Aldrees says financial impact of profit margins increase hits SAR 215 mln

Aldrees Petroleum and Transport Services Co. said that the net financial impact of increasing profit margins of fuel stations and other service centers reached SAR 215 million, after setting aside the necessary provisions.

Aldrees also indicated that it started reserving required quantities from Saudi Arabian Oil Co. (Saudi Aramco) with the new profit margin. The company added that it is working up to date with Saudi Aramco to complete the mechanism of receiving the retroactive effect of the margin change as of August 23, 2018.

In a statement to Argaam, Aldrees also attributed robust earnings in 2019 to increased profit margins of fuel stations as well as other services centers.

As for the impact of the COVID-19 on its operations, Aldrees said that sales of Naqel and fuel stations dropped by around 16%, and more than 40% respectively in mid-March,  due to the Kingdom's precautionary measures to curb the COVID-19 outbreak.

"All the company's stations are working around the clock; some stations are closed only for renovation. Workforce was also cut by around 60% in the company's offices in line with the government guidelines amid the COVID-19 outbreak," the company added.

Aldrees also highlighted that the board's recommendation on a 15% cash dividend for FY2019 won't be exceptional.

Aldrees' net earnings jumped to SAR 291.7 million in 2019, compared to SAR 66.9 million in 2018, Argaam reported.