Naqi Water Co. announces its Interim Financial Results for the Period Ending on 2023-09-30 ( Nine Months )

The net profit for the current quarter increased by 8% compared to the same quarter of the previous year. This increase can be attributed to the following factors:

 

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.