Bawan’s financials in line with strategy, growth likely to continue: CFO

Mohammed Al Balawi, CFO of Bawan Co.

Bawan Co.’s financial results for the current period came in line with its strategy that aims to seize available opportunities, and also focuses on market share and operating efficiency, Chief Financial Officer (CFO), Mohammed Al Balawi, told Argaam in a telephone interview.

Speaking about the company’s financial results, Al Balawi explained that the profit growth was mainly spurred by a 42% increase year-on-year (YoY) in revenue.

Moreover, the rise in average selling prices was mainly attributed to higher raw material prices.

Bawan also succeeded in boosting the sales volumes of metal and wood products by 17% and 13% YoY, respectively. It also increased electrical products by 147% YoY, which bolstered profit margins, Al Balawi said, noting that fixed costs are added to the largest number of products, when compared to the corresponding period last year.

The electrical industries segment contributed positively to Bawan’s results, posting a profit of SAR 0.7 million against a loss of SAR 14.2 million a year earlier.

Meanwhile, the metal, wood and plastics segment posted positive profit growth during the same period, Al Balawi added, expecting this growth to continue amid more partnerships with the projects of the Ministry of Housing and other government entities, as well as growing demand for packaging products.

Al Balawi said the company obtained shareholders' approval for stock repurchase, noting that the approval is valid for one year from its issuance date, as per the applicable regulations.

The stock repurchase timing and relevant repurchase value mainly depend on the stock price, and each phase of the repurchase details will be announced in due course.

When asked about the remaining amounts of insurance compensation for Arnon Plastics Industries factory, the top executive said the factory has sufficient insurance coverage of SAR 42.4 million. This includes the coverage for property and equipment worth SAR 28.4 million and coverage for damage and business disruption worth SAR 14 million.

The received amount is part of the existing claim with the insurance company, Al Balawi affirmed, hoping that the remaining amount will be received by the end of this year to show on the company's financial results.

"The company does not have any plans to acquire new companies in 2021," Al Balawi said, when asked about potential acquisitions in H2 2021.

He stressed that Bawan has a strong financial position and cash flows qualifying it for undertaking fresh investments, which will positively boost its financial results.

Bawan posted a net profit of SAR 84.8 million in the first half of 2021, compared to SAR 30.7 million a year earlier. It also reported a net profit of SAR 43.10 million in Q2 2021, Argaam reported