NADEC swings to SAR 18.2 mln profit in Q1 2020

The National Agricultural Development Company (NADEC) reported a net profit after Zakat and Tax of SAR 18.2 million for the first quarter of 2020, as against a loss of SAR 3.7 million in the same period last year.

The increase in profit was attributed to 5.41% rise in revenue year-on-year (YoY) driven by higher demand for the company's products, which in turn increased the sales volume. Higher profits were also attributed to loss of derivatives worth SAR 20.77 million in the same quarter last year.

In addition, higher profits were driven by 26.76% decline YoY in finance costs due to lower interest rates and borrowings, and 10.84% decline YoY in impairment losses on trade receivables.

Higher profit was offset by a 2.11% rise in cost of sales, 2.95% higher sales and marketing expenses and 20.83% higher Zakat expenses in Q1.

Gross profit in Q1 decreased by 0.40% YoY due to higher cost of sales, while operating profit decreased by 10.57% YoY due to higher cost of sales and marketing.

On a sequential basis, the net profit for the current quarter reached SAR 18.19 million compared to net loss of SAR 60.01 million for the previous quarter.

Higher net profit was attributed to 9.18% increase in revenue, and 20.53% decline in finance costs in the current quarter and development costs of project land in Sudan in the previous quarter.

This was despite a 1.95% increase in cost of sales, 0.83% rise in sales and marketing costs, SAR 2.51 million worth of other expenses in the current quarter, and 19.83% rise in Zakat expenses in the current quarter, the company said.

Gross profit in Q1 rose by 3.60% on a sequential basis driven by 9.18% higher sales, while operating profit increased by SAR 74.83 million due to higher sales, lower finance cost and absence of one-off expenses.