Saudi Cable CEO sees significant improvement in next quarter’s performance

Nael Fayez, CEO of Saudi Cable Co.

Saudi Cable Co. (SCC) expects significant improvement in the next quarter’s performance, on growing market demand and the opening of its financial restructuring procedure (FRP), which will help lift suspension on bank accounts and drive cash inflows, CEO Nael Fayez told Argaam in an interview.

All of these reasons give positive indicators of the company’s improvement in the next quarter, said the top executive, indicating that SCC is currently preparing a proposed FRP, which includes capitalizing a large portion of the debts. This will in turn help eliminate major burdens and lead to more working capital rotation.

He added that the proposed FRP will contribute to boosting the company's manufacturing and production capacity, which will reflect positively on its sales and future financial statements.

As for subsidiaries, SCC’s management evaluated their investments and returns, to study the feasibility of continuing these investments or disposing of them. For the first quarter, SCC may receive dividends from a sister company, as per the announcement previously published on Tadawul, said the CEO.

With regard to SCC’s financial results for Q1 2023, Fayez said the profitability was due to the company’s share of the profit of its sister company, Midal Cables. This is in addition to the reversal of the Zakat provision resulting from settlements with the Zakat, Tax, and Customs Authority (ZATCA) related to relevant cases.

He explained that the year-on-year (YoY) fall in the first-quarter revenues was due to the liquidity deficit during this period to finance working capital.

In addition, a provision was set aside to meet Zakat assessments that reflect the Zakat differences on the parent company for the years 2015 to 2018, which amount to roughly SAR 145 million. The company requested a settlement with ZATCA and obtained a reduction of nearly SAR 41 million, said the CEO.

Elsewhere, Fayez pointed to the huge increase in demand, reflecting the uptick in new megaprojects in the Saudi market and the government’s drive to allocate a large portion of fiscal spending to support these projects.

As for the resumption of trading on the company’s shares in Tadawul, Fayez said this is conditional on the issuance and announcement of the late financial statements for Q2 and Q3 2023.

The company announced today, Jan. 18, its first-quarter financial results with an unmodified (clean) opinion. The external auditor was recently appointed by SCC’s general assembly for the subsequent period. Accordingly, management is now working with the external auditor to issue the financial statements for Q2 and then for Q3 2023, according to the top executive.

He also pointed out that the company expects to announce its financial statements for Q2 2023 on Feb. 15, 2024, after which it will announce the results of the third quarter, the date of which will be announced with the issuance of Q2 results.

According to Argaam's available data, SCC posted SAR 40.9 million profit by the end of Q1 2023, against a SAR 37.2 million loss recorded during the same period in 2022.