Red Sea to develop plan to offset accumulated losses, says CEO

Red Sea International Co.’s board of directors gave instructions about studying various measures to map out a plan to offset accumulated losses in the short and long-term, CEO Tareq Telmesani told Argaam in an exclusive.

“The company will act according to the new plan, after the board’s approval. The Capital Market Authority (CMA) will be notified of all measures, as per the applicable law,” Telmesani said.

The majority of companies were pressured by the COVID-19 pandemic, mainly in the oil and gas sector – Red Sea’s main customers, Telmesani explained, adding that those companies postponed new projects and halted some of the existing ones.

“Though these impacts are related to third-party issues, they had mostly hit the company’s Q2 2020 financial results, especially the branches located outside the Kingdom,” he added.

Answering a question about Red Sea’s divestment plans, the CEO said divestments were among options on the agenda. Available options will be considered in affiliates and associates, and proposals will be submitted to the board for every single facility.

Red Sea widened H1 2020 net losses to SAR 52.4 million, from SAR 45.5 million a year earlier, Argaam reported.

Accumulated losses reached SAR 140.4 million, or 23.4% of capital by the end of H1 2020.