ELEMENT LIST CURRENT QUARTER SIMILAR QUARTER FOR PREVIOUS YEAR %CHANGE PREVIOUS QUARTER % CHANGE
Sales/Revenue 58.8 45.2 30.088 48.5 21.237
Gross Profit (Loss) 5.6 5.1 9.803 8.2 -31.707
Operational Profit (Loss) -3.3 -1.7 94.117 -0.7 371.428
Net Profit (Loss) after Zakat and Tax -5.2 -3.4 52.941 -1.5 246.666
Total Comprehensive Income -5.2 -3.4 52.941 -1.5 246.666
All figures are in (Millions) Saudi Arabia, Riyals
ELEMENT LIST CURRENT PERIOD SIMILAR PERIOD FOR PREVIOUS YEAR %CHANGE
Sales/Revenue 107.3 93.5 14.759
Gross Profit (Loss) 13.8 15.2 -9.21
Operational Profit (Loss) -4 4.2
Net Profit (Loss) after Zakat and Tax -6.7 0.8
Total Comprehensive Income -6.7 0.8
Total Share Holders Equity (after Deducting Minority Equity) 122 142.1 -14.144
Profit (Loss) per Share -0.59 0.07
All figures are in (Millions) Saudi Arabia, Riyals
ELEMENT LIST EXPLANATION
The reason of the increase (decrease) in the net profit during the current quarter compared to the same quarter of the last year is The reasons lie behind increased net loss for this quarter compared to net loss for the corresponding quarter of 2020 is mainly due to:

1- Selling and distribution expenses are higher because of increased shipping price globally as well as the expansion of opening new branches in several regions for the subsidiary (FPC) inside and outside Saudi Arabia.

2- Increase in Zakat provision based on a forecast of the short term loans will be included in Zakat calculation in case of continuous governmental initiatives, particularly the initiative of deferred payment program related to postpone the due payment with no interest up to the end of 2021.

3- Expected credit losses provision has been increased for FPC in accordance with IFRS 9, because of growing turnover and the ongoing credit relationships with some strategic clients as well as delayed due payments for some clients.

These results achieved in spite of:

1- Increase in gross profit resulted from higher sales volume in FIPCO & FPC, and improved profit margin in FPC, while the margin is lower in FIPCO as a result of the sudden and ascending increase in the main raw materials prices, in addition to the increase in production costs due to increase in the minimum wage for Saudis, as the number of workers in the company and its subsidiaries is 1000, including 92 Saudis and 132 Saudi women.

2- General and administrative expenses are lower, as a result of increased production capacity in FPC.

The reason of the increase (decrease) in the net profit during the current quarter compared to the previous period of the current year is The net loss achieved for this quarter is higher compared to net loss for Q1 of 2021 is mainly due to:

1- Decrease in gross profit resulted from sudden and ascending increase in the main raw materials prices, in addition to the increase in production costs due to increase in the minimum wage for Saudi employees, although sales are growing.

2- Expected credit losses provision has been increased for FPC in accordance with IFRS 9, because of the ongoing credit relationships with some strategic clients as well as delayed due payments for some clients.

3- Selling and distribution expenses are higher because of increased shipping price globally as well as the expansion of opening new branches in several regions for the subsidiary (FPC) inside and outside Saudi Arabia.

4- Decrease in realized and unrealized gains of investments at fair value through profit or loss during Q1- 2021.

However the general and administrative expenses are lower as a result of making provisions during Q1- 2021.

The reason of the increase (decrease) in the net profit during the current period compared to the same period of the last year is FIPCO achieved net loss of SR 6.7 million during the first half of 2021, compared to net profit of SR 0.825 million for the corresponding period of 2020 because of the following:

1- Decrease in gross profit resulted from sudden and ascending increase in the main raw materials prices, in addition to the increase in production costs due to increase in the minimum wage for Saudi employees, in spite of growing turnover for both FIPCO & FPC.

2- Expected credit losses provision has been increased for FPC in accordance with IFRS 9, because of growing turnover and the ongoing credit relationships with some strategic clients as well as delayed due payments for some clients, on the other hand, Reversing of the credit losses provision in FIPCO due to the absence of its purpose, as main due amounts were collected and the credit relationships was redesigned with some clients.

3- Selling and distribution expenses are higher because of increased shipping price globally as well as the expansion of opening new branches in several regions for the subsidiary (FPC) inside and outside Saudi Arabia.

4- General and administrative expenses are higher as a result of making provisions and hiring new cadres in spite of increased production capacity in FPC.

5- Decrease in other income arising from impairment of capital assets for low economic viability and replacing with new highly efficient assets, which will positively affect production capacity during the first half of 2021.

6- Increase in Zakat provision based on a forecast of the short term loans will be included in Zakat calculation in case of continuous governmental initiatives, particularly the initiative of deferred payment program related to postpone the due payment with no interest up to the end of 2021.

These results achieved in spite of:

1- Decrease in banking charges as a result of the governmental initiatives (represented by SAMA) in order to minimize the impact of the coronavirus outbreak (Covid-19), particularly the initiative of deferred payment program related to postpone the due payment with no interest.

2- Realized gains of investments at fair value through profit or loss.

Statement of the type of external auditor’s report Unmodified conclusion
Reclassification of Comparison Items Certain Comparative figures have been reclassified to be consistent with the presentation of the current period presentation.
Additional Information – The main reason lies behind decrease in total shareholders’ equity (after deducting minority equity), re-evaluating the difference in the acquisition of the Non – Controlling interest amounted to SR 25 million which led to potential liability based on the study of potential liability evaluation prepared by end of fiscal year 2020. As a result of acquisition agreement announced on Tadawul website on March 2, 2020.

– The balance of non-controlling interest has been adjusted as of the P&L of FPC by end of fiscal year 2019, after reclassification of financing gains in FPC to cope up with the IFRS, which reflected on The total shareholders’ equity, as clarified in details in the disclosure No. 32 of the consolidated financial statement for the fiscal year 2020.