JEDDAH, 17 January 2007 — The record profit gained by the Saudi Research and Marketing Group (SRMG) in 2006 reflects the success of the restructuring program carried out by its top management during the past years, economic analysts said.
SRMG’s financial results for 2006 will also encourage investors to put their money in its stocks, the analysts said after the company announced that it posted a net profit of SR261 million last year, registering a 44 percent increase compared to 2005.
Nasser Al-Khalaf, financial analyst and member of the Saudi Economic Society, attributed the rise in the company’s profit to an increase in advertisements. He said the printing sector had made an accumulated growth of 153.9 percent during the past three years. He estimated SRMG’s accumulative profit increase during the past three years at 185.5 percent.
Ahmed Al-Tuwaijri, another financial analyst, said the 18 percent growth rate in operation profits would encourage investors to put their money in the company’s stocks. “The net profit accounts for 32.5 percent of SRMG’s capital and this shows the huge revenues it makes and its ability to expand its activities in the market.”
Muhammad Al-Sahli, head of the accountancy department at King Saud University in Riyadh, noted SRMG’s ability to utilize its financial resources in an efficient manner. “The 2006 results show that the company is now in a strong financial position and can go ahead with its expansion projects in the ever growing media, printing and publishing market,” he said. Prince Faisal Bin Salman, chairman of SRMG, said the group, which specializes in printing, publishing and advertising, was set to make greater gains in the coming years as a result of an economic boom in Saudi Arabia and elsewhere in the region.
“We have seen considerable increase in advertisement spending during 2006, more than in 2005 and 2004 and indicators show that this spending is set to grow further,” Al-Arabiya satellite television channel quoted the SRMG chief as saying.
Prince Faisal identified Al-Madina Printing & Publishing Company and Al-Khaleejiah Advertising & Public Relations Company as the largest profit-making firms under the group.
“These two companies have played a significant role in raising SRMG’s profits during the past years,” he said.
He said the SRMG was confident despite the fall in prices of certain shares in the Saudi Stock Market and the resultant losses suffered by investors and companies in the market.
“We see tremendous growth in business activities and the general economic environment is healthy,” he said, adding business activities in different sectors such as services and real estate were unaffected by stock market developments.
He said a final decision on the distribution of dividends would be taken by the company’s general assembly. The company’s board will meet within a month while the general assembly meeting will be held 40 days later, he added.
According to an official statement issued on Monday, SRMG’s total revenues in 2006 grew by nine percent to SR1.159 billion compared to the previous year while total profits in 2006 amounted to SR467 million against SR399 million in 2005.
Operation profits rose by 18 percent from SR207 million in 2005 to SR244 million last year. The group posted a fourth quarter profit of SR68 million in 2006 compared to SR43 million during the same period in 2005, the statement said.
Prince Faisal hoped that SRMG would achieve better results during the current fiscal year. “We have set out short- and long-term strategic plans and started implementing them to take the company to new heights of progress,” he added.
The SRMG strategy was outlined at the group’s first board meeting following the initial public offering in April last year.
