FIPCO H1 net profit down 3% to SAR 1.2 mln; Q2 at SAR 59,000

Filling & Packing Materials Manufacturing Co. (FIPCO) reported a net profit of SAR 1.2 million in H1 2023, a decline of 3% from SAR 1.3 million in the year-earlier period.

The profit decline was attributed to higher general and administrative expenses because of settling the offering expenses paid to the financial advisor that relates to increasing the company's capital through offering rights issues.

Lower gains of investments at fair value through profit or loss (FVPL) and decreased other revenues also weighed in the profit slump.

The company reported a net profit of SAR 59,000 in Q2 2023, down 93.4% from SAR 900,000 a year ago. This was due to lower gross profit amid squeezed sales due to a pullback in sales volumes on seasonality as a result of the holy month of Ramadan as well as Eid Al Fitr and Eid Al Adha holidays during the three-month period, despite lower provision for expected credit losses.

On a quarterly basis, Q2 net earnings fell 95% from SAR 1.2 million on a quarter-on-quarter (QoQ) drop in gross profit amid sluggish sales due to contracted sales volumes. This was offset by weaker selling and marketing expenses as a result of a decline in freight charges due to lower sales volumes, alongside a decrease in recruitment costs in Q2 2023 after the restructuring of some job roles.

Total shareholders’ equity, no minority interest, stood at SAR 133.3 million as of June 30, 2023, compared to SAR 121.3 million in the prior-year period.

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