MEPCO posts positive results in Q1 2020, expects better performance: CEO

Middle East Paper Co. (MEPCO) reported positive financial results in Q1 2020, when compared to the previous quarter, CEO Sami Al-Safran told Argaam in an exclusive interview on Monday, adding these results reflect clear improvement in selling prices.

“The first quarter’s financial results reflect the contracts signed in the previous quarter, when prices have started to recover following a steep decline throughout 2019,” Al-Safran further explained.

The decline in Q1 2020 net profit on an annual basis signaled global prices during the first quarter of 2019, he noted, expecting better performance in Q2 2020, taking into account the increased prices applied by the company in the first quarter of 2020.

MEPCO’s total debt decreased by 3.5% year-on-year (YoY) to SAR 633.4 million in Q1 2020, pushing the debt-to-equity ratio lower to 0.86 – a low ratio compared to other paper manufacturers.

Customer balances stood at SAR 181.1 million in Q1 2020, down 16% from SAR 215.8 million in year-earlier period.

“We expect a strong performance in Q2 2020. However, as uncertainty looms, it’s better to adopt a prudent policy,” Al-Safran said on the coronavirus impact on MEPCO.

MEPCO’s Q1 2020 net profit fell by 29% to SAR 4 million, from SAR 5.8 million in Q1 2019.