Dubai: The Saudi Industrial Services Company – which invests in ports, terminals and logistics parks – saw a steep 97.6 per cent drop in net income for the first quarter of 2022, at SR1.2 million from SR49.6 million a year ago. Revenues too were down, by 22.6 per cent to SR196.2 million against SR253.6 million
The downbeat results were attributed to continuing disruptions in logistics in key export markets, from a ‘resurgence of COVID-19 restrictions’, especially in Asia. “Whilst we are likely to continue to see the impact of this in Q2, we expect supply chain pressure to ease later in the year which will positively impact the ports and logistics segments,” said the SISCO CEO Mohammed Al-Mudarres. “We are confident our portfolio of assets and operational expertise will deliver long-term value for our shareholders.”
Apart from the impact on its gateway and transshipment volumes from the ports business, revenues and profitability in the water division were impacted from the ‘temporary’ decrease in production of the Kindasa facility for two months during the quarter. “All issues related to this decrease in production have been resolved and the company expects revenues to return to normal levels for the remainder of the year,” a statement said.
Longer term plans
SISCO is making ‘strong progress’ on the delivery of its five-year strategy for longer term value creation and try and double revenues to SR2 billion by 2025. The partial divestment of a direct equity stake in RSGT last year ‘unlocked significant value and capital for the company to deploy on value accretive investments’ in ports, logistics and water.
“SISCO has a strong pipeline of potential acquisition opportunities that it is actively pursuing,” the company said.
In March last, SISCO completed the acquisition of a 31.7 per cent stake in Green Dome Investments from its subsidiary Saudi Trade & Export Development Company (LogiPoint). The deal ‘reinforces SISCO’s strategy’ of expanding its presence in logistics services and maintaining its position as a leading player with a presence across the logistics value chain.
“The completion of our acquisition of a 31.7 per cent direct equity stake in Green Dome from our subsidiary LogiPoint brings us another step closer to building a highly-integrated logistics platform,” the CEO added. It remains a ‘key pillar of our strategy which will enable us to capture value across the logistics value chain, whilst generating impactful synergies in our portfolio of businesses’.
