Saudi Paper Manufacturing to return to profitability on capital increase proceeds, says CEO

Saudi Paper Manufacturing Co. (SPM) will turn into profitability once the firm receives the proceeds from the capital increase, according to its CEO Hassan Al-Assiri.

“We will be able to pay dividends within two to three years as per the company’s plan,” Al-Assiri told CNBC Arabia.

He also noted that the company will use the proceeds to provide liquidity for production processes, and to meet commitments towards banks, which exceed SAR 700 million.

Furthermore, Al-Assiri said the company faces an issue in terms of having sufficient liquidity to buy raw materials, adding that “the only solution for this issue is the capital restructuring.”

“Q3 2019 was promising, but the company aims for better. An improved performance is a result of higher selling prices and slashing production costs coupled with better market conditions,” he mentioned.

Earlier this week, the company posted SAR 16.2 million losses during first nine months of 2019. The company’s board has also amended a capital cut recommendation to 62.45 percent to become SAR 92 million to offset accumulated losses.