GASCO undertaking SAR 350 mln projects, says CEO

The National Gas and Industrialization Co. (GASCO) is implementing SAR 350 million worth of projects, of which SAR 194 million will be allocated for the development of production lines, chief executive Abdulkarim Al-Nujaidi told CNBC Arabia on Wednesday.

GASCO is currently awarding contracts for some projects, mainly a facility to boost strategic gas storage for SAR 100 million, and comprehensive security systems for some plants at a total of SAR 40 million.

It is also closing deals for the development of fire-fighting and alarm systems at some plants at a total cost of SAR 25 million.

The gas producer’s first-half results were largely driven by lower administrative expenses and cost cuts, particularly advisory chares. 

However, the Saudi government’s decision to hike utility prices, coupled with higher labor costs and the planned value-added-tax will weigh on input costs, Al-Nujaidi said, adding that VAT impact on the cost of sales is still under study.

Meanwhile, Al-Nujaidi said GASCO does not have any short or long-term debts, and client receivables are declining, thanks to the company’s high collection rate.

GASCO reported a net profit of SAR 102.8 million for H1, up 40 percent year-on-year (YoY), compared to SAR 73.3 million a year earlier.