SISCO has sufficient liquidity to expand locally, overseas: CEO

CEO Mohammed Al-Mudarres

Mohammed Al-Mudarres, CEO of Saudi Industrial Services Co. (SISCO) said that the rise in global shipping rates clearly weighed on imports and exports, as several traders moved away from importing goods and building inventory until prices subside, which was negatively reflected on the company's revenues.

Al-Mudarres added that diversification maintained the value of SISCO’s portfolio despite these changes.

“SISCO has sufficient liquidity to expand and invest in the local market and overseas,” he added.

Commenting on the financial results of Q4 2021, Al-Mudarres said that net income from the ports segment saw a drop due to a decline in handling of local goods. SISCO's share also declined on the partial sale of its stake in Red Sea Gateway Terminal (RSGT), in addition to attracting strategic partners, the Public Investment Fund (PIF) and COSCO Shipping Ports Limited.

The improvement in 2020 revenues was driven by the strong performance of the ports segment and the acquisition of the northern terminal in Jeddah Islamic Port under the new franchise contract, in addition to other revenues during the year as a result of reversing SAR 75 million provision for asset replacement cost and SAR 11.6 million undue previous obligations, said the CEO.

He explained that the SAR 9 million decline in the cost of financing external debt, and the SAR 31.9 million gains generated from the implementation of IFR 9 had a direct impact on the increase in Q4 2020 revenue.

The CEO also indicated that the financial impact of acquiring 100% of Green Dome Investments LLC will show in early 2022, after the deal revenue was recognized for the month of December only. Therefore, no material impact has not yet been reflected on the group's revenues.

He revealed that SISCO’s 50%-owned Tawzea is part of a consortium that will start operating water and environmental treatment services in the southern sector during the second half of 2022.

The financial impact of Tawzea contracts will be implied under “other investments from associate companies”. This will be added to SISCO’s profit. Tawzea’s financial statements are not consolidated with SISCO, he explained, noting that the financial impact of new projects will appear after the commencement of operations.

Replying to a question about SISCO’s plans for 2022, he said the company has all resources that ensure resilient performance and excellent diversification of its investment portfolio. SISCO sits on ample liquidity that allows it to continue investment, through local expansion in the existing assets, or overseas expansions to achieve cumulative value for the main portfolio.

SISCO will continue adherence to its new strategy that aims to achieve sustainable and long-term revenue for shareholders. It will continue the same approach to generate the best possible returns for shareholders’ interest.

SISCO reported a net profit after Zakat and tax of SAR 57.9 million for 2021, down 58.5% from SAR 139.4 million in the previous year. The fourth-quarter net losses reach SAR 831,000, Argaam reported.