Saudi Steel Pipe H1 2024 profit rises 19% to SAR 107.9M; Q2 at SAR 51.8M

Saudi Steel Pipe Co. (SSP) reported a 19% rise in net profit to SAR 107.9 million for the first six months of 2024, from a SAR 90.9 million profit in a year earlier period.

The company's profit growth in H1 2024 was attributed to an increase in revenues to SAR 987 million, up from SAR 528 million in H1 2023, due to increased sales volume. This was primarily due to the consolidation of Global Pipe Co.'s (GPC) financials for the entire period in H1 2024, as opposed to consolidating its results from May 17, 2023, for H1 2023.

Gross profit increased to SAR 212 million in H1 2024 from SAR 116 million in H1 2023.

SSP incurred a loss on de-recognition of previously held interest in an affiliate amounting to SAR 10 million in H1 2023.

In addition, SSP’s earnings before interest, tax, depreciation, and amortization (EBITDA) recorded positive flows of SAR 211 million in H1 2024, compared to SAR 104 million in H1 2023.

Net debt amounted to SAR 333 million by the end of H1 2024, compared to SAR 540 million in H1 2023, as a result of improved profitability and effective management of cash flows.

This was despite recording a gain from a purchase deal at an attractive price of SAR 40 million in H1 2023 as a result of the acquisition of an additional 22.27% stake in GPC.

The company also reported a rise in financing expenses to SAR 18 million in H1 2024, from SAR 10 million in H1 2023, which was mainly due to the consolidation of the results of GPC for the entire period of H1 2024.

SSP witnessed an increase in working capital on higher commercial activities and capital spending. Accordingly, it recorded a negative free cash flow of SAR 16 million in H1 2024 compared to a positive free cash flow of SAR 83 million in H1 2023.

Q2 2024 net earnings dropped 38.8% YoY to SAR 51.76 million.

On a quarterly basis, net profit decreased 7.7% from SAR 56.11 million.

Total shareholders’ equity, after excluding minority interest, stood at SAR 792 million as of June 30, 2024, compared to SAR 641 million in the prior-year period.

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