Filling & Packaging Material Manufacturing Company (FIPCO) turned to profitability to achieve profits of 4.2 million riyals in the first quarter of 2020, compared to losses of 2.2 million riyals during the same Quarter of last year.
According to ArabiaNet, the company said in a statement that the shift to profitability is mainly due to sales growth of 31.6% as a result of increased demand for the company's products during the period in addition to the increase in sales of the subsidiary company (FPC for Industry) and a decrease in general and administrative expenses, where it was taking place The expenses of the subsidiary are charged to the general and administrative expenses during the first quarter of the fiscal year 2019 in line with the International Financial Reporting Standards (IFRS), as the commercial operation of FPC Industrial started in the second quarter of 2019.
She also attributed her shift to profits to a decrease in zakat expense as a result of the company’s acquisition of minority stakes in the subsidiary company announced on the Saudi Stock Exchange website (Tadawul) on March 2, 2020, as well as reflecting the provision for credit losses due to its lack of purpose, in order to collect mainly due amounts and settle relationships Credit with some clients.
She stated that these results came despite the increase in selling and marketing expenses during the first quarter of 2020 in order to classify them within the general and administrative expenses during the first quarter of the fiscal year 2019 due to the lack of commercial operation of the subsidiary at that time, and the high financing costs due to the interruption of capitalization of loan interest to the subsidiary As a result of the launch of the commercial operation, which was capitalized during the first quarter of the fiscal year 2019, and the decrease in other revenues as a result of the recovery of the amount of the financial compensation for employment during the first quarter of the fiscal year 2019.
