United Wire Factories Co.’s (Aslak) CEO Nabil Al-Amir
United Wire Factories Co.’s (Aslak) profit margins are still “at good levels,” as the company’s strategy focuses on higher-yielding products in the civil and construction sectors, CEO Nabil Al-Amir told Argaam.
The diversity of Aslak’s product portfolio and sales channels gives Aslak flexibility in managing operations to generate stronger returns based on market demand, said Al-Amir, indicating that the company’s strategy, approved in 2019, started to bear fruit.
Al-Amir said that Q2 2022 was a seasonally stagnant period due to the holy month of Ramadan and Eid Al Fitr, a period usually marked by slow-paced businesses and weaker demand.
However, Aslak reported better performance in the second quarter than in Q2 2021, due to recognizing written-back COVID-19 provisions, he added.
The second-quarter earnings were lower than the previous quarter due to the seasonality factor that the three-month period witnessed. Aslak’s performance in Q1 2022, which marked the start of the new fiscal year, was backed by stronger demand, business continuity and the ability to work outdoors, especially in the construction sector, he noted.
In addition, Q2 2022 witnessed lower demand for some products due to holidays, while prices of some materials steeply declined, with an impact on the resumption of activities in Q3 2022.
The third quarter’s performance was relatively lackluster due to the Hajj season, summer vacation and restrictions on construction and building activities during the hot weather, said Al-Amir, expecting performance to start improving by September.
Commenting on the extension of the memorandum of understanding (MoU) to acquire a stake in A-1 Fence Arabia, Al-Amir pointed out that the business is unprecedented in the Kingdom, adding that the company is seeking to add value to the industry and provide high-quality products with local content. He also noted that business is running smoothly with promising results.
Aslak reported a 40% year-on-year (YoY) profit increase to SAR 42.2 million in H1 2022, from SAR 30.2 million in the year-earlier period. Q2 2022 net earnings stood at SAR 16.2 million, Argaam earlier reported.
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