RIYADH: Filing and Packing Materials Manufacturing Co. (FIPCO) has released its annual consolidated financial statements for the fiscal year ended December 31, 2023. The company reported a decrease in sales/revenue by 8.71% from the previous year, down to SAR 238 million from SAR 260.7 million.

Despite the downturn in sales, FIPCO achieved a 22.45% increase in net profit, amounting to SAR 12 million compared to SAR 9.8 million in 2022.

The financial highlights of the year include:

• A 13.27% increase in gross profit, totaling SAR 47.8 million.
• Operational profit soared by 65.74%, reaching SAR 17.9 million.
• Total shareholders’ equity rose by 8.86% to SAR 143.7 million.
• Earnings per share increased from SAR 0.85 to SAR 1.04.

The decline in turnover was attributed to reduced sales volumes of key products and a drop in selling prices due to lower costs of essential raw materials. However, this was offset by an increase in sales of other products, leading to a favorable product mix variance.

Key factors contributing to the net profit were:

1. Improved gross profit margins and product mix variance.
2. Reduced selling and marketing expenses, thanks to lower shipping costs.
3. A decrease in expected credit losses provision as per IFRS 9, reflecting better collection efforts and enhanced credit control.
4. Additional income from Saudization support by the HRDF, VAT refunds, and profits from Murabaha deposits.
5. A reduction in zakat provision.

These gains were achieved despite increased general and administrative expenses due to restructuring and recruitment costs, re-evaluation of contingent liabilities, and lower investment gains.

The slight decrease in total comprehensive income, from SAR 11.9 million to SAR 11.7 million, was primarily due to the remeasurement of end-of-service benefits following the termination of some employees’ contracts in 2022 and job restructuring in 2023.

FIPCO’s financial performance indicates resilience in the face of market challenges and a strategic approach to cost management and revenue diversification.

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