Logo of Saudi Industrial Services Co.
Saudi Industrial Services Co.’s (SISCO) Q2 2022 earnings were primarily hit by the lower performance of the ports development and operations segment for the fifth quarter in a row.
The segment reported a net profit of SAR 0.1 million in Q2 2022, compared to SAR 20.2 million in the year earlier period, impacted by a slump in revenue and profit margins, in addition to an increase in operating expenses, data compiled by Argaam showed.
The segment’s revenue also fell to SAR 195.9 million on continued disruptions in the global supply chains, which weighed on the handled vessels and other transshipment containers.
|
Ports Development and Operations Segment (SAR mln) |
||||
|
Period |
Revenue |
Gross Profit |
Profit Margins |
Net Profit |
|
2021 |
||||
|
Q1 |
211.5 |
120.4 |
56.9% |
26.4 |
|
Q2 |
200.4 |
104.8 |
52.3% |
20.2 |
|
Q3 |
170.5 |
80.3 |
47.1% |
3.9 |
|
Q4 |
205.7 |
76.8 |
37.3% |
3.0 |
|
2022 |
||||
|
Q1 |
172.7 |
78.8 |
45.6% |
0.9 |
|
Q2 |
195.9 |
81.1 |
41.4% |
0.1 |
On the other hand, net profit of logistic parks and support services segment increased to SAR 3.7 million by the end of Q2 2022, compared to SAR 2.8 million in Q2 2021, on lower direct cost of revenue.
The segment’s revenue dropped by more than 17% year-on-year (YoY) to SAR 22.1 million in Q2 2022, from SAR 26.7 million.
The company seeks to boost the warehousing capacity by year-end, which will increase the segment’s contribution to total revenue.
|
Logistics Parks and Support Services Segment (SAR mln) |
||||
|
Period |
Revenue |
Gross Profit |
Profit Margins |
Net Profit |
|
2021 |
||||
|
Q1 |
24.0 |
8.5 |
35.4% |
1.2 |
|
Q2 |
26.7 |
11.4 |
42.8% |
2.8 |
|
Q3 |
26.7 |
10.0 |
37.6% |
1.0 |
|
Q4 |
23.6 |
8.0 |
33.9% |
0.5 |
|
2022 |
||||
|
Q1 |
22.9 |
9.9 |
43.2% |
3.2 |
|
Q2 |
22.1 |
9.9 |
43.4% |
3.7 |
The water desalination segment reported a net profit of SAR 2.2 million for Q2 2022, compared to SAR 1.6 million in a year-earlier period.
This earnings increase was fueled by a 5.1% jump YoY in profit margins to SAR 34.3% in the three-month period, due to a slump in direct costs, and a rise in revenue as production volumes reached 4 million cubic meters.
|
Water Desalination and Distribution Segment (SAR mln) |
||||
|
Period |
Revenue |
Gross Profit |
Profit Margins |
Net Profit |
|
2021 |
||||
|
Q1 |
22.9 |
6.0 |
26.3% |
0.3 |
|
Q2 |
25.1 |
7.3 |
29.2% |
1.6 |
|
Q3 |
26.1 |
6.7 |
25.5% |
0.9 |
|
Q4 |
22.4 |
6.2 |
27.7% |
0.6 |
|
2022 |
||||
|
Q1 |
16.9 |
1.5 |
8.9% |
(3.0) |
|
Q2 |
25.4 |
8.7 |
34.3% |
2.2 |
SISCO’s gross profit margins fell to 41% YoY in Q2 2022, on weaker revenue and higher direct costs as well as cost of construction.
The company’s operating expenses rose 18% YoY to SAR 47 million, hit by higher general and administrative expenses (G&As).
Cost of finance and Zakat expenses increased 5% and 167%, respectively, for the three-month period.
|
Income Statement (SAR mln) |
||||||
|
Income Statement |
2021 |
2022 |
||||
|
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
||
|
Revenue |
252.1 |
223.3 |
251.7 |
212.6 |
243.4 |
|
|
Gross Profit Margins % |
49% |
43.5% |
36.2% |
42.4% |
41% |
|
|
Operating Expenses |
(40.6) |
(41.6) |
(45.1) |
(43.8) |
(47.0) |
|
|
Investments & Others |
1.5 |
4.1 |
(0.6) |
2.0 |
5.5 |
|
|
Associates’ Income |
6.0 |
7.6 |
4.3 |
6.4 |
8.4 |
|
|
Financing Charges/ Income |
(50.9) |
(50.7) |
(50.6) |
(50.6) |
(53.4) |
|
|
Zakat & Tax |
(3.2) |
(7.6) |
(1.6) |
(3.0) |
(8.6) |
|
|
Net Profit |
22.5 |
4.0 |
(0.9) * |
0.8 |
3.1 |
|
*Written back unused provisions at SAR 3.7 million.
SISCO is forecast to achieve better results in H2 2022 on improved performance of the ports, logistics, water and other segments, while the impact of the recent acquisitions will likely appear in 2023 and 2024 financials. SISCO, in an exclusive statement to Argaam, said it is committed to its proposed strategy of acquisitions and expansions to achieve its strategic objectives for 2025 and 2026.
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