Saudi Fisheries Company's (SFC) financial issues continue to intensify, as the aquaculture firm’s accumulated losses by the end of the first quarter of 2024 spiked to SAR 265 million (USD 70.6 million, EUR 65.5 million) – equivalent to 66 percent of the company’s capital – according to the company’s recently published interim results.
Additionally, SFC’s debts by 31 March 2024 exceeded the company’s assets by SAR 50 million (USD 13.3 million, EUR 12.4 million).
“These events and conditions indicate the existence of a material uncertainty that may cast significant doubt on the company’s ability to continue,” the Capital Market Authority and Saudi Exchange said.
In its Q1 2024 results, the company announced a 21 percent year-over-year decline in sales revenue to SAR 9.1 million (USD 2.4 million, EUR 2.3 million), compared to the SAR 11.6 million (USD 3 million, EUR 2.9 million) recorded in Q1 2023. SFC attributed the drop in performance to “a decline in retail segment revenue caused by the closure of several stores,” as well as higher production costs at its fish farm during the quarter, as the Saudi government removed subsidies on feed, which skyrocketed fish feed prices.
The company’s Q1 2024 operational loss totaled SAR 7.6 million (USD 2 million, EUR 1.9 million), marking a stark turnaround from the SAR 1.25 million (USD 334,000, EUR 309,000) operational profit posted in the same quarter in 2023.
SFC also did not publish its first-quarter results within the legal period required in the country, with the company attributing the delay to “non-completion of the audit review.”
Due to the poor performance, at the beginning of the second quarter of 2024, the company replaced CEO Awad Farouk Al-Desouki with SFC’s then-CFO Mahmoud Abdul-Hay Abu Aqeel, who will serve as acting CEO until the company carries out a full recruitment process.
As part of a strategy to contain its escalating financial challenges, SFC announced in January 2024 that it would attempt to offset accumulated losses by reducing its capital from SAR 400 million (USD 106.6 million, EUR 98.9 million) to SAR 188.44 million (USD 50.2 million, EUR 46.6 million).
Elsewhere, the company said on 12 June 2024 it has secured a SAR 19 million (USD 5 million EUR 4.7 million) loan from financial company Riyad Bank, which the company plans to deploy in meeting its general expenses.
