Aldrees’ H1 hit by lower earnings from transport ops: CEO
Aldrees Petroleum and Transport Services Co.’s profit from its transport division – which represents 40 percent of earnings – dropped 90 percent year-on-year (YoY), weighing on H1 2017 results, chief executive officer Abdullah Aldrees told Argaam.
The fuel retailer reported a 42 percent YoY drop in net profit to SAR 32.8 million in H1 2017.
Earnings from transport operations have been declining since Q3 2016, impacted by lower revenue from cement and grains companies, Aldrees said.
Last October, Aldrees signed a four-year contract worth SAR 597 million with Maaden Waad Al Shamal for Phosphate Co. to transport molten sulphur and phosphoric acid via trucks from Waad Al Shamal.
The agreement slightly boosted the company’s revenue in Q2 2017, Aldrees said.
"The full financial impact will appear during the second half of this year and next year,” he added.
Looking ahead, the company will face the challenge of higher energy prices by focusing on logistics operations and expanding in the field of liquid chemicals transport, the chief executive said.
This is expected to reflect positively on financials in H2 2017 and 2018, and help cut costs.