Bawan Co.’s share buyback will take place in 2021 after obtaining the approval from shareholders for the board recommendation, Mohammed Al-Balawi, the company’s chief financial officer (CFO), told Argaam in a telephone interview.
The company’s financial results for the current period came in line with the group strategy that aims to adapt to the current situation and focus on the market share, in addition to reducing costs and enhance operating efficiency, Al-Balawi said.
He also highlighted that the group has efficiently managed the COVID-19 risks and the related impacts on its operations amid the current conditions.
Meanwhile, Bawan’s higher profit in Q3 2020 was mainly driven by improved sales and profit margins. The group’s core segments that contributed to the quarterly profit growth are mainly wood, metal and concrete industries, the CFO explained, expecting these segments to maintain growth on more supply partnerships with the Ministry of Housing and other government projects.
Moreover, higher profit margin was spurred by better sales volumes, compared to the same period in 2019, particularly in wood, metal and concrete industries, he noted.
The fixed cost of production was recognized on higher volumes when compared to the previous year. Additionally, Bawan controlled costs and reduced some of the major input costs.
On the other hand, Al-Balawi attributed a decline of 17.6% year-on-year (YoY) in the plastics segment revenue to the fire, which erupted in one of factories last February. The blaze had a negative impact on the XPS sales in the segment, he pointed out, confirming that Bawan is seeking to resume XPS production in Q1 2021.
The factory has a sufficient insurance coverage of SAR 42.4 million, including SAR 28.4 million for property, plant and equipment, and SAR 14 million for business breakdowns. The CFO expects this claim to reflect on the group’s results for Q4 2020 or Q1 2021.
Elsewhere, Al-Balawi said that Bawan’s investments in Saudi Aramco were valued at SAR 900,000 in the first nine months of 2020, and stood at SAR 4.7 million in Q3 2020.
The company reported a net profit after Zakat and tax of SAR 60.2 million, a more than two-fold jump YoY, in 9M 2020, Argaam reported.
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