Naqi Water 9M 2023 profit drops 12% to SAR 40.6 mln; Q3 at SAR 16.2 mln

Naqi Water Co. reported a 12% profit drop in the first nine months of 2023 to SAR 40.6 million from SAR 46.2 million a year earlier.

The company cited a 5% decrease year-on-year (YoY) in gross profit.

Meanwhile, sales decreased by 15% YoY because of redistributing sales capacities during the first half of 2023 to align with the company's expansion plans and the opening of new branches.

Naqi Water recorded higher selling and distribution expenses, as well as general and administrative expenses, due to opening new branches and strengthening the company’s sales channels.

Additionally, the costs of transportation and distribution increased due to rising fuel prices.

Finance costs also increased as the company expanded its finance leasing business.

By contrast, other revenues increased from the company's investment of cash surpluses in Murabaha deposits and the utilization of its fleet to provide third-party transportation services.

The third-quarter net earnings rose 8% year-on-year (YoY) to SAR 16.2 million as gross profit grew by 2% YoY on a 24% drop in the cost of goods sold. Operating profit rose by 5% YoY, driven by improved gross profit.

Naqi Water reported higher other revenues from its investment of cash surpluses in Murabaha deposits and the utilization of its fleet to provide third-party transportation services.

Further, Zakat provisions decreased on an annual basis.

On a quarterly basis, net profit jumped 22.4% from SAR 13.2 million, thanks to a 10% increase quarter-on-quarter (QoQ) in gross profit due to 10% sales growth. Operating profit also rose by 21% QoQ, driven by improved gross profit.

Total shareholders’ equity, no minority interest, stood at SAR 250.74 million as of Sept. 30, 2023, compared to SAR 244.51 million in the prior-year period.

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