | 648,023 | -82.239 | 512,170 | -77.528 |
| Gross Profit (Loss) | -136,403 | 194,299 | - | 100,644 | - |
| Operational Profit (Loss) | -196,118 | 125,224 | - | -8,194 | 2,293.434 |
| Net Profit (Loss) after Zakat and Tax | -197,870 | 123,860 | - | -51,542 | 283.9 |
| Total Comprehensive Income | -197,870 | 123,860 | - | -51,542 | 283.9 |
| All figures are in (Thousands) Saudi Arabia, Riyals | |||||
| Element List | Current Period | Similar period for previous year | %Change |
|---|---|---|---|
| Sales/Revenue | 627,264 | 1,257,093 | -50.102 |
| Gross Profit (Loss) | -35,579 | 367,446 | - |
| Operational Profit (Loss) | -204,312 | 231,521 | - |
| Net Profit (Loss) after Zakat and Tax | -249,412 | 227,976 | - |
| Total Comprehensive Income | -249,412 | 227,976 | - |
| Total Share Holders Equity (after Deducting Minority Equity) | 2,696,476 | 2,939,605 | -8.27 |
| Profit (Loss) per Share | -1.33 | 1.21 | |
| All figures are in (Thousands) Saudi Arabia, Riyals | |||
| Element List | Explanation |
|---|---|
| Increase (Decrease) in Net Profit for Current Quarter Compared to the Same Quarter of the Previous Year is Attributed to | The current quarter recorded a net loss of SAR 197.9 million due to the suspension of majority of flights as a result of the precautionary measures taken by the government on the outbreak of COVID-19 with the exception of evacuation flights and the return of domestic air traffic at the beginning of June which has not exceeded 18% of the volume of operations before the pandemic which led to a direct impact on the company's operations with a decrease in revenue by 83% (amounting to SAR 532.9 million). The COVID-19 has indirectly impacted the equity accounted investment resulting in a loss amounting to SAR 8.9 million compared to same quarter of last year.
Despite the challenges faced by the company in the pandemic, the company has executed several initiatives aimed at increasing the efficiency of operation and thus reducing the impact of the pandemic on company’s profitability by ensuring its continuity and competitiveness are achieved which led to a reduction in costs of SAR 210 million in the current quarter (Out of which permanent cost reduced by SAR 31 million per quarter) which contributed to reducing losses to reach SAR 197.9 million (out of losses that were estimated at SAR 407.9 million in the absence of these initiatives) which is reflected in the decrease in operating costs and administrative expense by SAR 202.2 million and SAR 7.8 million respectively.
In addition to cost reduction initiatives, the company has taken certain initiatives such as the opportunity to increase sales by providing disinfection services for aircraft in addition to other services whose sales exceeded by SAR 32 million which also contributed to reducing the impact of the pandemic on the company's profitability. |
| Increase (Decrease) in Net Profit for Current Quarter Compared to the Previous Quarter is Attributed to | The current quarter recorded a net loss of SAR 197.9 million due to the suspension of majority of the flights as a result of the precautionary measures taken by the government on the outbreak of COVID-19 with the exception of evacuation flights and the return of domestic air traffic at the beginning of June which has not to exceeded 18% of the volume of operations before the pandemic which led to a direct impact on the company's operations with a decrease in revenue by 77.5% (amounting to SAR 397.1 million). The unrealized gain from FVTPL investment showed an improvement of SAR 31.9 million and the loss from equity accounted investment reduced by SAR 9.7 million in comparison to previous quarter
Despite the challenges faced by the company in light of the pandemic, the company has executed several initiatives aimed at increasing the efficiency of operation and thus reducing the impact of the pandemic on company’s profitability and ensuring its continuity and competitiveness are achieved which led to a reduction in costs of SAR 168.3 million for this quarter (Out of which permanent cost reduced by SAR 31 million per quarter) which contributed to reducing losses to SAR 197.9 million (out of losses that were estimated at 407.9 million riyals if these initiatives were not achieved) which is reflected in the decrease in operating costs and administrative expense by SAR 160 million and SAR 8.3 million respectively. Moreover, the impairment loss recorded an amount of SAR 11.7 million in the current quarter which is a reduction of SAR 41.1 million compared to the previous quarter.
In addition to cost reduction initiatives, the company has taken certain initiatives such as the opportunity to increase sales by providing disinfection services for aircraft in addition to other services whose sales exceeded by SAR 32 million which also contributed to reducing the impact of the pandemic on the company's profitability. |
| Increase (Decrease) in Net Profit for Current Period Compared to the Similar Period of the Previous Year is Attributed to | The current period recorded a net loss of SAR 249.4 due to the suspension of majority of the flights as a result of the precautionary measures taken by the government on the outbreak of COVID-19 with the exception of evacuation flights and the return of domestic air traffic at the beginning of June which has not to exceeded 18% of the volume of operations before the pandemic which led to a direct impact on the company's operations with a decrease in revenue by 50% amounting to SAR 629.8 million and had impacted the impairment loss on trade receivables to increase by SAR 45.1 million in the current period. The COVID-19 pandemic indirectly affected investment in equity which contributed to a loss of SAR 28.3 million and also affected the fair value investment through profit or loss which was reflected in the increase in net unrealized loss of SAR 16.4 million.
Despite the challenges faced by the company in light of the pandemic, the company has executed several initiatives aimed at increasing the efficiency of operation and thus reducing the impact of the pandemic on company’s profitability and ensuring its continuity and competitiveness are achieved which led to a reduction in costs of SAR 239.3 million for the current period (Out of which permanent cost reduced by SAR 31 million per quarter) which contributed to reducing losses to 249.4 million riyals (out of losses that were estimated at SAR 488.7 million if these initiatives were not achieved which is reflected in the decrease in operating costs and administrative expense by SAR 226.6 million and SAR 12.7 million respectively.
In addition to cost reduction initiatives, the company has taken certain initiatives such as the opportunity to increase sales by providing disinfection services for aircraft in addition to other services whose sales exceeded by SAR 32 million which also contributed to reducing the impact of the pandemic on the company's profitability. |
| Basis of the External Auditor's Opinion | Unmodified opinion |
| Reclassification of Comparison Items | Certain comparative amounts have been reclassified to conform to the current period’s presentation. |
| Additional Information | 1) With the outbreak of COVID-19 and the suspension of domestic and international commercial flights from mid-March 2020 as a result of precautionary measures taken by the government, the company's management has formed an executive committee for business continuity which developed several initiatives to reduce the financial impacts of the COVID-19 pandemic, and its impact on expected financial results and associated cash flows. The committee presented initiatives to increase the efficiency of operation which would reduce costs without affecting the company's ability to restore its operational status in the event of lifting the flight suspension, and to reduce the precautionary measures taken by the official authorities to limit the spread of Corona virus. It is worth noting that initiatives to increase operating efficiency and reduce costs have been limited to approximately SAR 520 million (including approximately SAR 120 million of costs that will be reduced permanently), of which approximately SAR 239.3 million have been achieved until the end of the current period, and the company will continue to achieve the remainder during the second half of the year to reduce the impact of the pandemic on the company's profitability and ensure its continuity.
2) Domestic flights began to return gradually in the beginning of June, bringing the volume of operations at the end of the current period to 18% compared to before the pandemic.
3) Total revenue for the current quarter amounted to SAR 115.1 million compared to SAR 648 million for the same quarter of the previous year which is a decrease of 82.2%. The net loss for the current quarter amounts to SAR 197.9 million compared to net profit of SAR 123.9 million for the same quarter last year which is a decrease of 259.8%. The net loss for the current quarter is SAR 197.9 million compared to net loss of SAR 51.5 million for the previous quarter which is an increase of 283.9%. The comprehensive loss for the current period SAR 249.4 million compared to comprehensive income of SAR 227.9 million for the same period last year which is a decrease of 209.4%. The Company has no minority interest with total shareholders' equity reaching to SAR 2,696.5 million for the current period compared to SAR 2,939.6 million for the same period last year which is a decrease of 8.3% |
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