Saudi Industrial Services Company (SISCO), Saudi Arabia’s leading strategic investor in ports and terminals, logistics parks and services, and water solutions, has reported a revenue of SR196.2 million ($52.3 million) for the quarter ended March 31, 2022.

 

The revenue, excluding accounting construction revenue, was a decline from SR253.6 million for the same period last year. 

 

The company’s results for the quarter were impacted by ongoing global supply chain disruptions which were compounded by the resumption of pandemic restrictions in China, which significantly impacted gateway and transshipment volumes in the ports segment, it said. 

 

Revenues and profitability in the water segment were impacted during the period due to temporary decrease in production of the Kindasa facility for two months during the quarter. All issues related to this decrease in production have been resolved and the company expects revenues to return to normal levels for the remainder of the year, it said.  

 

Consequently, gross profit for the period declined to SR90.2 million in Q1 2022, from SR134.9 million in the same period last year, due to a temporary decrease in production in the Kindasa plant and decline in gateway income impacted margins during the quarter. SISCO’s gross profit margin for the period was 46.0% compared to 53.2% in Q1 2021.    

 

Excluding the impact of one-off extraordinary loss incurred by Kindasa due to temporary decrease in production, SISCO share of adjusted net income for the first quarter is SR3.6 million compared to SR27.7 million for the same period last year. 

 

Mohammed Al-Mudarres, Chief Executive Officer at SISCO, said: “During the quarter, we made solid progress on the execution of our strategy to capture long-term value creation opportunities in the Kingdom’s logistics and infrastructure sectors. These are primed to deliver significant long-term structural growth in line with Vision 2030 and SISCO is positioned to be at the heart of that journey. The completion of our acquisition of a 31.7% direct equity stake in Green Dome from our subsidiary LogiPoint in March 2022 brings us another step closer to building a highly-integrated logistics platform, a key pillar of our strategy which will enable us to capture value across the logistics value chain, whilst generating impactful synergies in our portfolio of businesses.

 

“However, our revenue and profitability was negatively impacted during the quarter due to the resurgence of Covid-19 restrictions in key export markets, particularly Asia, resulting in a slowdown in the global ports and logistics sectors. Whilst we are likely to continue to see the impact of this in Q2, we expect supply chain pressure to ease later in the year which will positively impact the ports and logistics segments. We are confident our portfolio of assets and operational expertise will deliver long-term value for our shareholders.”

 

Total shareholders’ equity decreased to SR1,454 million as at March 31, 2022, from SR1,486 million as at December 31, 2021. Adjusted earnings per share for the quarter stood at SR0.04 as compared to SR0.34 for the same period in the prior year.

 

Outlook and strategy 

SISCO continues to make strong progress with the delivery of its five-year strategy to drive long-term value creation and double revenues to SR2 billion by 2025. The partial divestment of the group’s direct equity stake in RSGT in 2021 unlocked significant value and capital for the company to deploy on value accretive investments that are in line with its strategic focus areas of ports, logistics and water. SISCO has a strong pipeline of potential acquisition opportunities that it is actively pursuing and will be providing material updates to the market in due course, it said. 

 

In March 2022, SISCO completed the acquisition of a 31.7% direct equity stake in Green Dome Investments (Green Dome) from its subsidiary Saudi Trade & Export Development Company (LogiPoint). The acquisition reinforces SISCO’s strategy of expanding its presence in logistics services and maintaining its position as a leading player with a presence across the logistics value chain, the company said. - TradeArabia News Service