Saudi Paper says accumulated losses hit 52.7% of capital

Saudi Paper Manufacturing Co. (SPM) has said in a bourse statement its accumulated losses have reached 52.7 percent, or SAR 129.13 million of capital.

The company has appointed Al-Sudais Certified Public Accountants to audit the accounting policies of selling and repurchasing land plots in the period from 2012 to 2016.

The move came in response to the external auditor’s notes on SPMC’s quarterly results for the period ending June 30, 2019.

The report, issued by the auditor on those land plots and approved by SPMC’s board of directors on Sept. 29, stated that the value of recovered land plots is required to be reduced to the pre-sale value recorded in the 2012 books.

Accordingly, the land plots’ value was cut by SAR 33.05 million, leading to an increase in the company’s accumulated losses.

The accounting incident dates back to earlier periods and has no impact on SPMC’s operations or cash flows, the company added, expecting it to enhance the current capital restructuring process.

SPMC’s board of directors has started taking the required regulatory procedures for companies with losses exceeding 50 percent of capital, with regard to disclosure and protection of shareholders’ interest.

The rules regulating Saudi-listed companies with accumulated losses of more than 20 percent of capital will be applied, the paper manufacturer added.

On Sept. 16, the company’s board recommended a 39.2 percent capital cut to offset accumulated losses, Argaam reported.