Methanol Chemicals Co. announces its Annual Financial Results for the Period Ending on 2020-12-31
| Element List | Current Year | Previous Year | %Change | ||
|---|---|---|---|---|---|
| Sales/Revenue | 495.71 | 527.24 | -5.98 | ||
| Gross Profit (Loss) | -139.17 | 59.46 | - | ||
| Operational Profit (Loss) | -236.42 | -40.64 | 481.742 | ||
| Net Profit (Loss) after Zakat and Tax | -276.09 | -84.08 | 228.365 | ||
| Total Comprehensive Income | -275.28 | -87.23 | 215.579 | ||
| Total Share Holders Equity (after Deducting Minority Equity) | 778.53 | 1,053.81 | -26.122 | ||
| Profit (Loss) per Share | -2.29 | -0.7 | |||
| All figures are in (Millions) Saudi Arabia, Riyals | |||||
| Element List | Explanation |
|---|---|
| The reason of the increase (decrease) in the net profit during the current year compared to the last year is | The increase in net loss is mainly due to lower prices of products as a result of the total and partial lockdown in some global markets due to the Covid-19 pandemic. Such lower prices lead to the impairment of certain assets of the Company by SAR 157 million which represents 57% of the net loss of the current year, in addition to the increase in provisions during the current year for the same reasons.
Further, during the first quarter of 2020, the Company conducted scheduled maintenance for two of its plants as announced on Tadawul website on December 29, 2019.
Nonetheless, the Company increased its sales volume in 2020 by around 13% compared to the previous year as well as rationalization of more costs thereby limiting the impact on the losses incurred during the year. |
| Statement of the type of external auditor's report | Unmodified opinion |
| Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor Opinion | N/A |
| Reclassification of Comparison Items | N/A |
| Additional Information | The accumulated losses amounted to SAR 544.5 million as of 31/12/2020 which represents 45.14% of the Company’s share capital of SAR 1,206 million. The main reasons for such losses are attributable to impairment of certain assets during the previous and current periods, which constitutes 59% of the total accumulated losses, in addition to the decline in global prices for certain petrochemical products over the past years due to the slowdown in global demand and the Covid-19 pandemic.
Further, the Company successfully rescheduled its existing loans with a group of banks and with the Saudi Industrial Development Fund (SIDF) as announced on Tadawul website on February 28, 2021 and March 23, 2021 respectively. Such steps would improve the Company’s cash flows and reduce its annual finance costs going forward.
The Company would like to mention that it is continuously following up the progress relating to the procedures of reducing its share capital with the financial advisor (Wasatah Capital) and the Capital Market Authority (CMA) to write off the accumulated losses, and then subsequently increasing it by offering Rights Issue as per the Board of Directors’ recommendation to the General Assembly announced on Tadawul website on 11/10/2020. The Company is also actively pursuing the implementation of the future projects including the expansion of the Methanol plant and establishing the DMDS and MDEA plants as announced on Tadawul website on 2/3/2020, and these projects are expected to yield positive results on the Company’s business and revenues.
The Company will implement the procedures and instructions issued by the Capital Market Authority (CMA) for the listed companies whose accumulated losses exceed 20% of its capital. |
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