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United Wire Factories Co. (Aslak) is seeking new acquisitions and partnerships whether in the sectors related to its activities, or new ones, after its Q2 profit took a hit due to the Saudi construction sector slowdown, chief executive Abdulkarim Al Shamekh told Argaam on Sunday.
The company is also planning to focus more on high-income products, he added.
"Aslak is still taking effective measures for cutting costs, particularly factories' supply costs and complete restructuring," Al Shamekh added. "We hope these measures could pay off soon.”
Al Shamekh said Aslak isn’t planning to suspend activities at any of its factories. Rather, it’s looking to develop operations, reduce production costs, and focus on high-income products.
Fierce competition in a stagnant market led to lower prices and steep declines in the construction sector's profit margins. The holy month of Ramadan and other seasonal holidays also fell in second quarter.
Like its peers, the company guarantees its receivables from customers in the construction sector. It also has strong liquidity with no bank debts, the CEO added.
Aslak is keen on benefiting from the Saudi government’s decision to scrap steel export fees, Al Shamekh said, adding that he expects this decision to help rolling mill firms compete with regional peers and improve local steel prices.
The wire manufacturer's Q2 net profit tumbled by 99 percent year-on-year to SAR 493,000.
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