Low sales of converted products weighed on Q3 results: Saudi Paper CEO

Yousseri Elbishry, CEO of Saudi Paper Manufacturing Co.

Saudi Paper Manufacturing Co.’s (SPM) earnings in Q3 2024 came under pressure as sales of converted paper products declined due to seasonal holidays, CEO Yousseri Elbishry told Argaam in an interview.

This led to lower sales volume and a drop in overall profit.

The sale of manufactured goods fell by 16%, while the sale of paper rolls grew by 12%, Elbishry said. Exports constituted 13% of the total sales at the end of the third quarter.

The average prices of raw materials amounted to $700 per ton, as the company maintained profit margins by adjusting the selling prices in line with the cost of pulp.

Commenting on the liquidation of the subsidiaries in Jordan, Elbishry noted that the liquidation process resulted in a loss of SAR 1.1 million, due to the forex losses that were booked on the sale transaction, in addition to the expenses of liquidation process.

Elbishry expects that the sale of stake in Moroccan Paper Manufacturing Co. (MPM) would have a positive impact, especially since a provision had been previously set aside for the full investment. SPM plans to invest the sale proceeds in financing capital business, he further indicated.

Meanwhile, he stated that the receivables provisions decreased by SAR 2.4 million, compared to last year.

On the performance of the fourth quarter, the CEO expects the company's positive performance to continue amid stable prices.

According to data compiled by Argaam, SPM reported a net profit of SAR 82.9 million in the first nine months of 2024, climbing 59% year-on-year (YoY). Q3 profit fell 8% YoY to SAR 20.6 million.