Al Kathiri Q2 revenue growth driven by lower costs: CEO

Mishaal Al Kathiri, CEO of Al Kathiri Holding Co.

Al Kathiri Holding Co.'s revenues increased to SAR 64 million in the second quarter of 2023, compared with SAR 46 million a year earlier, mainly due to lower costs, CEO Mishaal Al Kathiri told Argaam.

He added that the second quarter witnessed a decline in the costs of basic materials, especially cement, whose price ranges between SAR 140 to 160 in the Central Region, which led to a fall in the company's business costs.

The firm started work on the concrete plants in the Al-Jawan suburb project during the first half of 2023, which contributed to increasing sales strongly.

The higher operating costs were due to an increase in general and administrative expenses after issuing the first tranche of the SAR 500 million sukuk program, the CEO said, indicating that this issuance's costs are temporary and will return to normal.

Revenues are expected to grow in the coming period, thanks to Al Kathiri's work with the National Housing Co. and leveraging the opportunities offered via Etimad platform. This is in addition to starting the implementation of the Public Investment Fund projects, especially as the fund supports all companies operating in the contracting and basic materials sector.

The company is looking for alternative investment opportunities in the coming period amid high-interest rates, which prompts some peers to look for alternative options such as acquisitions or partnerships.

"Al Kathiri is looking for such opportunities to leverage high liquidity," the CEO noted.

The firm's loans are small compared to the size of its capital, the CEO noted, adding that investing in debt instruments mitigated the impact of high-interest rates on the company.

The company reported a net profit of nearly SAR 2.2 million in H1 2023, against a loss of SAR 5.6 million a year earlier, according to data compiled by Argaam.