|The reasons lie behind increased net loss for this period compared to net loss for the corresponding period of 2020 is mainly due to:
1- Decrease in gross profit resulted from ascending increase in the main raw material 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- Selling and distribution expenses are higher because of increased export sales and increased shipping prices globally as well as the expansion of opening retail stores in several regions for the subsidiary (FPC) inside and outside Saudi Arabia.
3- Expected credit losses provision has been increased for FPC in accordance with IFRS 9, in addition to Reversing of the credit losses provision in FIPCO due to the absence of its purpose during the nine months of 2020, as main due amounts were collected and the credit relationships was redesigned with some clients.
4- Decrease in other income arising from impairment of capital assets for low economic visibility and replacing with new highly efficient assets, which will positively affect production capacity during the nine months of 2021, as well as some of governmental support of HRDF and MONSHA’AT has been received during the nine months of 2020.
5- Increase in Zakat provision.
These results achieved in spite of:
1- General and administrative expenses are lower, as a result of increased production capacity in FPC.
2- Realized gains of investments at fair value through profit or loss.