Saudi Pipes’ net profit down 59% to SAR 26.2m for the first nine months of 2014

Saudi Steel Pipes Company, a manufacturer of welded steel pipes, reported a net profit of SAR 26.17m for the nine months ended September 30, 2014, a 59% decrease compared to the same period last year.

A net profit of SAR 6.59m was reported for Q3-2014 compared to SAR 15.6m for Q2.

The company attributed the decline of the first nine months of 2014’s net profit, compared to the same period last year, to the following:

1) Loss from investments on its subsidiary (Titanium and Steel Manufacturing Co., Ltd.) and associate (Global Pipe Company) at total accumulated loss of SAR 24 million because both companies has started to prepare their income statement on January 1 of this year where it is normal to incur loss on the start of operations especially for new industrial factories.

2) Increase of labor cost due to salary increment and increase on number of employees intended for the company expansion projects that will start operating this year.

Q3-2014’s net profit decline compared to the same period last year, was attributed to loss from investments on its subsidiary (Titanium and Steel Manufacturing Co., Ltd.) and associate (Global Pipe Company) at total accumulated loss of SAR 7.9 million and the increase in labor cost due to salary increment and increase on number of employees.

The decline of Q3’s net profit compared to the previous period (Q2-2014) was attributed to the decrease of sales particularly on small diameter pipes due to normal seasonal decrease of sales during summertime, Ramadan and holidays.