NATPET turns profitable, Alujain’s financial reporting delay ‘unusual’, says CEO

Alujain Holding Corp’s delay to disclose its annual financial results is “unusual” – a matter that raised its shareholders’ concerns, Khalid Zagzoog, CEO and Managing Director of National Petrochemical Industrial Company (NATPET), told Argaam in an exclusive interview on Sunday.

NATPET has submitted its financial statements on time to Alujain, which needs just two or three days to fill in the data and cite the reasons for profit increase or decrease in its annual results.

NATPET’s external auditor was directed to cooperate with Alujain’s auditor to publish the financial results on time.

In a previous disclosure by Alujain, the Saudi-listed company expected its external auditor to finalize the audit procedures on April 13 - almost after three weeks, Zagzoog said, adding that Alujain had enough time to consolidate its financial statements with those of NATPET.

In addition, the delay in disclosing the financials will lead Tadawul to suspend trading on the stock, which in turn harms shareholders’ interests.

“I would like to reassure NATPET and Alujain shareholders about NATPET’s financial results. The plant operations were resumed following the 2018 fire. The company also boosted the polypropylene unit’s production capacity by nearly 60,000 tons to 460,000 tons. NATPET will benefit from the additional capacity going forward,” Zagzoog noted.

“Meanwhile, the losses incurred by the company by the end of 2019 tuned into profit, as NATPET agreed with insurance firms on the compensation funds,” he added.

Answering a question about the coronavirus impact on NATPET operations, Zagzoog said, “it will be difficult to deliver our products to clients in Europe and China, if the crisis lasts over five months. We’re studying all scenarios.”

“Production and delivery are ongoing. We recorded strong results in Q1 2020, therefore satisfactory profitability is expected,” Zagzoog added.

Moreover, Zagzoog explained that the latest incidents in Alujain’s general meeting prove the end of the former board of directors’ term and the election of a new board, though the former board members insisted on not announcing these results.

The matter will be settled by competent authorities soon, in line with shareholders’ will.

“NATPET will only be affected by determining who will have the right to nominate members for its next board of directors term. Otherwise, no impact is expected on the company. My only concern is that NAPTET board will be led by an unexperienced person, but the decision is for shareholders,” Zagzoog added.

On March 26, Alujain said it was unable to publish its annual financial results for the fiscal year 2019 on time, as NATPET did not submit its financial statements on time.