Equipment House H1 2023 net profit slumps 74% to SAR 8.8 mln; Q2 at SAR 1.9 mln

Scientific and Medical Equipment House Co.’s (Equipment House) net profit fell 74% to SAR 8.8 million in H1 2023, compared to SAR 34.1 million in the year-ago period.

The company cited an overall rise in direct operating costs including labor, spare parts and subcontractors. In addition, it reported increases in salaries and wages of medical employees, along with additional costs incurred on discounts related to previous billings. 

The profit drop came despite a 5% year-on-year (YoY) growth in revenue during H1 2023, as the corresponding period in 2022 recognized revenues for completed projects, leading to higher profit. 

Higher profit margins were recognized in the previous period upon terminating and handing over some projects during 2022. On the other hand, new projects commenced in 2023 but, in early stages, they incur substantial mobilization and start-up costs. 

In Q2 2023, the company’s net profit dropped 89% YoY to SAR 1.9 million, due to higher salaries and wages, additional costs incurred on discounts related to previous billings, increase in project costs, and higher provision of expected credit loss and finance costs.

Sequentially, the company’s net profit fell by 71.7% from SAR 6.86 million in Q1 2023 on higher direct operating costs, provisions for expected credit losses and finance costs. 

Total shareholders’ equity, after minority interest, decreased to SAR 479 million by the end of the six-month period, from SAR 488 million a year earlier.

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