Saudi group East Pipes posts 88pc jump in H1 revenue
RIYADH, October 29, 2022
Saudi-based East Pipes Integrated Company has reported a 88% growth in its revenue for the first half of FY23, which soared to SR509 million ($82.4 million), mainly driven by a robust topline performance as a result of an increase in sales volumes.
Announcing the financial highlights for the first six months ended September 30, 2023 the leading manufacturer of helical submerged arc welded (HSAW) pipes said its gross profit increased 65% y-o-y to SR15 million over the previous year's figure of SR9 million, primarily due to a pickup in sales volumes and average realized sales prices compared to last year.
Its long-standing and strong relationships with key suppliers across the globe, have positioned the company to successfully execute its backlog.
Ebitda increased 10% QoQ and 154% y-o-y to SR20 million (1Q-FY23: 18 million; 2Q-FY22: SR8 million), essentially attributed to the enhanced topline performance, and a decline in SG&A expenses. The 1H-FY23 period followed a similar trend, with Ebitda amounting to SR38 million, thus representing a 40% y-o-y increase.
Revenues of SR303 million increased 47% QoQ and 150% y-o-y (1Q-FY23: SR 206 million; 2Q-FY22: SR121 million), as sales volumes significantly improved during the period, as well as average sales prices, supported by enhanced activity in the market, and with the completion of significant projects by the company.
Gross profit of SR15 million increased 65% y-o-y (2Q-FY22: SAR 9 million) primarily due to a pickup in sales volumes and average realized sales prices compared to last year.
On a sequential basis, gross profit declined 21% (1Q-FY23: SAR 19 million), on the back of an increase in the cost of the company’s raw materials in 2Q-FY23. For 1H-FY23, gross profit totalled SR34 million, representing a 66% y-o-y increase, positively impacted by both a volume and price effect.
East Pipes’ long-standing and strong relationships with key suppliers across the globe, have positioned the company to successfully execute its backlog.
Ebitda increased 10% QoQ and 154% y-o-y to SR 20 million (1Q-FY23: 18 million; 2Q-FY22: SR8 million), essentially attributed to the enhanced topline performance, and a decline in SG&A expenses.
The H1-FY23 period followed a similar trend, with Ebitda amounting to SR38 million, thus representing a 40% y-o-y increase.
CEO Mohammed Al Shaheen said: "It is with great pleasure that we announce an increase in profit in 2Q-FY23. This outcome was largely substantiated by the implementation of various optimization measures and reinforced by our solid positioning as a leading manufacturer in the domestic market."
"We have continued to focus on providing distinctive product offerings to our customers, and through capitalizing on our relationships with key business partners, we have managed to weather the impact of global supply chain disruptions. Driven by our ability to execute effective pricing strategies, and increase sales volumes, we witnessed a remarkable improvement in gross profit during the period," he stated.
"East Pipes will move forward through securing a greater share of the market, as our upcoming project pipeline will form a concrete basis for the enhancement of profitability in the future. This, in conjunction with our operational excellence and deep technical expertise, should support the future prospects of the company," added Al Shaheen.
Chief Financial Officer Mohamed Darweesh said: "East Pipes reported a strong set of financial results in 2Q-FY23, with improving profit, which is testament to the company’s strong competitive positioning in the market."
"This performance is predominantly the result of leveraging the key strengths of our organization, which have enabled us to deliver innovative products to our broad base of customers, whilst maintaining cost discipline, and advancing our manufacturing efficiencies," remarked Darweesh.
"Looking ahead, the foundations for sustainable value creation will be a priority for the Company, as we continue to build our backlog, with large-scale projects under Vision 2030 coming into fruition. We remain proactive in expanding our footprint, through the utilization of our integral partnerships with key stakeholders in the market, which will strategically position East Pipes for the upcoming phase of growth," he added.-TradeArabia News Service
