East Pipes Integrated Company for Industry, KSA’s leading maker of helical submerged arc welded (HSAW) pipes, has seen its nine-month (9M) FY24 net profit after zakat and income tax rise to SR88 million ($23.5 million) a 40% YoY rise. 

 

Net profit jumped to SR86 million in 3Q-FY24, thus increasing 80% YoY (2Q-FY24: SR21 million; 3Q-FY23: SR48 million), as a result of a sustained rise in average sales prices as well as enhanced margins. For 9M-FY24 ending December 31 2023, net profit amounted to SR88 million, compared to SR63 million in 9M-FY23.

 

Revenues amounted to SR552 million in 3Q-FY24, thus increasing 140% from last quarter, due to the impact of a rise in average sales prices which increased 13% YoY (2Q-FY24: SR230 million; 3Q-FY23: SR487 million). For 9M-FY24, revenues amounted to SR821 million, decreasing 18% YoY, primarily due to an increase in average sales price despite a decline in volumes, in line with the delivery schedules of projects in the current period.

 

EBITDA rise

EBITDA amounted to SR112 million in 3Q-FY24 (2Q-FY24: SR34 million; 3Q-FY23: SR67 million), driven by an improvement in the top line, due to a rise in average sales prices. For 9M-FY24, EBITDA increased 35% to reach SR141 million. EBITDA margin was 20% in 3Q-FY24 (2Q-FY24: 15%; 3Q-FY23: 14%), and 17% for 9M-FY24, compared to 10% for 9M-FY23.

 

Cash and cash equivalents decreased to SR2 million at the end of December 2023 (March 31 2023: SR53 million), while total borrowings nearly tripled from SR245 million to SR726 million, to finance the company’s expanding backlog. 

 

Mohammed Al Shaheen, Chief Executive Officer at East Pipes said: “East Pipes’ solid performance, both operationally and financially during this quarter, is testament to the dedication and hard work by the team, as we continued to direct our business and invest in our capabilities effectively, whilst ensuring the highest levels of quality and efficiency. 

 

Production capacity

“Our substantial production capacity is enabling us to effectively execute our growing pipeline of projects, and we also strengthened our partnerships with key players in the market, which is a reflection of the trust and confidence that they have continued to place in us. As a leading company within a pivotal and expanding sector, we are targeting to reinforce our position further and leverage our manufacturing capabilities, which will enable us to evolve our portfolio to cater to the changing needs of our customers.”

 

Mohamed Darweesh, Chief Financial Officer at East Pipes said: “East Pipes reported healthy financial indicators during the third quarter of FY24, as we witnessed an improvement in revenues, driven by an increase in average sales prices. Our profitability also remained strong during the period, as we continued to strategically optimise our operations, to enhance efficiencies across the organisation. 

“With our sustained pursuit of this progressive trajectory, we remain focused on strengthening our financial positioning, whilst boosting the resilience of our business, to ultimately deliver tangible long-term value to our shareholders and various stakeholder groups.”

 

Robust sales momentum

Ali Al Makrami, Vice President – Commercials at East Pipes commented: “The notable improvement in our performance was essentially supported by a robust sales momentum, thanks to our well-established track record in the market and strong brand name. Our wide-ranging endeavours in this regard, in addition to our solid competitive advantages, have resulted in the signing of a number of new contracts, and we are especially delighted by the significant SR1 billion contract award by SWCC, thus further expanding our business into the thriving water sector. 

 

“We take pride in being an important part of Saudi Arabia’s substantial mega-projects and are strongly placed to capitalise on a multitude of opportunities that are continuing to emerge. We remain committed to supporting the fundamental objectives of the kingdom’s Vision 2030 agenda, with a continued dedication to the best standards of operational excellence, innovation, and sustainability.”--TradeArabia News Service