DAMMAM, 5 August 2004 — Saudi Arabian Amiantit announced record sales of SR946.2 million during the first six months of the current fiscal year. The sales represented an increase of 33 percent compared with the same period last year. Profits reached SR12.6 million, compared with SR59.8 million for the same period last year.
Financial statements revealed that total assets have increased to SR3.4 million, compared with SR2.9 million for the same period of 2003, an increase of 16 percent. Fixed assets accounted for 33 percent of the total assets for the same period in both 2004 and 2003.
The company said that the lower profits compared with the same period of 2003 were due to the start-up operations of new factories in Saudi Arabia, US and India, and the expansion of factories in Spain and Germany. These are long-term investments and need time in order to recover initial costs before showing profits. Amiantit is confident that during the remainder of this year, these manufacturing facilities will be able to minimize the effects of the first six months due to orders already received that are enabling them to operate at full capacity. This expectation is supported by a clear improvement in the second quarter, during which time the factories were fully operational, compared to the first quarter of 2004. Increases in prices of certain raw materials, such as iron ore, have contributed to lowering profit margins by raising production costs of certain kinds of pipes. The company hopes that prices will gradually stabilize in the near future.
Another factor affecting results for the first six months was that a number of orders to supply government projects were delayed at the request of the contractors for technical and procedural reasons. In contrast, during the first half of 2004, the company secured new orders which brought the total confirmed orders to SR1.3 billion for pipes and pipe manufacturing machines which utilize Amiantit technology. In addition, the company is currently in the final stage of reaching other agreements for supplying pipes and machines and these will be announced in the near future.
The Saudi Arabian Amiantit Company was established in 1968 in Dammam as a limited liability company and was converted into a joint stock company in 1994. It started with a paid-up share capital of SR4,000,000, which currently stands at SR770,000,000. Its shares are traded on the Saudi Stock Exchange.