Saudi Paper's raw materials purchase backs strategic inventory, lowers price volatility: CEO

Yousri Al-Bishri, CEO of Saudi Paper Manufacturing Co.

Saudi Paper Manufacturing Co.'s (SPM) agreement to purchase raw materials contributed significantly to purchasing large quantities of inventory at competitive prices, said CEO Yousri Al-Bishri.

The move helped build a strategic inventory, reducing fluctuations in global market and shipping prices, thus maintaining the planned profit margins, he said in an interview with Argaam.

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Al-Bishri noted that this resulted in a gross profit of 34.6% in Q2 2024, compared to 27.7% in the same period a year ago.

Commenting on the second quarter's financial results, he explained that the 28% drop in Q2 2024 net profit quarter-on-quarter is due to the decrease in sales volume, as the second quarter coincided with the official holidays and the cessation of major customers from receiving shipments during that period.

Al-Bishri pointed out that sales of paper rolls and converted products amounted to SAR 392 million, while the percentage of export sales reached 9% by the end of the second quarter.

Provisions for accounts receivable fell by SAR 1.9 million in Q2 2024 compared to the same period a year ago, he added.

The company's 10% capital increase aims to support its capital base, which contributes to enhancing future growth plans and maximizing total returns for shareholders.

The CEO expected the positive performance to continue, given the decline in financing and production costs and the return of economic activity after the holidays.

According to Argaam's data, SPM’s profit jumped to SAR 62.3 million in H1 2024, from SAR 29.7 million in the year-earlier period.