Equipment House 9M 2023 profit dips 38% to SAR 26.4 mln; Q3 at SAR 17.6 mln
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Scientific and Medical Equipment House Co. (Equipment House) reported a 38% profit fall in the first nine months of 2023 to SAR 26.4 million from SAR 42.9 million a year earlier.
Financials (M)
| Item | 9m 2022 | 9m 2023 | Change |
|---|---|---|---|
| Revenues | 524.93 | 546.70 | 4.1 % |
| Gross Income | 120.77 | 92.50 | (23.4 %) |
| Operating Income | 59.95 | 50.30 | (16.1 %) |
| Net Income | 42.87 | 31.50 | (26.5 %) |
| Average Shares | 30.00 | 30.00 | - |
| EPS (Riyals) | 1.43 | 1.05 | (26.5 %) |
The company reported an overall rise in finance costs (FCs) and direct operational costs, mainly labor, sub-contractor, spare parts and consumable materials.
Equipment House recorded revenues from finalized projects in the corresponding period of 2022, which bolstered net profit.
Current Quarter Comparison (M)
| Item | Q3 2022 | Q3 2023 | Change |
|---|---|---|---|
| Revenues | 186.07 | 206.60 | 11.0 % |
| Gross Income | 36.03 | 35.60 | (1.2 %) |
| Operating Income | 15.94 | 26.70 | 67.5 % |
| Net Income | 8.79 | 19.80 | 125.3 % |
| Average Shares | 30.00 | 30.00 | - |
| EPS (Riyals) | 0.29 | 0.66 | 125.3 % |
In 2022, higher profit margins were reported on the completion and delivery of some projects.
By contrast, net revenue grew by 8% year-on-year (YoY) on winning new contracts and the renewal of existing ones.
The third-quarter bottom line more than doubled year-on-year (YoY) to SAR 17.6 million driven by a 14% YoY revenue jump. The company also started new projects, which were earlier announced.
In addition, it reassessed the provision for expected credit losses during the current quarter, leading to a decline of SAR 11.2 million in the provision based on the risk ratios related to historical events for collecting government receivables.
Net profit also saw a spike from SAR 1.94 million in Q2 2023 as net revenue leapt by 11% quarter-on-quarter (QoQ). Equipment House also embraced on new projects, recognizing additional operating revenue.
Total shareholders’ equity, before minority interest, declined to SAR 496.31 million as of Sept. 30, 2023, from SAR 496.32 million in the prior-year period.
Financial results (Million)
| Period | Revenues | Change | Gross Income | Change | Operating Income | Change |
|---|---|---|---|---|---|---|
| Q1 2023 | 164.94 | 1.5 % | 30.88 | (18.6 %) | 12.30 | (43.7 %) |
| Q2 2023 | 190.78 | 8.2 % | 29.89 | (36.2 %) | 8.27 | (62.7 %) |
| Q3 2023 | 206.60 | 11.0 % | 35.60 | (1.2 %) | 26.70 | 67.5 % |
Profit Performance (Million)
| Period | Net Income | Change | EPS(Riyal) | Extraordinary Income/Expense | Net Profit Before Unusual Items | EPS Before XO Items |
|---|---|---|---|---|---|---|
| Q1 2023 | 6.86 | (59.0 %) | 0.23 | - | 6.86 | 0.23 |
| Q2 2023 | 1.94 | (88.8 %) | 0.06 | - | 1.94 | 0.06 |
| Q3 2023 | 19.80 | 125.3 % | 0.66 | - | 19.80 | 0.66 |
Profitability
| Period | Gross Margin | OIBDA Margin | Net Margin Before Unusual Items |
|---|---|---|---|
| Q1 2023 | 20.64 % | 6.45 % | 1.08 % |
| Q2 2023 | 17.91 % | 4.70 % | (1.06 %) |
| Q3 2023 | 17.37 % | 6.26 % | 0.44 % |
Per Share Data (Riyal)
| Period | Shares Outstanding (M) | EPS (Riyal) | Adjusted EPS (Riyal) | Book Value (BV) |
|---|---|---|---|---|
| Q1 2023 | 30.00 | 0.26 | 0.26 | 15.91 |
| Q2 2023 | 30.00 | (0.26) | (0.26) | 15.97 |
| Q3 2023 | 30.00 | 0.11 | 0.11 | 16.56 |
Multiple Ratios (End of Period Price)
| Period | P/E | Adjusted P/E | Price/book |
|---|---|---|---|
| Q1 2023 | More than 100 | More than 100 | 2.93 |
| Q2 2023 | NEG | NEG | 3.24 |
| Q3 2023 | More than 100 | More than 100 | 2.79 |
Business Segments (Million)
Q3 2023
| Period | Operation and maintenance | Sales of medical devices and revenue from after-sales maintenance services | Construction | Medications and Medical Supplies | Meat and Food | Eliminations |
|---|---|---|---|---|---|---|
| Q1 2023 | 132.79 | 14.34 | 10.87 | 9.24 | 1.86 | (4.17) |
| Q2 2023 | 156.37 | 15.33 | 8.78 | 10.49 | 1.83 | (2.01) |
| Q3 2023 | 184.52 | 13.05 | 9.54 | 0.18 | 1.75 | (2.43) |
Analysts Estimates (Million)
| Item | Q3 2023 (e) | Q3 2023 (a) | Change |
|---|---|---|---|
| Average | 6.00 | 17.67 | 194.48 % |
Estimates vs Actual (Million)
| Item | Q3 2023 (e) | Q3 2023 (a) | Change |
|---|---|---|---|
| Al Rajhi Capital | 6.00 | 17.67 | 194.5 % |
| Current | |
| Market Cap (M Riyal) | 1,563.00 |
| Enterprise Value (EV) (M) | 1,770.09 |
| Shares Outstanding ((M)) | 30.00 |
| EPS ( Riyal) (TTM) | 1.53 |
| Book Value (BV) ( Riyal) | 17.78 |
| Par Value ( Riyal) | 10.00 |
| Adjusted P/E (Last12) | 34.01 |
| P/E (TTM) | 34.01 |
| Price/book | 2.93 |
| Return on Average Assets (%) (TTM) | 4.3 |
| Return on Average Equity (%) (TTM) | 8.9 |
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