| Element | Current quarter | Similar quarter for previous year | % Change current | Previous quarter | % Change previous |
|---|---|---|---|---|---|
| Net profit (loss) |
-
|
-
|
-
|
-
|
-
|
| Gross profit (loss) |
-
|
29.08
|
-
|
11
|
-
|
| Operational profit (loss) |
-
|
-
|
-
|
-
|
-
|
| All figures are in (Millions) Saudi Arabia, Riyals | |||||
| Element | Current period | Similar period for previous year | % Change |
|---|---|---|---|
| Net profit (loss) |
-
|
32.2
|
- |
| Gross profit (loss) |
39.31
|
188.38
|
- |
| Operational profit (loss) |
-
|
71.16
|
- |
| Earning or loss per share, Riyals |
-
|
0.27
|
- |
| All figures are in (Millions) Saudi Arabia, Riyals | |||
| Element | EXPLAINATION |
|---|---|
| Reasons of increase (decrease) for quarter compared with same quarter last year | The increase in company losses during Q4 of 2015 increased as compared to same quarter of the previous year due to the following reasons 1- The sales decline for the current quarter compared with same quarter of the previous year amounted to SAR 43.9 million representing 21 % which resulted in a negative gross margin of SAR 20.7 million as compared to a gross profit of SAR 29 million for the same quarter of the previous year. Such result is attributed to the fall in the pricing of major downstream products of the company influenced by the growing volatility in global economy and continuous decline in oil prices and methanol prices which burst competition in the main company market areas i.e. local markets India China and East Asia resulting in a decline in the prices and prompting the company to provide additional discounts in order to maintain market share.2- Despite the fall in some of major raw material prices the cost of sales experienced net increase due to several factorsa-The company had to shut down three of its facilities namely methanol DMF and Penta plants for scheduled and nonscheduled maintenance in accordance to its announcement on Tadawul dated 03/03/1437 corresponding to 14/12/2015 and incurred total charge of around SAR 11.5 million. b-Due to the fall of finished product prices and in compliance with accounting standard the company provided a provision of SAR 4.45 million to account for the difference between the realizable value of its finished goods stocks and their carrying value. c- Net Increase in other operational charges amounting to SAR 7 million due to increase in some elements of production. |
| Reasons of increase (decrease) for period compared with same period last year | The company losses SAR 139.36 million as compared to net profit of SAR 32.2 million of the same period last year were attributed to following reasons:1- Sales for the period declined by SAR 151.3 million which represents a decline of 17% as compared to sales of the same period last year. This decline was mainly attributed to major reduction in sales prices influenced by continued decline in methanol prices globally which in turn affected the pricing of some of the company main downstream products coupled with stiff competition in the main areas for the company products in local markets India China and East Asia prompting the company to provide additional discounts in order to maintain market share.2- Decline in sales due to the fire that erupted in the Paraformaldehyde plant as per the announcement in Tadawul dated 16/09/1435 A. H. corresponding to 13/07/2014 the plant resumed operation only on 16th April 2015 and gradually start to gain back its market share 3- The cost of sales was charged an additional provision to account for inventory slow moving items and additional provision to account for finished goods inventories cost difference to their net realizable value totaling SAR 14.33 million . The cost of sales was also charged with shutdown costs related to Methanol DMF and Penta plants as announced on Tadawul 14/12/2015 which incurred total cost of SAR 11.5 million.4- The other provision account includes an additional provision of SAR 15 million to cover a disputed claim from one of the Company suppliers 5. General and Administrative expenses has increased by SAR 4 million due to increase in professional fees by 2 Million against positive adjustment of SAR 2 million in 2014. Other factors that affected the current year results as compared to the previous year are as follows1- Under other (expenses) / Income account write-off of SAR 6.3 million was accounted for related to projects which have been postponed till the global economy improves 2- In the 2nd quarter 2014 the company gained SAR 4.8 million due to a refund from the Department of Zakat and Income Tax 3- Financial charges during 2015 also reduced due to the positive impact of interest rate swap and lower interest payment due to repayment of long term loans. |
| Reasons of increase (decrease) for quarter compared with previous quarter | The increase in loss as compared to last quarter reached SAR 17.3 million. Such increase was attributed to the following main reasons: 1- Decline in sales by SAR 7.9 million representing 5 % due to further decline in the prices specially Methanol and its derivatives2-Increase in the cost of sales by SAR 23.3 million representing 14 % mainly due to Methanol DMF and Penta plants shutdown impact of SAR 11.4 million and additional provision to account for the decline in finished goods inventories values by SAR 4.45 million and other accruals and charges. 3-Increase in selling and distribution expenses by SAR 4.8 million in the current quarter compared to the previous quarter due to increase in freight charges preloading charges and others. 4-General and Administration expenses increased by SAR 4.4 million due to year-end adjustments. 5-In last quarter Q3 a provision for slow moving inventories was provided under Other Provisions for an amount of SAR 9.9 million. Furthermore a provision of SAR 13.7 million was booked to cover the risk due to a disputed price differences claim from one of the Company suppliers which has not been settled yet. |
| Reclassifications in quarterly financial results | Comparative figures were reclassified to conform to the current period presentation. Such reclassification did not affect either net worth or net income. |
The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.