An addendum announcement by Naqi Water Company regarding the latest fundamental developments related to the contract to purchase the poultry project for egg production

As a continuation of the company’s strategic plan projects to achieve growth and expansion in its activities, Naqi Water Company announces the completion of the implementation of the contract to purchase the poultry project and the conclusion of agreements to supply egg-producing poultry.

In reference to the company’s announcement on the Tadawul website dated 04-07-2023 regarding signing of a contract to purchase a poultry project for egg production, the company would like to announce to its shareholders the results of the project’s fundamental developments, which are as follows:

I: The company completed all legal procedures pending the purchase of the poultry project, which resulted in Naqi Water Company owning the entire project and 100% of all its assets.

II: The company worked on signing an agreement to supply Lohmann egg-producing poultry with a number of 103,000 birds according to the following:

– The age of the poultry agreed to be supplied is 17 weeks, noting that the poultry shall begin full production at 20 weeks old.

– The supply agreement contributes to utilizing the project’s current capacity to reach 85%, compared to 42% when purchasing the project.

– The agreement contributes to increasing production capacity by 161% compared to previous production capacity.

The company confirms that it is working to exploit the remaining capacity of the project in addition to raising production capacity by increasing the efficiency of production elements.

It is expected that the financial impact of these developments shall begin to be reflected during the fourth quarter of the fiscal year 2023, and in a better way than the initial expectations from the previous announcement.

Financial Impact on the change

The total value of the supply agreement with an amount of SAR 2,410,519 and there is no other financial impact.
Supply agreement was financed internally from the company’s own sources without resorting to financing from any external party.