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The weak third quarter net profit figures at Arab Sea Information Systems Co. (Arab Sea), which manufactures computer solutions and information systems, are due to weaker sales ahead of the value-added tax (VAT) implementation in the Kingdom, board member, Abdel Rahman Ibrahim Al Semari, told Argaam.
Many companies have held off buying solutions and information systems until they are brought in line with the new tax, Al Semari explained.
Arab Sea sustained around SAR 845,000 in losses in Q3 2017, versus net earnings of SAR 5.7 million in Q3 2016, which were attributed to higher sales of Scribes system, Argaam reported.
“Other reasons for the revenue slump in Q3 included lack of new business due to the economic slowdown, which weighed on SMACC system,” he noted.
Companies using the accounting systems don’t tend to change their software until after finalizing annual budgets.
Meanwhile, the company has launched a new SMACC retail system, which addresses the needs of small and medium enterprises (SMEs) in line with the new VAT system. In addition, the company’s other products were upgraded in line with VAT, Al Semari added.
SMACC system product was picked by the General Authority of Zakat and Tax (GAZT) as one of the accredited technical solutions, he said.
Meanwhile, Arab Sea has adopted an extensive domestic and global marketing plan, and is planning to enter new markets to boost POS sales.
Arab Sea reported an 86.8 percent year-on-year (YoY) slump in net profit to SAR 610,989 in the first nine months of 2017, on a decline in revenue along with higher general and administrative expenses, Argaam reported.
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