East Pipes Q3 2024/25 profit boosted by operating efficiency, fluctuating average prices ‘normal: CEO

 Mohammed Al-Shaheen, CEO of East Pipes Integrated Company for Industry 

East Pipes Integrated Company for Industry posted higher profit in Q3 2024/25 thanks to several factors spurred by its operating efficiency during the three-month period, including effective operations management namely in terms of procurement of raw materials, improved production conditions and scheduling, CEO Mohammed Al-Shaheen said in an interview with Argaam.

The sound cash flow management also effectively enhanced financial liquidity, which helped slash financing costs and boosted profitability. This came given the significant variations that may be reflected in quarterly results compared to previous years due to the diverse nature of projects being undertaken and their delivery plans, he stated.

However, Al-Shaheen attributed the recent sales decline to the nature of contracts sealed and their varying order volumes, some of which require added-on services such as packaging and shipping.

He indicated that these services are considered part of the company's scope of work. While all contract terms are being fulfilled, their cost is factored in sales figures, formulating a difference in sales from one quarter to the other.

According to the top executive, East Pipes’ diverse project portfolio and their associated requirements affect the volume of demand and the method of distribution, emphasizing that, despite the slight decrease in recent sales, the company managed to elevate its profits.

“Furthermore, East Pipes implemented several projects in the water and gas sectors, factoring in all the required efficiency and quality, despite their varying needs and multiplicity in spiral pipe and packaging factories,” said the CEO.

He continued, “The company’s financial results reflect the high effectiveness of operations during the third quarter of this fiscal year (FY), deemed one of the most rewarding periods in terms of operational efficiency.”

As for product demand and selling prices, Al-Shaheen stressed that the nature of the company's business differs in terms of dealing with long-term, large-scale projects, each of which necessitate different requirements than the other in terms of specifications, order volumes and delivery schedules. Therefore, the fluctuating average prices are considered only normal and highly likely.

East Pipes has mastered long-term planning in order to manage costs and resources flexibly with basic variables such as raw material prices. This ensures competitive prices while also maintaining the highest quality standards, he added.

The CEO also expected the company to continue implementing its existing projects and providing its services with high quality to its customers during the fourth quarter of 2024/25.

Amid the increasing demand and continuous growth witnessed in Saudi Arabia, contracting with corporates remain the first choice among large-scale, time-sensitive projects, setting bigger goals and duties before such companies which in turn require exploiting their production capacities with very high efficiency.

This ultimately boosts East Pipes’ ability to meet increasing requirements and strengthening its leading role in the sector, thus ensuring that it continues to provide added-value to its customers and support sustainable development in the Kingdom, according to the top executive.

The CEO also pointed out that East Pipes' Q3 2024/25 profit outstripped that of its best fiscal year since inception, aspiring that the fourth quarter will be an extension of this success.

According to the data available with Argaam, East Pipes’ net profit rose to SAR 296.5 million by the end of the first nine months of FY 2024/25, compared to SAR 88 million during the same period in FY 2023/24. Its Q3 2024/25 bottom line amounted to SAR 112.4 million.