Molan Steel Co., based in Saudi Arabia, reported a 48% increase in its net loss for 2024, reaching SAR 7.1 million (approximately USD 1.89 million). This decline in the company’s financial performance is believed to stem from the SAR 2.34 million (approximately USD 623,000) allocated for inventory, receivables, and advance payments related to the acquisition of Mayar International Industry. Additionally, the ongoing decline in steel prices negatively impacted sales and profit margins, contributing to increased financing costs.
Molan Steel Co. had announced on December 26, 2024, that it signed an agreement to acquire 100% of Mayar International Industry, a subsidiary of the Norwegian chemical company Yara International Ltd, for SAR 34.88 million (approximately USD 9.29 million). The agreement outlined that payments would be made in seven monthly installments, and Molan Steel would also take on the debt owed to the Saudi Industrial Development Fund (SIDF).
In the second half of 2024, covering the July-December period, the company’s financial losses accelerated, with the net loss rising to SAR 4.58 million (approximately USD 1.22 million). In contrast, the same period in 2023 showed a net loss of SAR 1.63 million (approximately USD 435,000), marking a 181.3% increase in the loss for the same period in 2024. During the same period, operating income also significantly declined, recording a loss of SAR 3.67 million (approximately USD 981,000). Although total revenues showed a slight increase of 1.7%, factors affecting profitability overshadowed this growth.
The company’s financial balance was also affected, with total equity, excluding minority interest, decreasing from SAR 30.08 million (approximately USD 8.02 million) at the end of 2023 to SAR 23 million (approximately USD 6.13 million) at the end of 2024. The increased financing burden and fluctuations in market conditions may require the company to reassess its future strategies.
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