Middle East Paper Co. (MEPCO) swung to a net loss of SAR 6.6 million in Q1 2023, against a net profit of SAR 92.4 million in the year-earlier period.
| Item | Q1 2022 | Q1 2023 | Change |
|---|---|---|---|
| Revenues | 305.02 | 223.95 | (26.6 %) |
| Gross Income | 143.16 | 35.29 | (75.3 %) |
| Operating Income | 104.65 | (2.41) | (102.3 %) |
| Net Income | 92.39 | (6.56) | (107.1 %) |
| Average Shares | 66.67 | 75.23 | 12.8 % |
| EPS (Riyals) | 1.39 | (0.09) | (106.3 %) |
| Item | Q4 2022 | Q1 2023 | Change |
|---|---|---|---|
| Revenues | 231.52 | 223.95 | (3.3 %) |
| Gross Income | 77.17 | 35.29 | (54.3 %) |
| Operating Income | 15.85 | (2.41) | (115.2 %) |
| Net Income | 24.79 | (6.56) | (126.5 %) |
| Average Shares | 66.67 | 75.23 | 12.8 % |
| EPS (Riyals) | 0.37 | (0.09) | (123.4 %) |
The paper manufacturer was hurt by a 27% year-on-year (YoY) decrease in revenues, on lower selling prices of the company’s products amid a global decline in paper product prices. Gross profit margins contracted from 47% to 16% in Q1 2023. Further, MEPCO reported an increase in the cost of sales on higher sales volumes.
In Q4 2022, the company posted a net profit of SAR 24.79 million. The first-quarter losses were attributed to a 54% drop in gross profit. Gross profit margins also fell to 16% from 33%.
MEPCO reported costs savings with an increase in Zakat expenses by SAR 3.5 million against Zakat reversals of SAR 2 million in the previous quarter and a reduction in other income by SAR 7 million on lower forex gains.
Shareholders’ equity, after minority interest, rose to SAR 1.17 billion as of March 31, 2023, from SAR 1.07 billion in the year-earlier period.
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