Takween says provisions hit SAR 52 mln, focus on value-added products

Takween Chairman Abdulmohsen Al-Othman

Takween Advanced Industries Co.'s provisions stood at SAR 52 million, covering all doubtful debts, Chairman Abdulmohsen Al-Othman told CNBC Arabia.

He added that the company managed to make a major shift over the last years to overcome the difficult conditions, through reducing expenses, improving profit margins, and expanding customer base. Thus, the firm turned profitable in Q1 2021.

As per its strategy, Takween will continue to reduce expenses, as well as improve and diversify sales, in addition to focusing on value-added products, the Chairman said.

Commenting on China-based JOFO Nonwoven Co. Ltd.'s acquisition of a 70% stake in Takween's subsidiary, Advanced Fabrics (SAAF), Al-Othman said the cash proceeds will be used in early repayment of due debts and development of other segments.

The Tadawul-listed firm is negotiating with banks to roll over the outstanding loans or keeping the existing loans and cancelling the short-term ones, which will be announced over the next weeks.

The petrochemical prices are mainly subject to supply and demand, the official said, when asked about the impact of high inflation rate on the company's sales prices.

"The prices of petrochemical raw materials normally rise amid the improvement of global economy and demand growth, leading to an increase in the prices of materials sold by the company," the official said.

The Tadawul-listed firm was expanding even amid tough conditions, as it changed the existing assets to compete with the global manufacturers.

The company will continue expanding amid increase in liquidity, Al-Othman noted.

Takween announced, today, July 7, finalizing the terms related to JOFO Nonwoven’s acquisition of 70% of its subsidiary, SAAF, for SAR 337.5 million.

The deal net capital gains, excluding written-off debts due to Takween, reached SAR 62.9 million as net result in the statement of income, according to data compiled by Argaam.