National Industrialization Company (2060) Q4 2023 earnings summary

Executive summary

• FY2023 revenue was SR'000 3,566,959 and profit for the year SR'000 220,858, down from SR'000 3,882,862 and SR'000 1,085,714 in 2022.

• Lower operating profit and share of earnings from equity-accounted investees, plus SR'000 226,000 impairment of goodwill, weighed on results.

• Independent auditor issued an unmodified opinion; key audit matters included the SAPCO and ETM acquisitions and asset impairment valuations.

Financial highlights

• Revenue fell to SR'000 3,566,959 from SR'000 3,882,862; gross profit declined to SR'000 364,476 from SR'000 864,289.

• Operating profit was SR'000 413,887 versus SR'000 1,320,783; profit before zakat and income tax was SR'000 475,875 versus SR'000 1,372,676.

• Profit attributable to parent equity holders was SR'000 174,568 versus SR'000 666,346; EPS was SR 0.26 versus SR 1.00.

• Net cash from operating activities was SR'000 149,600 versus SR'000 804,011; cash and cash equivalents at year-end were SR'000 3,630,930.

Outlook and guidance

• Slagger impairment assessment assumes a 13% discount rate, 2% terminal growth and achievement of planned capacity-utilization milestones; reasonable changes in assumptions could alter the outcome.

• Slagger refurbishment and optimization work is proceeding following completion of value engineering; design changes and enhancements intended to support sustainable higher operating rates were being implemented.

• Provisional purchase-price allocations for SAPCO and ETM are to be finalized within 12 months of acquisition; acquired goodwill impairment analysis may change with final valuations.