Tuesday 27 September 2022

SISCO reports 8.7pc growth in Q2 revenues to $57 million

Jeddah, Saudi Arabia, August 11, 2022

Saudi Industrial Services Company (SISCO), Saudi Arabia’s leading strategic investor in ports and terminals, logistics parks and services, and water solutions, has reported its revenues for the second quarter of 2022, excluding accounting construction revenue, reached SAR 213.2 million ($56.85 million) compared to SAR 196.2 million for the first quarter, increasing by 8.7%. 
Ports segment performance gained momentum after being impacted by ongoing global supply chain disruptions in Q1, which had negatively affected gateway and transshipment volumes, the company said in a statement. SISCO’s Water segment also showed improvement during the quarter as production and volumes improved following a decrease in production during Q1 2022. Logistics segment performance was broadly stable compared to the previous quarter. 
First-half revenues for 2022, excluding accounting construction revenues, were 17.8% behind 1H 2021 on the back of weaker first-quarter results, due to global supply chain disruptions and the temporary disruption of operations at the Kindasa water facility in February-March 2022. 
Gross profit of SAR 99.7 million for Q2 increased by 10.5% compared to the previous quarter. The gross aprofit margin for the quarter was 46.8%, compared to 46.0% in Q1 2022. For the first-half, gross profit was SAR 189.9 million, 26.5% lower than 1H 2021, mainly due to market challenges on Ports segment revenue in Q1, coupled with a decline in Water segment revenue during the first quarter.
Net income for the second quarter was SAR 3.1 million compared to SAR 0.8 million during the first quarter, due to increased profitability from Kindasa company coupled with performance improvement from associate companies.  
Adjusted net income for 1H 2022 declined by 92.2% year-on-year, despite improvement in the result from associate companies, is mainly due to the decline in Ports segment revenue and margins as a result of continued pressure on gateway volumes.
Mohammed Al-Mudarres, Chief Executive Officer at SISCO, commented: “Q2 2022 revenues showed promising signs of recovery compared to the previous quarter, which bodes well for the second half of the year. With the Kindasa plant back to normal operations after disruption in Q1, revenues for the Water segment improved by 50.3% from the previous quarter, returning to a normalized contribution. Revenues for the Ports segment improved by 6.0% from the previous quarter on improved gateway and transshipment volumes, showing clear signs of recovery in the local gateway market supported by an increase in shipping line capacity and reduction in container rates. Pleasingly, gross profit has improved along with the recovery of our revenues.
“Looking ahead, we anticipate strong local consumption in 2H 2022 due to the forecast increase in Umrah activities in the Kingdom. Meanwhile, estimated growth of 4.0% for Saudi Arabia’s non-oil sector in 2022 will provide further support to increased business activity across our portfolio.” 
Total shareholders’ equity decreased to SAR 1,459.4 million as at 30 June 2022, from SAR 1,486.0 million as at 31 December 2021. Basic and diluted earnings per share stood at SAR 0.05 as compared to SAR 0.67 for the same period in the prior year.
Outlook and strategy 
In its outlook, the company said: “SISCO remains committed to the delivery of its five-year strategy to drive long-term value creation, aiming to double revenues to SAR 2 billion by 2025. SISCO’s investment approach focuses on value accretive investments that are in line with its strategic focus areas of Ports, Logistics and Water. The company will announce updates to the market as other opportunities materialize. 
“Management believes that improved gateway and transshipment volumes are showing promising signs of recovery, which will be supportive to the local gateway market, benefitting from the expected increase in shipping line capacity. Management is also of the opinion that Saudi domestic consumption will be stronger in 2H 2022, on the back of forecast growth in Umrah activities”.--TradeArabia News Service


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