Anaam CEO says external auditor’s report on business continuity 'inaccurate'

Hassan Al-Yamani, CEO of Anaam International Holding Group

Anaam International Holding Group's CEO Hassan Al-Yamani said the external auditor’s report on the group’s business continuity is “inaccurate”, given the miscalculation of an almost SAR 102 million Zakah provision previously set aside in 2019.

In a phone call with Argaam, Al-Yamani described the external auditor as “selective”. The Zakat provision was required by the Zakat, Tax and Customs Authority (ZATCA) for multiple periods extending more than five years. ZATCA allows the amount to be paid in installments over the assessment period of up to 16 years, meaning about SAR 5 million is supposedly due to be claimed annually. “However, this matter was not addressed by the external auditor, and this is in the worst-case scenario when the case is lost,” he added.

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The CEO expressed displeasure at the auditor’s conclusion on the company’s business continuity, although it owns a building on one of the most prominent streets in Jeddah — Prince Sultan Street. The property was purchased for SAR 325 million and is fully leased, generating an annual income of SAR 23 million. “This building, the market value of which exceeds SAR 380 million, can be sold to cover all obligations in the worst-case scenario,” he explained.

Anaam's increased profitability came thanks to investments over the past three years, including the purchase of the Jeddah building on Prince Sultan Street, paired with the acquisition of a majority stake in Saudi Wasit Factory for Entertainment & Beauty Systems. The acquisition process took time to restructure the company and attract technical cadres. However, its fruits are now being reaped, with potential steady growth in sales and quarterly and annual profit, said the CEO.

He pointed out that the profit achieved from discontinued operations amounted to around SAR 2 million.

As for Anaam's 75% capital increase, Al-Yamani deemed it as a fundamental step in the company’s history for having the potential to trim Alinma Bank's loan by SAR 75 million. It is estimated to add SAR 5 million to the company’s annual earnings this year, representing a 50% increase compared to 2023.

The capital top-up is also aimed at taking over existing business activities that contribute to boosting sales and profit. This is besides developing the local logistics sector by building a refrigerated warehouse serving the sector, especially given that the company is a landowner in Jeddah’s Al Khomrah Logistics Zone, Al-Yamani stated.

He pointed out that the capital increase was expected to generate SAR 9 million in proceeds in 2023. However, by the end of the year, it had already garnered about SAR 11 million, the CEO underlined, saying that Anaam overcame the challenging phase and is now in the growth stage.

According to Argaam's data, Anaam’s profit rose to SAR 4.6 million by the end of Q1 2024, up 38% from SAR 3.3 million in the same period a year ago.