SAIC profit growth driven by investing in vital, developing sectors; fair value of portfolio at SAR 1B: CEO

Abdullah Al-Juraish, Saudi Advanced Industries Co.'s (SAIC) CEO

Saudi Advanced Industries Co.'s (SAIC) repositioning of its investment portfolio in vital and developing sectors helped achieve higher profit despite the difficult conditions in 2023, said CEO Abdullah Al-Juraish.

Investing in growth companies and exiting product companies led to recording historical returns for SAIC, keeping pace with the Saudi economy and the Kingdom’s Vision 2030, he told Argaam in an interview.

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The top executive also stated that the company's investment portfolio has an estimated fair value of SAR 1 billion. He pointed out that SAIC is looking for investment opportunities be it inside or outside the equity market.

Below is the full interview with SAIC's CEO:

Q: The company's profit rose to SAR 37.63 million by the end of Q4 2023, compared to SAR 20 million profit in Q4 2022. What is your comment on these results?

A: We were able to make this year’s results the highest in the company’s history by repositioning our investment portfolio in vital and developing sectors. The year 2023 was one of the most difficult years for the Saudi and global economy in terms of high inflation rates, high interest rates, etc. However, we were able to post robust results thanks to hard work and good planning.

Q: How did the company’s repositioning of its investment portfolio impact this year’s gross profit? Which sectors are in focus in terms of investments?

A: Given the focus on the Saudi economy’s trends and the Kingdom’s Vision 2030, we worked in 2023 to revisit our investments and map out a clear-cut plan, in an attempt to exit from product to growth companies. Since January 2023, we indeed began to exit from distressed investments and product companies that suffer from price fluctuations and supply-chain disruptions to growth companies complementing SAIC’s strategy. These companies bode well for sustainable prosperity in the coming years, being the basis of SAIC’s plan. Thanks to the efforts of the board of directors and the executive management, these changes have generated historic returns.

Q: Why did SAIC’s board recommend the distribution of 300,000 shares in Obeikan Glass Co. to shareholders?

A: This falls under the board’s plan to maximize the investment value to shareholders, as Obeikan Glass is one of the company’s most successful investments and an industry leader. It helps expand the investors’ base and fulfill the liquidity prerequisite to the latter’s move from the Nomu-Parallel Market to the main market (TASI).

In December 2023, Obeikan’s board approved transitioning to TASI, poised for completion in 2024. Al Rajhi Capital was named financial advisor on the move.

Q: What about the size of the company’s investment portfolio in Tadawul?

A: SAIC has an investment portfolio worth SAR 1 billion.

Q: Is the company exploring new opportunities in the equity market?

A: SAIC is exploring new opportunities whether inside or outside the equity market. However, given the increased supervision of the equity market amid a high level of disclosure and governance, equity investments are of preference, especially Nomu-listed companies.

Q: What about SAIC’s share of dividends this year?

A: SAIC increased its dividend share this year to SAR 12.11 million, compared to SAR 10.94 million in 2022.

Q: What is SAIC guidance for Q1 2024?

A: We expect SAIC to continue the pursuit of profitability based on 2023 performance and we expect it to demonstrate strong growth this year.