The Middle East Paper Company (Mepco), a leading vertically-integrated paper manufacturer in the region, reported sales revenue increase of 21.5 per cent for the year ended December 31, 2017, compared to 2016, due to growth in both sales volume and average sales price.

Profitability levels improved significantly compared to 2016 IFRS-adjusted figures, said a statement.

Gross profit of SR186.1 million ($49.62 million) showed an increase of 41.8 per cent; operating profit reached SR 95.8 million ($25.54 million) representing a 182.8 per cent increase; and the EBITDA margin stood at a comfortable level of 24.2 per cent, it said.

Eng Sami Al Safran, CEO of Mepco, said: “In 2017, we made a number of important structural adjustments, from systems updates to overall compliance. We are already seeing the fruits of investment in revamping production lines as well as refinement of operating processes.”

“These efforts have led to overall improvements to efficiency and will support future sustainable growth. The strong financial results of 2017 are demonstrative of the efforts that we have made to bring the business to a new level in this globally competitive industry,” he said.

“Our commercial and CSR activities are fully aligned with Saudi Arabia’s Vision 2030 programme. We are proud to be a successful, award winning company, as evidenced by winning the King Khalid Award for responsible competitiveness in 2017 and CFI’s Best Corporate Governance Award in Saudi Arabia in early 2018,” he added.

Dr Mohamed Saleh Darweesh, chief financial officer, Mepco, said: “We are pleased to announce our financial results in its first full year of reporting in accordance with IFRS. Share of sales for niche products increased during 2017, to represent a greater share than in previous years.”

“The increase in profitability is attributed to the improvement in average sales volume and selling prices compared with 2016, which rose by 5.8 per cent and 11.7 per cent respectively,” he said.

“It should also be noted that 2016 EBITDA and net income figures were positively impacted by an SR92 million ($24.52 million) net gain on claims for expropriated land and premises, and this should be considered when comparing annual figures,” he added.

Darweesh continued: “We made significant headway in improving efficiencies, with cost of sales increasing by 16.3 per cent compared to an increase in sales revenue of 21.5 per cent year-on-year.”

“Selling, general and administrative expenses were SR91.3 million ($24.34 million), decreasing by 7.5 per cent from the previous year,” he said.

“Total debt has decreased to reach SR706.0 million ($188.24 million), delivering a comfortable debt to equity ratio of 0.98 per cent compared to 1.07 per cent in 2016. The board of directors’ recommendation of a dividend of SR0.75 per share leaves us in a financial position that has significant capacity to fuel future growth,” he added.

Percentage changes in this announcement are calculated per IFRS-adjusted results for full year 2016, it stated. – TradeArabia News Service