Al-Yamamah Steel Industries Company, “Al-Yamamah Steel”, turned to a loss of 26.66 million riyals, in the company’s fiscal year ending on September 30, 2022, compared to a net profit of about 207.83 million riyals in the company’s previous fiscal year.
Al-Yamamah Steel said in a statement on Tadawul Saudi Arabia today, Thursday, that the loss shift is due to the increase in the cost of raw materials for the construction and electricity sectors by 55.78% and 14.74%, respectively, in addition to the decrease in the quantity and value of sales of the construction sector by 33.74% and 19%. .63%, respectively.
She added that it is also due to the decrease in selling prices as a result of the sharp decline in the prices of iron ores globally during the third and fourth quarters of the fiscal year 2022 AD as a result of the repercussions of the Russian-Ukrainian war and its impact on the global economy, and this negatively affected the demand for iron products locally, especially the progress of projects under construction. Implementation and delay in awarding any new projects.
The value of the company’s losses in the fourth quarter ending last September 30 amounted to about 96.4 million riyals.
Al-Yamamah Steel explained that as a result of the sharp decline in the prices of the main raw materials for the pipe industry, the cost of sales increased compared to the selling prices.
She indicated that a provision for inventory depreciation amounted to about 56 million riyals as of September 30, 2022 AD, in addition to the negative contribution to the increase in financing costs by 12.8 million riyals, at a rate of 96% over the previous year, as a result of the increase in the balances of short-term loans used to finance purchases of raw materials. As well as the high interest rates on financing globally.
No dividend distribution
In another context, Al-Yamamah Steel Industries Company announced, in a separate statement, the recommendation of the Board of Directors not to distribute cash dividends to shareholders for the second half of the fiscal year ending on September 30, 2022 AD.
The company attributed the reason for the recommendation to contributing to the financing of the company’s future projects, as work is underway on the implementation of the Al-Yamamah wind energy systems project in Yanbu Industrial City, whose trial operation is planned during the third quarter of 2023.