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The Agricultural development company (NADEC) announces its annual financial results for the period ended on 30 Sep-18 (9 Months) - 07/11/2018

ELEMENT LISTCURRENT QUARTERSIMILAR QUARTER FOR PREVIOUS YEAR%CHANGEPREVIOUS QUARTER% CHANGE
Sales/Revenue574.71510.7612.52559.722.678
Total Profit (Loss)221.26179.1623.498212.384.181
Profit (Loss) Operational54.4924.33123.96238.2742.383
Net Profit (Loss) after Zakat and Tax35.1317.33102.71219.5180.061
Total Comprehensive Income35.1317.33102.71219.5180.061
All figures are in (Millions) Saudi Arabia, Riyals
ELEMENT LISTCURRENT PERIODSIMILAR PERIOD FOR PREVIOUS YEAR%CHANGE
Sales/Revenue1,608.511,571.342.365
Total Profit (Loss)596.18565.585.41
Profit (Loss) Operational104.4393.1712.085
Net Profit (Loss) after Zakat and Tax49.6247.554.353
Total Comprehensive Income49.6247.554.353
Total Share Holders Equity (after deducting minority equity)1,474.941,442.752.231
Profit (Loss) per Share0.590.56
All figures are in (Millions) Saudi Arabia, Riyals
ELEMENT LISTEXPLANATION
Reason for increase (decrease) in net profit for current quarter compared to the same quarter of the previous yearThe increase in net profit in the current quarter compared to the similar quarter last year by 102.78% is due to:-Sales Revenue: the Sales revenue increased for the total company by 12.52% driven by the increase in demand for the company’s dairy products. Where the Dairy and food processing sector grew in sales by 9.59% and Agricultural Sector Sales grew by 37.22%.

-Gross Profit: Gross profit increased by 23.50% due to the increase in sales and the continuous focus on driving production efficiencies and cost control which resulted in gross margin percentage increase more than the percentage increase in sales.

-Selling and Marketing expenses: Increased in this quarter compared to the similar quarter last year by 2.77% due to the increase in sales, it is well noted that the increase in sales and marketing expenses percentage is lesser than the increase in sales revenue which prove the effeciency plan that the company follow to reduce the cost.

-General and adminstrative expenses: The general and administrative expenses increased by 29.81% due to increase in the professional and consultancy fees that has been incurred for supporting the company’s strategic growth direction.

-Other income and expenses: increased by 2.57% due to the changes in bulls prices changes and the cows selling prices.

-Operational profit: increased by 124% due to the increase in sales, and despite the increase in G&A and the increase in sales and marketing expenses the company managed to generate higher operational profit due to the more efficiency and cost control put in place.

-Financing charges:increased by 30.94% despite the reduction in loans outstanding and the increase in financing charges is mainly due to the increase in borrowing cost.

-Zakat provision and expenses:in the similar quarter last year the company obtained final zakat declaration which was having positive impact and reduced the zakat expenses and provisions,hence in current quarter the zakat provision and expenses increased and negatively impact the net income.

Reason for increase (decrease) in net profit for current quarter compared to the previous quarterThe increase in net income this quarter compared to the previous quarter by 80.07% is due to:-Sales Revenue: Sales revenue increased by 2.68% where the sales revenue of Dairy and food processing sector increased by 3.95% due to the higher demand on the company’s products in the same time the sales revenue of the agricultural sector decreased by 5.11% where the revenue of agricultural sector is affected by the seasonal changes and the differences in plantation and harvesting periods.

-Gross profit: Gross profit increased by 4.18% due to the increase in sales and production efficiency.

-Selling and Marketing expenses: Selling and Marketing expenses decreased by 2.19% compared to the previous quarter due to the increase in sales volume.

-General and administrative expenses: General and administrative expenses decreased by 23.23% due to lower spending on professional and consultancy fees.

-Other income and expenses: the losses in the other income and expenses line decreased compared to the previous quarter by 20.71% due to the higher sales in raw milk.

-Operational profit: increased by 42.37% compared to the previous quarter due to Sales increase and production efficiency.

-Financing charges: increased by 2.46% despite the reduction in the outstanding loans due to the increase in the borrowing cost.

-Zakat provisions and expenses: increased due to the actual payment of Zakat that related to agricultural products.

Reason for increase (decrease) in net profit for current period compared to the similar period of the previous yearThe increase in net profit in the current period compared to the similar period last year by 4.36% is due to:-Sales Revenue: the total company sales increased by 2.37% due to the higher demand on the company products despite the decline in performance for the total market.

-Gross profit: Gross profit increased by 5.41% affected by the increase in sales and the productivity that generated by the Manufactory that reduces the production cost.

-Selling and marketing expenses: Selling and marketing expenses decreased by 5.28% due the reduction in some items of expenses as an impact of the cost cut programs.

-General and administrative expenses: general and administrative expenses increased by 20.84% due to higher spending on professional and consultancy fees to support the company’s strategic growth direction.

-Other income and expenses: the increase in loses in the OIE line is mainly due to the profit recognized in the same period last year for the sell out of equity investment Taseel which negatively impacted the net profit of the current period.

-Operational profit: Operational profit increased in the current period by 12.08% compared to similar period last year due to the increase in sales and the decrease in the operational cost.

-Financing charges: increased by 2.40% in the current period due to the increase in the borrowing cost rate despite of the reduction in the outstanding loans.

-Zakat provisions and expenses: in the similar period last year the company obtained the final zakat declaration that was having positive impact and reduced the zakat expenses in the similar period last year, hence the zakat expenses and provision increased in the current year and impact the net income negatively.

Type of the external auditor’s opinionUnmodified opinion
Reclassifications in quarter financial resultNotes, disclosure and elements of the comparatives Interim condensed Financial Statements have been represented, regrouped or reclassified to meet the applied accounting policies for the current period which have been prepared according to the International Financial Reporting Standards IFRS which is endorsed by SOCPA to reflect any changes in the accounting policy.For more information refer to the note B-3 that related to accounting policy changes.

External Auditors opinion: External auditors opinion is unmodified

Additional Information1-The comprehensive income for the current quarter reached SR.35.13 M compared to 17.33 M for the similar quarter last year with an increase of 102.78%.2-The comprehensive income for the current period reached SR.49.62 M compared to 47.55 M for the similar quarter last year with an increase of 4.36%.

3-The comprehensive income for the current quarter reached SR.35.13 M compared to 19.51 M for the previous quarter in the same year with an increase of 80.07%.

4-Total revenue for the current quarter reached SR. 574.71 M compared to SR. 510.76 M for the similar quarter last year with an increase of 12.52%.

5-Total revenue for the current period reached SR.1,608.51 M compared to SR. 1,571.34 M for the similar period last year with an increase of 2.37%.

6-Total revenue for the current quarter reached SR. 574.71 M compared to SR. 559.72 M for the previous quarter in the same year with an increase of 2.68%.

7-The gross profit for the current quarter reached SR. 221.26 M compared to SR. 179.16 M for the similar quarter last year with an increase of 23.50%.

8-The gross profit for the period reached SR. 596.18 M compared to SR. 565.85 M for the same period last year with an increase of 5.41%.

9-The gross profit of the current quarter reached SR. 221.26 M compared to 212.38 for the previous quarter in the same year with an increase of 4.18%

10-The operational profit for the current quarter reached SR. 54.49 M compared to SR. 24.33 M for the similar quarter last year with anincrease of 124%.

11-The operational profit for the current period reached SR. 104.43 M compared to SR. 93.17 M for the similar period last year with an increase of 12.08%.

12-The operational profit of the current quarter reached SR. 54.49 M compared to SR. 38.27 M for the previous quarter in the same year with an increase of 42.37%

13-The share holders equityas of 30 Sep 2018 no minority equity is SR.1,474.94 M compared to SR. 1,425.32 M as end of December 2017 with an increase of 3.48%

14-The share holders equityas of 30 Sep 2018 no minority equity is SR.1,474.94 M compared to SR. 1,442.75 M as of 30th September 2017 with an increase of 2.23%

15-The earning per share for the current period is SR. 0.59 compared to 0.56 for the same period last year.

The company announces the stoppage of planting all the types of forage in all its related projects inside KSA on 4th November and any financials impact will be announce before the end of the fiscal year of 2018.