First Mills H1 2023 profit falls 19% to SAR 108.7 mln; Q2 at SAR 34.9 mln

First Milling Co. (First Mills) reported a 19% decline in net profit to SAR 108.7 million for the first half of 2023 from SAR 133.7 million in the year-earlier period.

The lower profit was attributed to higher interest expenses, which were recorded in the company’s books from Sept. 15, 2022, after the merger completion with the parent company, Al Raha Al Safi.

Financing costs (FC) increased by SAR 25 million for H1 2023, as the company has added long-term financing to its financial statements following the merger since Sept. 15, 2022. 

The milling company incurred one-off costs of SAR 2.4 million on the listing of its shares on Tadawul. Higher insurance and transport costs also weighed on the first-half results. First Mills allocated a provision for spare parts in line with the accounting standards and the new policy it adopted since Q4 2022.  

In Q2 2023, First Mills’ net profit dipped 43% to SAR 34.9 million from SAR 61.2 million in Q2 2022, as FC rose by SAR 13 million year-on-year. The company recorded higher transport and insurance costs, in addition to spare parts provision.  

The net earnings fell by 52.7% from SAR 73.7 million in Q1 2023. Sales fell by SAR 42 million as Mill C was halted for capacity upgrade. The company’s earnings were also impacted by increased FC and SAR 2.4 million one-off listing expenses.   

Total shareholders’ equity, no minority interest, increased to SAR 863.34 million as of June 30, 2023, from SAR 714.42 million in the earlier-year period. 

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