United Wire Factories Co. (Aslak) posted an over threefold rise of 17% in Q3 2020 profit margins, compared to an increase of 5% a year earlier, as the margin between raw materials costs and selling prices was “highly attractive”, CEO Nabil Alamir said.
“The third-quarter results reflect the company’s operations and benefit from market recovery to realize better selling margins,” Alamir said in a statement to Argaam.
Product selling prices increased, though at a slower pace when compared to the first half of the year, which saw strong purchases ahead of the increase in value-added tax (VAT) to 15%.
“Aslak has timely met market demand for building and construction materials, and offered its products at affordable prices. The company has also managed the supply of raw materials and focused largely on high-profit sales, in addition to maintaining its customer base and opening new channels,” Alamir added, noting that these factors together contributed to the solid results recorded in Q3 2020.
Meanwhile, raw iron prices have recently seen a significant rise in global markets, which reflected on Aslak’s final product prices.
Elsewhere, Alamir expected the building and construction sector to see a slowdown in the next two months, to absorb the impact of the latest government decisions on the real estate industry (the property deal tax), ahead of a better movement by the end of 2020.
Aslak reported a net profit of SAR 17.8 million in Q3 2020, compared to a net profit of SAR 1.1 million a year earlier, Argaam reported.
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