Ash-Sharqiyah’s accumulated losses stand at 39% of capital

Ash-Sharqiyah Development Co. said on Thursday that its accumulated losses reached SAR 29.1 million, or 38.8 percent of its capital.

The losses were mainly attributed to lower sales volumes, a continuous rise in production costs over the previous years along with the company’s inability to compete with leading agricultural firms.

Higher operating costs due to damage of the company’s crops and sourcing fodder at high prices also contributed to actual losses, the company added in a statement to Tadawul.

Meanwhile, low liquidity and the lack of sources for financing of investment projects that were to diversify the company’s income sources, also had a negative impact.

Ash-Sharqiyah added that a restructuring plan was developed to enhance growth and offset losses.

The new scheme is aimed at diversifying income resources, bolstering productivity, offering new products, increasing market share and cutting fixed costs.

The rules set by Saudi Arabia’s Capital Market Authority (CMA) governing listed companies with accumulated losses of 20 percent to 35 percent will apply to the company starting from April 22.