A 2% increase in gross profit, primarily due to a 24% decrease in the cost of sales resulting from lower raw material prices and reducing manufacturing operating costs. Despite a decrease in sales volume, and the company’s strategic shift in its sales channels as part of its expansion plan, the gross profit increased. It is worth noting that the company managed to reduce the cost margin by 7%.

A 5% increase in operating profit, resulting from growth of gross profit and an increase in other revenue. The increase in other revenue is attributed to the company’s investment of its cash surpluses in Islamic financing deposits, as well as the utilization of its transportation fleet for customer cargo transportation. The rise in operating profit occurred despite an increase in selling and distribution expenses, general and administrative expenses, associated with the company’s expansion plans, including the opening of new branches, along with expenses related to new projects and the increase in fuel costs for sales vehicles and transport trucks due to higher fuel prices.

Furthermore, Zakat provisions decreased according to estimates of the company’s Zakat base, despite an increase in financing costs.

The net profit for the current quarter increased by 22% compared to the previous quarter of the current year. This increase can be attributed to the following reasons:

A 10% increase in gross profit, resulting from a 10% increase in sales and the company’s ability to maintain sales costs in line with previous rates during the preceding quarter.

A 21% increase in operating profit, driven by the growth of gross profit as well as the increase in other revenue sources due to the company’s investment of its cash surpluses in Islamic financing deposits and the enhancement of its transportation fleet. Additionally, the company managed to maintain general and administrative expenses at their lowest levels. This increase in operating profit occurred despite an increase in selling and distribution expenses due to the company’s expansion in its sales channels according to its expansion plan.

Moreover, financing expenses decreased by 29% due to the financial flexibility of the company and its ability to meet its obligations, along with the stability of Zakat provisions.

The net profit for the first nine months of 2023 decreased by 12% compared to the same period of the previous year. The reasons for this decrease are as follows:

A 5% decrease in gross profit, despite a 15% decrease in sales. This can be attributed to the company’s ability to reduce sales cost margins by 4%. The decrease in sales occurred because of redistributing sales capacities during the first half of the current year to align with the company’s expansion plans and the opening of new branches.

An increase in selling and distribution expenses, as well as general and administrative expenses, due to the company’s expansion in opening new branches and strengthening its sales channels. Additionally, the costs of transportation and distribution increased due to rising fuel prices.

An increase in other revenues resulting from the company’s investment of cash surpluses in Islamic financing deposits and the utilization of its fleet to provide transportation services to its customers.

An increase in financing expenses due to the company’s expansion in leasing activities, despite a decrease in Zakat provisions to align with the Zakat base.

The current revenues mark the beginning of the production process, the company said in a statement to Tadawul today.

Naqi Water also stated that the financial impact of the project is expected to appear in the fourth quarter of 2023, underscoring its commitment to its plan to increase production and sales capacity.

In July, Naqi Water signed a contract to acquire a poultry project for egg production from Abdullah bin Saleh bin Abdullah Al-Bethi for Poultry in Qassim for SAR 7 million, according to data available on Argaam.

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.

Dividends per share for the fiscal year 2022 was 15% equivalent to SAR 1.5 per share, while dividends per share for the first two quarters 2023 reaches 10% equivalent to SAR 1 per share.

The eligibility of dividends shall be for the shareholders at the close of trading on Thursday, 24 August 2023 Corresponding to 7/2/1445H, as per the Company’s registered shareholders in the register of the Securities Depository Center Company at the end of the second trading day following the eligibility date.

The company also reminds all the shareholders to update their information and to make sure to link their bank accounts numbers to their investment portfolios to ensure the deposit of any future dividends without any delay.

The company would like to draw the attention of the non-resident foreign investors that the cash dividend distribution which is transferred by the resident financial broker is subject to a withholding tax of 5% according to the provisions of Article (68) of the Income Tax Law and Article (63) of its Implementing Regulations.

The company welcomes inquiries from shareholders that can be communicated to through the Investor Relations department via the following communication Email:

investor.relations@naqiwater.com

The management of Naqi Water Company, represented by the Managing Director and CEO, Abdulaziz Al-Sayegh, and the CEO of the Youth Club, Khalif Al-Hoshan, signed the sponsorship contract on Wednesday evening. The signing ceremony also witnessed the presence of the Chairman of the Board of Directors of the Naqi Water Company, Mr. Amin Al-Mallah, and the presence of the Chairman of the Board of Directors of the Youth Club, Mr. Khaled Al-Baltan. We wish Al-Shabab Club and all the Kingdom’s clubs continued success.

Firstly, Naqi Water Company operates in a Sharia-permissible field.

Secondly, the company did not borrow or invest in anything that is impermissible

under Islamic and Sharia principles.

Thirdly, the company does not have any revenue from impermissible sources.

– Naqi Water Company confirms to its shareholders and the public that all investment deposits with the company are Islamic Murabaha deposits, and the company’s only loan was also obtained through the Islamic Murabaha approach.

– The company has previously disclosed its Sharia compliance commitment in its prospectus and the Board of Directors’ report for the year 2022, regarding its investments and loans.

– The company has provided all information to several Sharia classification bodies and investment funds interested in the Islamic legitimacy of companies’ shares, which seek accuracy in their decisions and classifications, in commitment to the company’s transparency and disclosure.

– The company has not received any inquiry from the entity that published the incorrect classification, which issued its judgment based solely on the financial statements as the only source for preparing its classification without referring to other disclosure means according to their admission, despite the availability of subsequent data proving the incorrect classification, which led to presenting conflicting data with the objectives of Sharia classification.

Naqi Company plans to actively invest in the poultry sector as part of its diversification strategy and due to the strong opportunity for this business.

This investment has been decided as part of Naqi’s plans to diversify its operations and utilize its investing capabilities in the food production sector.

The project consists of owned land, poultry breeding sheds, egg-laying chicken coops, and poultry farming supplies and operating equipment.

In addition to eggs production license issued from the Ministry of Environment, Water and Agriculture.

The project is in Unaizah governorate in Qassim on 447,676 Squared Meter of land.

Naqi will own 100% of the project’s assets. And the total value of the contract will be self-financed by Naqi Water without any external funding.

The financial impact is expected to appear by the first quarter of 2024.

The contract value and the factory’s construction costs will be self-financed by the company without the need for any external financing.

The financial impact of the new factory in Riyadh is expected to start by the end of the first quarter of 2024.

The contract for acquiring the industrial property is unconditional and was signed on 28/5/2023.

The total value of the contract for acquiring the industrial property is SAR 6,150,000.

Financial Impact on the Change: There is no financial impact of the change.
Additional Information: The company would like to point out that there are no related parties involved in the transaction.

The company confirmed in a statement today on Tadawul that the financial impact of the project is expected to begin appearing during the fourth quarter of the current year 2023, indicating its commitment to its plan to increase production and sales capacity.

According to data available on Arqaam, last July, Naqi Water Company signed a contract to purchase a poultry project for egg production from the Abdullah bin Saleh bin Abdullah Al Bathhi Poultry Establishment, in the Qassim region, at a value of 7 million riyals.

The company had announced the signing of an agreement to supply 103,000 Lohmann egg-producing poultry, at a value of 2.4 million riyals, indicating that the supply agreement will contribute to utilizing the project’s current capacity to reach 85% compared to 42% when purchasing the project, and will also contribute to increasing Production capacity increased by 161% compared to the previous production capacity.