East Pipes, Saudi Arabia’s leading manufacturer of Helical Submerged Arc Welded (HSAW) pipes, reported a net loss of SAR 3 million (US$800,00) during the financial year 2022, compared to a net profit of SAR 148 million for FY2021.
“This is primarily a reflection of the large decline in revenue, coupled with the unprecedented increase in the cost of the company’s main raw materials,” the company said in a satement.
East Pipes recorded revenues of SAR 597 million in FY2022 (102 percent), a decline of 36 percent from SAR 936 million during the previous fiscal year.
“This was driven by the delays in releasing and awarding key projects by major clients, and by supply chain interruptions, resulting from the COVID-19 pandemic,” the Saudi company pointed out.
Total sales volumes decreased 26 percent for pipes sales and 23 percent for coating sales, whilst the Sales Price per on decreased by SAR 600 for Pipes and SAR 16 for Coating.
Gross profit decreased 85 percent year-on-year to SAR 35 million from SAR 230 million due to the shrinking production volumes, in addition to a remarkable rise in Cost of Sales per ton, as well as a sharp increase in the cost of the company’s main raw materials during the year.
EBITDA decreased to SAR 39 million (FY21: SAR 246 million) mainly due to the lower revenues, higher costs, and rise in selling and marketing expenses primarily due to restructuring and other costs related to corporate governance.