NAJRAN CEMENT

05 May, 2024 08:38

Najran Cement Company announces the annual financial results for the period ending on 2023-12-31

Element ListCurrent YearPrevious Year%Change
Sales/Revenue 485,652535,686-9.34
Gross Profit (Loss) 142,431170,767-16.59
Operational Profit (Loss) 97,731127,436-23.31
Net profit (Loss) 69,434112,809-38.45
Total Comprehensive Income 68,470111,548-38.62
Total Share Holders Equity (After Deducting the Minority Equity) 2,001,7751,975,8051.31
Profit (Loss) per Share 0.410.66
All figures are in (Thousands) Saudi Arabia, Riyals


Element ListAmountPercentage of the capital (%)
Profit (Losses) Resulting From The Change In Investment Propertie’s Fair Value --
All figures are in (Thousands) Saudi Arabia, Riyals


Element ListExplanation
The reason of the increase (decrease) in the sales/ revenues during the current year compared to the last year The decrease in Sales during current year compared to last year is due to a decline sales quantities and selling prices.
The reason of the increase (decrease) in the net profit during the current year compared to the last year is The decrease in net profit during current year compared to the last year is due to a decline in sales, an increase in the cost of production inputs and increase in the finance cost.
Statement of the type of external auditor's report Conservation
Comment mentioned in the external auditor’s report, mentioned in any of the following paragraphs (other matter, conservation, notice, disclaimer of opinion, or adverse opinion) Qualified Opinion We have audited the consolidated financial statements of Najran Cement Company – a Saudi joint stock company (the “Company”) and its subsidiary (collectively with the Company, the “Group”), which comprise the consolidated statement of financial position as at 31 December 2023, and the consolidated statement of profit or loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information. In our opinion, except for the possible effects of the matters described in the Basis for Qualified Opinion section of our report, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2023, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards that are endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements that are endorsed by the Saudi Organization for Chartered and Professional Accountants. Basis for Qualified Opinion 1- As at 31 December 2023, the consolidated financial statements includes ‘property, plant and equipment’ with a carrying amount of SR 2,030 million and depreciation expense amounting to SR 80.7 million for the year then ended. The Group applies declining balance method for depreciating property, plant and equipment, which is applied incorrectly. We have requested from management, but not been provided, an assessment of the impact of the correct application of the declining balance method on the carrying amount of property, plant and equipment as at 31 December 2023. Consequently, we were unable to determine whether any adjustments are required to the consolidated financial statements as at and for the year ended 31 December 2023 and prior years. 2- As mentioned in Note 10, the inventories balance as of 31 December 2023, includes consumable spare parts with a gross carrying value of SR 118 million. However, there are long-aged (slow moving) items which form part of these consumable spare parts. We were unable to obtain sufficient audit evidence to conclude whether the management’s assessment of the provision for slow moving items is reasonable and were unable to determine whether any adjustments to the consolidated financial statements as at and for the year ended 31 December 2023 were necessary
Reclassification of Comparison Items Certain figures have been reclassified to fit with the presentation of the current period financial statements, additionally adjustments were made to some balances of previous periods in accordance with International Accounting Standard No. 8, as shown in note No. 32 of the current year annual financial statements.
Additional Information First of all, the company would like to clarify to its esteemed shareholders that the reason for the delay in publishing the annual financial results for the period ending on 12/31/2023 is that the company was working to complete the additional requirements by the external auditor, which required contracting with external consulting parties to conduct some studies and reports, which took more time than usual for preparation and then review. All comments were closed, with the exception of what was stated by the external auditor in the reservation mentioned above. The company would also like to clarify that with regard to the basis for qualified opinion No. (1) by the external auditor, the company has been using the declining balance method for depreciation since the start of its operation in 2007 AD, and the company believes that it is applying it correctly in accordance with generally accepted accounting standards. Nonetheless, the company appointed a certified external accounting expert to review the depreciation method and confirm the validity of its application, and that study has not been completed. The company will take the necessary accounting action immediately upon completion of the review, if required. Regarding the basis for reservation No. (2) by the external auditor, the company would like to clarify that it has appointed a specialized external technical company to study the condition of the company’s consumable spare parts and determine any decline in its value. Based on the result of that study, the company has made sure to have sufficient provision as at the end of the year 2023 AD. Thus, management believes that there is no need to make any additional provision in accordance with in accordance with generally accepted accounting standards. The company assures its esteemed shareholders of its constant keenness to follow the best practices by applying internal policies and procedures prepared by specialized consulting companies, and reviewed periodically to ensure their effective implementation through independent consulting bodies.

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