A look at SISCO’s future projects, ownership structure

Saudi Industrial Services Co. cut (SISCO) its preliminary growth forecasts amid the rapid spread of the novel coronavirus (COVID-19) and its negative impact on industrial markets, along with the current decline in oil prices.

The company had earlier expected its operating segments to maintain momentum through 2020, according to SISCO’s 2019 board report.

In the ports segment, SISCO upped its stake in Jeddah Islamic Port to 43% in 2019 from 37% a year earlier. Accordingly, the company’s operations saw growth of 24% year-on-year (YoY), driven by improved volume of container handling and reinstatement of customs inspection charges.

SISCO signed a 30-year concession contract with Saudi Port Authority (Mawani) to develop and operate Jeddah Islamic Port (JIP).

Under the deal, Red Sea Gateway Terminal will redevelop the northern part of the JIP, which will include the adjacent container terminal and RSGT’s existing terminal to become the largest container terminal in Saudi Arabia and on the Red Sea.

The agreement was expected to have a positive impact on the company’s financials during the second quarter of 2020.

The port operator received 226 mega vessels in 2019, a rise of 33% YoY. More mega vessels are forecast to be received in the next few years, on higher demand.

Total container volumes handled grew by 3% YoY to 8.94 million TEus in 2019, buoyed by an increase in import and export containers, as well as the gateway volume.

Meanwhile, transshipment dropped 6% YoY, accounting for 43% of total volume.

In the logistics services, SISCO said demand remained high. Demand is likely to see significant growth in the upcoming years, amid increased government investments and private sector involvement.

SISCO’s subsidiary LogiPoint won contracts from petrochemical and e-commerce firms. The logistics service provider expanded its operations in the GCC region.

Warehousing occupancy at the bonded and re-export zone remained constant at 98% amid strong demand.

SISCO’s S.A Talke maintained its growth, as it secured five contracts, with four renewals: Sabic PLF, Ibn Zahr, Tasnee, Ibn Sina and one new project: Sadara Container Yard).

The company also expanded its footprint in the Eastern and Western provinces.

On the other hand, Kindasa is planning to raise its market share to 80% over the next five years through developing new projects. The company’s current market share stands at 65%.

Water sales extended their downtrend for the fourth straight year to 16.6 cubic meters by the end of 2019, a decline of 4% YoY.

Utilization hit 67.5%of Kindasa’s 24.6 million cubic meter design capacity.

Rabigh desalination plant was completed with its operations kicking off in Q3 2019. The plant has a design capacity of 6,000 cubic meters per day expandable to 12,000 cubic meters per day.

Tawzea signed a 25-year contract with Saudi Water Partnership Company (SWPC) to build the Taif Independent Sewage Treatment Plant (ISTP). Construction is expected to begin in Q2 2020.

For ownership structure, Xenel Industries Co. was the biggest shareholder in the company with a 14.7% stake in 2019.

The following table illustrates shareholders’ ownership in SISCO by the end of 2019:

The following table illustrates changes in board of directors’ ownership by the end of 2019:

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