Saudi group East Pipes revenue grows five-fold to $61.2mln

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East Pipes Integrated Company, a leading Saudi-based manufacturer of helical submerged arc welded (HSAW) pipes, has achieved significant sequential pick up in the top line and a turnaround in profitability in the second quarter of FY24.

Announcing its financial results for the second quarter and first half period ending September 30, 2023, East Pipes said its revenues grew nearly five-fold from last quarter to hit SAR230 million ($61.2 million) due to the combined effect of a rise in sales volumes and average sales prices but decreased 24% YoY.

Ebitda for the the second quarter of FY24 rose amounted to SAR34 million when compared to Ebitda loss of SAR5 million; the second quarter of FY23: SAR 20 million), essentially due to improved profitability amid enhanced sales volumes and average sales prices.

For the first half of FY24, the ebitda declined 23% to reach SAR29 million. The ebitda margin was 15% in the second quarter of FY24 (Q1-FY24: -14%; the second quarter of FY23: 7%), and 11% for the first half of FY24, compared to 7% for the first half of FY23.

According to East Pipes, the net profit after zakat and income tax jumped to SAR21 million in the second quarter ofFY24, thus increasing 125% YoY (Q1 of FY24: net loss of SAR19 million; the second quarter of FY23: net profit of SAR9 million), driven by a marked improvement in sales volumes when compared to last year, in addition to enhanced margins.

For the first half of FY24, net profit amounted to SAR2 million, compared to SAR15 million in the first half of FY23.

Cash and cash equivalents decreased 6% YTD to SAR50 million, while total borrowings increased 32% YTD from SAR245 million to SAR 324 million, it stated.

CEO Mohammed Al Shaheen said: "We are proud to have achieved a remarkable improvement in both our top and bottom-line performance in the second quarter of FY24, compared to the previous quarter, as we continue to strategically focus our efforts on reinforcing our market positioning as a leading HSAW pipes manufacturer in the Kingdom."

"We will continue to capitalize on our numerous competitive advantages, which are fundamental pillars guiding the company towards a solid trajectory of future growth. Looking ahead, East Pipes remains focused on enhancing innovation and operational excellence in everything we do, with the ultimate goal being to deliver sustainable value and long-term returns to our shareholders," he added.

Chief Financial Officer Mohamed Darweesh said: "East Pipes has demonstrated its capabilities in achieving solid profitability in the second quarter ofFY24, a testament to our well-established track record in the market, complemented with the continued successful execution of our expanding backlog."

"The fundamental strength and agility of our integrated business model and our solid financial positioning are key drivers that are enabling us to capture emerging opportunities for growth, and with the landmark SAR 1.8 billion contract with Aramco beginning to materialize, we anticipate a further improvement in financial performance during the upcoming period," he added.

Ali Al Makrami, Vice President – Commercials at East Pipes, said: "We continued to reinforce our long-standing and strategic relationships with key business partners during the period, which resulted in the consolidation of our position in both the local and regional markets and is considered an integral component of East Pipes’ growth and development."

The substantial pipeline of large-scale projects in the oil and gas and water sectors in the Kingdom presents remarkable prospects for East Pipes’ operations to flourish.

"As a state-of-the-art manufacturer in this rapidly evolving market, we remain firmly placed to expand our backlog further, secure additional market share, and continue pioneering in supporting KSA’s strategic objectives under the Vision 2030 umbrella," he added.