Saudi Arabian Amiantit : News

Amiantit announces consolidated financial results for the period ending 30/9/2007

Dammam. :The Saudi Arabian Amiantit Company has announced that the consolidated financial results for the period ending September 30th 2007 showed net sales of almost SAR 2.3 billion, an increase of 12 percent over the SAR 2.0 billion sales figure for the same period last year.
The company has achieved significant improvement in profitability for the first nine months of this year, with an increase of more than 200 percent compared to the same period last year, reaching net profits of approximately SAR 63.9 million (SAR 74 million before Zakat) for the first nine months of this year, compared with profits of SAR 20.8 million (SAR 30.7 million before Zakat) for the same period last year.

Operational profits increased to almost SAR 229 million compared with SAR 140.8 million for the same period last year, an increase of 63 percent while net profits per share amounted to 55 halalas, compared with 18 halalas for the same period last year. The consolidated profits for the three months ending September 30th 2007 were SAR 24 million, an increase of 110% compared with SAR 11.4 million for the same period of 2006. This improvement is due to the company’s continuity to maintain high levels of sales and making every effort to reduce production costs through optimal usage of operational synergy and making every possible effort to control the effect of high raw material prices, which helped to reduce operational costs to sales margins by almost 3 percent.

Commenting on the financial results for the first nine months of 2007, the company noted that the results achieved are most promising and reflect the company's confidence in the success of maintaining growth and improving the level of profitability, in spite the fact that the third quarter results included a provision of approximately SAR 38 million to face potential losses on the sale of the whole or part of its ownership in its factory in the United States. Therefore, this year's first nine months profits before provision were more than SAR 100 million. However, this provision should not have a significant effect on the company's general results, or on its overall financial position, as it is expected that profits will continue to increase after the restructuring of its investments is completed, by adding no less than SAR 50 million of profits annually effective next year and afterwards.

Further to the company's announcement of its ownership restructuring program of its investments in companies in Latin America, North America and China, the company has announced the signing of a contract for the sale of 70 percent of its shares in its manufacturing facilities in Brazil and Argentina, which added SAR 7 million of non-operational profits for the third quarter of this year. Amiantit is planning to announce the outcomes of the other negotiations at the proper time.

With reference to the most prominent financial indicators, the company explained that the results for the first nine months of 2007 highlight positive financial indicators consistent with the indicators in the same period of last year, whereby the company has maintained a good liquidity ratio of approximately 1.19 (1.15 in 2006), while the leverage ratio is around 1.57 (1.65 in 2006).

Administrative and marketing expenses recorded an increase of 6 percent due to higher wages in general, and to high exchange rates of some foreign currencies, such as the Euro against the Saudi Riyal as some segments of the company are based and operate in Europe. Financing expenses also rose by 19 percent because of the high level of operation activities and the high cost of interests compared with the same period of 2006.

It is worth noting that the level of backlog so far this year has already reached more than SAR 2 billion, which enhances the company's confidence in its ability to achieve total sales for this year of around SAR 3 billion, that’s corresponds to an increase of 13 percent over sales in 2006.