“Weaker than estimated sales revenue of SAR279mn (10% lower than EFG’s estimate) and higher SG&A (selling, general & administrative expense) costs (35% higher that EFG’s estimate) put pressure on (the) bottom line,” Kattiparambil added.
Saudi Ceramics’ shares were trading 2.07 percent lower on Wednesday, by 14:21 GST, but have still gained 2.37 percent so far this year.
Fatma Haddad, a financial analyst at Tunisia-based AlphaMena, told Zawya by email that Saudi Ceramics’ results were in line with AlphaMena’s forecasts, as it had “become skeptical on its outlook in the short to mid-term". Hadded said that she expected "losses to further deepen”.
“The ceramic company suffered declining demand and a dumping of imported products, mainly from China and India, pushing it to reduce its selling prices in order to keep its market share. Moreover, cost of sales went up because of increasing raw material prices, and finance costs rose following the debt restructuring during the year,” Haddad said.
During 2018, the company announced that it has signed agreements with many banks in order to reschedule some of its loans to improve its cash flow position and liquidity. The debt will be paid through unequal, semi-annual payments ending in December 2024.
For the full year, the company's net loss after zakat and tax more than doubled to 220.6 million riyals, up from 97.1 million riyals in 2017. Its sales also dropped by 9.65 percent in 2018 to 1.03 billion riyals, from 1.14 billion riyals in 2017.
"We expect the turmoil to carry on during the coming year. Despite a shy recovery foreseen in 2020, we are still cautious on the growth perspectives as it would remain far from the historical achievements," Haddad added.
(Reporting by Gerard Aoun; Editing by Michael Fahy)
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