SISCO eyes increasing ports segment's terminal capacity to 5.2 mln TEUs in Q3 2022

Logo of Saudi Industrial Services Co. (SISCO)

Saudi Industrial Services Co. (SISCO) is planning to raise the capacity of the ports segment to 5.2 million twenty-foot equivalent units (TEUs) in the third quarter of the year, from the current range of up to 4.8 million TEUs, under the first phase of the new franchise agreement. 

A recovery in the terminal handling segment may help the sector return to levels close to the second half of 2021, the company told Argaam at an investor conference.

Revenue was hit by the continued disruptions in global supply chains, which were aggravated due to the COVID-19 restrictions reimposed in China, in addition to the two-month shutdown of Kindasa Water Services Co.

The temporary decline in production from Kindasa for two months in the first quarter of 2022 battered SISCO’s performance. All issues related to lower production were resolved, the Tadawul-listed company noted, expecting revenue to normalize through the rest of the year.

Revenue from the water solutions segment decreased by SAR 7 million year-on-year (YoY) in Q1 2022. The segment also sustained a net loss of SAR 4 million.

SISCO added that it eyes a twofold rise in its revenue to SAR 2 billion by 2025 and an increase of over 12% in returns through organic and inorganic growth, while maintaining strong margins.

The company’s strategy aims at rebalancing its portfolio through raising revenue and net income by 50% through the logistics and water services portfolio.

It added that revenue was largely steady on an annual basis, however, the logistics segment reported higher revenue from warehouses in Q1 2022. This in turn supported expansion in gross profit margins to 43.2% in the three-month period from 36.6% in Q1 2021.

SISCO expected the fourth quarter of the year to see some recovery on the levels of TEUs and the ports segment.

It added that China’s restrictions will affect the seasonality of pilgrimage due to the lack of sufficient TEUs that bring goods to the Kingdom, predicting volumes to be close to the Q2 2022 levels.

For Tawzea, SISCO’s CEO Mohammed Al-Mudarres said the company is finalizing the paperwork required by the Capital Market Authority (CMA), expecting it to announce its share sale in the third or fourth quarter of 2022.

The CEO added that SISCO maintained positive momentum through strategic initiatives despite global challenges in the logistics industry and the temporary decline in its water production.

SISCO’s net profit after Zakat and tax plunged 98% to SAR 0.8 million for Q1 2022, from SAR 32.3 million in Q1 2021.