SMASCO profit up 11% to SAR 166.3M in 2023; Q4 at SAR 44.5M

Saudi Manpower Solutions Co. (SMASCO), which will list shares soon on the Saudi Exchange (Tadawul), posted an 11% rise in net profit to SAR 166.3 million in 2023, compared to SAR 150.3 million a year earlier.

The annual profit was driven by an increase in other revenues, which is primarily attributed to the rise in returns from Murabaha financing, reaching SAR 15 million for the current period, compared to SAR 1.4 million in 2022.

The 12-month period includes losses from discontinued operations of SAR 9.3 million due to the company's waiver of its entire stake in the businesses of both Esnad for Building and Housing Cleaning Services Co. and Areeb Human Resources Co. to Al Holoul Al Mutakamela Holding Co.

The gross profit margin (GPM) expanded from 12% in 2023 to 13% in 2022, thanks to an 87% drop in the ratio of sales costs to total revenues.

Despite the increase in administrative and marketing expenses, the operating profit margin remained unchanged at 9% in 2023.

By contrast, the company recorded a slight decrease in revenues to SAR 1.82 billion from SAR 1.83 billion in 2022. This is mainly due to the decrease in revenues from private companies as well as also governmental and semi-governmental companies, partially offset by higher revenues from the individual segment.

SMASCO also reported higher financing costs for employee benefits, lease contracts, as well as Zakat expenses.

The fourth-quarter net earnings rose by 10% to SAR 44.5 million as GPM rose to 15% from 11% in Q4 2022. The operating profit margin also rose from 9% to 10% in Q4 2023.

Compared to Q3 2023, the bottom line marginally increased by 0.6% from SAR 44.20 million.

Shareholders' equity, no minority interest, amounted to SAR 521.7 million as of Dec. 31, 2023, down from SAR 528.3 million a year earlier.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the current period reached SAR 201.1 million, compared to SAR 197.9 million in 2022.

Cash flows from operating activities came in at SAR 182.1 million in 2023, down from SAR  198.1 million a year earlier. Capital expenditures reached -SAR 27.8 million for the current period, compared to -SAR 27.9 million in 2022.

Cash flows from financing activities stood at -SAR 184.6 in 2022.

SMASCO’s cash balance at the end of the current period dropped to SAR 35.6 million, from SAR 115.3 million.

The company’s shareholders approved on Nov. 15, 2020, an increase in capital from SAR 300 million to SAR 400 million by capitalizing SAR 100 million riyals from retained earnings.

They also greenlit on May 29, 2023 a 10-for-1 stock split, raising the total number of ordinary shares to SAR 400 million, with a fully paid nominal value of SAR 1 each.

On Dec. 14, 2023, SMASCO’s board decided to distribute cash dividends of SAR 120 million, to be distributed within 15 days from the date of the board's decision.