Saudi Arabia’s SISCO reports 8.7% growth in Q2 revenue to SAR213.2m

Saudi Industrial Services Company (SISCO), Saudi Arabia’s leading investor in ports and terminals, logistics parks and services, and water solutions, has announced its financial results for Q2 and H1 2022.

Revenues for the second quarter of 2022, excluding accounting construction revenue, reached SAR213.2m compared to SAR196.2m for the first quarter, increasing by 8.7 per cent.

Ports segment performance gained momentum after being impacted by ongoing global supply chain disruptions in Q1, which had negatively affected gateway and transshipment volumes.

SISCO’s water segment also showed improvement during the quarter as production and volumes improved following a decrease in production during Q1 2022. The logistics segment performance was broadly stable compared to the previous quarter.

First-half revenues for 2022, excluding accounting construction revenues, were 17.8 per cent behind H1 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.

The gross profit of SAR99.7m for Q2 increased by 10.5 per cent compared to the previous quarter. The gross profit margin for the quarter was 46.8 per cent, compared to 46 per cent in Q1 2022.

For the first half, gross profit was SAR189.9m, 26.5 per cent lower than H1 2021, mainly due to market challenges on its ports segment revenue in Q1, coupled with a decline in water segment revenue during the first quarter.

Net income for the second quarter was SAR3.1m compared to SAR0.8m during the first quarter, due to increased profitability from the Kindasa company coupled with performance improvement from associate companies.

Adjusted net income for H1 2022 declined by 92.2 per cent 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, CEO 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 per cent from the previous quarter, returning to a normalised contribution. Revenues for the ports segment improved by 6 per cent from the previous quarter on the 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 H2 2022 due to the forecast increase in Umrah activities in the kingdom. Meanwhile, estimated growth of 4 per cent 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 SAR1,459.4m as of June 30, from SAR1,486m as of 31 December 2021. Basic and diluted earnings per share stood at SAR0.05 as compared to SAR0.67 for the same period in the prior year.

SISCO said it 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. Its investment approach focuses on value accretive investments that are in line with its strategic focus areas of ports, logistics and water.