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00:00We have with us Mr. Sha'il Al-Ayed, CEO of Ismint Al-Riyadh.
00:04Welcome, Mr. Sha'il, and thank you for being here.
00:07Let's start with the decline in profits.
00:10It's clear that the decline in sales has affected the first quarter's results,
00:15but what are the main reasons behind this decline in sales?
00:21Welcome, Maysa.
00:23Welcome.
00:24There is no doubt that there is a decline in sales,
00:28and perhaps the reason is that there is a 4% decline in sales in the Kingdom,
00:39but we feel that the decline was more in Riyadh than elsewhere.
00:45The decline in sales in Riyadh was about 10% in the first quarter,
00:56but despite that, the results of the second quarter were good in our opinion,
01:08because despite the increase in production costs,
01:12we already know that the financial impact was 24% of the production costs,
01:21and this has certainly affected the four quarters.
01:26The increase in prices and the increase in market prices during the first quarter
01:33may have improved the performance of the companies and Ismint Al-Riyadh as a whole.
01:41How long do we expect this decline to continue until the end of 2024, Mr. Sha'il?
01:51As for the decline in costs,
01:53this will continue until the project is terminated and the liquid fuel is removed,
02:00because the Ismint factories are part of the project to remove,
02:06or most of the companies are part of the project to remove the liquid fuel,
02:12and therefore, the factory will be filled, God willing, by the end of 2026 with natural gas,
02:19and it will also be connected by the grid to the SIKU or SIKR.
02:28Therefore, the support will continue and the costs will continue until that time.
02:37However, there is a program that we have signed up for,
02:42which is a competitive program for the industrial sector,
02:48and God willing, the company will benefit from this program,
02:54and the effect will be announced in the next quarter, God willing,
03:00and we have already announced in the previous announcement that the effect will be in the coming periods, God willing.
03:10But what kind of effect?
03:12On which pillars will the process of joining the program affect?
03:16Well, the program is a good program in terms of content,
03:24and the ministry, to be honest, is far from being equal in terms of competition,
03:30and therefore, there will be support for the harmful companies,
03:34and one of them is the Ismint of Riyadh in terms of prices,
03:38and therefore, we expect that we will receive equal support
03:42for the Ismint of Riyadh.
03:44The Ismint of Riyadh is a program that is equal to the Ismint of other factories,
03:50because we feed the factories with coal fuel,
03:58and there are factories that work with heavy fuel,
04:02and there are also factories that work with gas.
04:06So, the goal of the program is to be fair and to balance the costs
04:16so that it becomes fair for everyone.
04:18So, we are among the people who are harmed,
04:22and with the support of the program, God willing,
04:26the effect will be reduced from 24.7% to 12%,
04:32and therefore, the effect will be less than before,
04:36and it will be fair for the factories.
04:40Okay, so the other factories are about 12%,
04:43and you were charged 24%.
04:46Is this what we understand, Mr. Sha'el?
04:48Yes, exactly.
04:50Okay, now you are working on the black and white Ismint,
04:56but today, how much storage do you have of both types?
05:02How much is it approximately?
05:06The company has 1,200,000 tons of black Ismint,
05:13while it has more than 200,000 tons of white Ismint.
05:20Okay, and as for the export,
05:22how much is the company making today
05:25on the benefit of this storage in terms of exporting?
05:30As for the black Ismint,
05:33we export a lot to the Gulf,
05:35because we are far from the ports,
05:38and usually, the black Ismint is exported through the ports,
05:42so the black Ismint is available to companies
05:44that are close to the Gulf,
05:46whether it is the Red Sea or the Arab Gulf.
05:51But we are exporting the white Ismint to neighboring countries.
05:56We are exporting it to Iraq, Jordan, Kuwait, Bahrain, Oman,
06:02and we hope to expand to the African markets, God willing.
06:09Okay, how much is the export volume
06:11during this period to these countries, Mr. Sha'el?
06:16Approximately 10%.
06:1810%.
06:19Is there any intention to increase it,
06:21or are you just increasing it now with this percentage?
06:25No, we will continue, God willing.
06:28I mean, we will support this percentage,
06:31God willing, if we don't export it to other countries.
06:35Yes.
06:36Okay, I'm asking you to see
06:39if the export of the white Ismint
06:41is covering part of the non-export
06:45that is happening to the black Ismint,
06:48and therefore, is this equating
06:50the volume of sales between the two types?
06:56We are not exporting a lot,
07:02because, first of all, the quantity is small,
07:05and the profit behind exporting is not big,
07:10but our presence, thank God,
07:14our presence is close to the strategic sources,
07:17gave the company a strong competitive advantage,
07:21therefore, we sell our annual product
07:25inside the country,
07:28whether it is in Riyadh, in the East,
07:30or in the neighboring areas.
07:33Yes, and regarding the costs, Mr. Sha'el,
07:36today with the expansion, and also the factory you are working on,
07:39are you having to resort to any import operations
07:42during this period?
07:45No, currently, thank God,
07:47the financial status of the company is good,
07:50it doesn't have any loans,
07:52we have projects to finance ourselves,
07:55and if the company needs to finance
07:59some additional projects or strategic projects,
08:03it will resort to the industrial fund
08:05or the local banks,
08:08but currently, the company is able
08:11to finance its own projects.
08:16Yes, finally, the distribution will remain
08:19the same strategy until the end of 2024,
08:22to distribute the profits, Mr. Sha'el?
08:26With God's will, if not longer, with God's will.
08:30We wish you all the best.
08:32Mr. Sha'el Al-Aida,
08:33CEO of Esment Riyadh,
08:35you were with us from Riyadh,
08:36thank you very much.