A look at Red Sea results, operating performance in Q4 2019

Red Sea International Company reported in Q4 2019 its first quarterly earnings in three years, data compiled by Argaam showed.

These earnings were mainly driven by the modular buildings manufacturing segment, which reported net profit of SAR 18.9 million in Q4 2019, versus net losses of SAR 10.1 million in year-earlier period.

The segment recorded its five-year highest sales revenue of SAR 160.8 million in Q4 2019, up by around four-fold year-on-year (YoY) and by 80% quarter-on-quarter (QoQ).

The segment's net profit margins reached 11.8% in Q4; the highest since 2014.

The property leasing business division reported SAR 3.1 million in net earnings for the three-month period, versus net losses at SAR 30,000 on lower operating expenses.

These earnings came despite a 23% revenue fall YoY to SAR 52.2 million.

Paints extended its losing streak, incurring SAR 8.2 million in losses in Q4 2019, widening by 74% YoY, as its 81%-owned subsidiary, Premier Paints Co. recorded SAR 5 million in losses from goodwill impairment.

* Include losses of SAR 5 million resulting from a decrease in intangible assets’ value of the goodwill item.

The company’s total sales revenue leveled up by 89% YoY to SAR 228.9 million by the end of Q4 2019.

Operating expenses also declined by 40% YoY and nearly 19% QoQ to SAR 21 million in Q4 2019.

Cost of finance increased by SAR 2.7 million YoY to SAR 4.1 million in Q4.

*Includes a decrease in property and equipment value worth SAR 6.4 million, and losses in real estate investment value of SAR 5.4 million.

**A decrease in intangible assets’ value of the goodwill item (Premier Paint Co.)

Sales revenue from Saudi operations jumped by 51% YoY and 67% QoQ to SAR 173.8 million in Q4 2019.

The Saudi real estate developer said it is currently in talks to sell its stake in Papua Guinea and Housing Co., and the deal is expected to be complete by end of month.

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