KSA: MEPCO Profits Skyrocket and Announces Non-distribution of Dividends

The profits of the Middle East Paper Manufacturing and Production Company (MEPCO) jumped by 229.2% during the 2020.

According to company data, net profit amounted to 20.18 million riyals after zakat and tax, compared to 6.13 million riyals 2019.

MEPCO attributed the profit growth to increase in sales revenues, lower cost of sales per ton, a decrease in selling and distribution expenses, a decrease in general and administrative expenses, a decrease in the fair value loss in derivative financial instruments, a decrease in the cost of financing, despite the decline in average selling prices, and decrease in other expenses.

The company’s revenues increased by 4.86% in 2020 to 724.69 million riyals, compared to 691.08 million riyals in 2019.

MEPCO’s profits increased 20.3% during the fourth quarter of 2020 to 4.23 million riyals after zakat and tax, compared to 3.52 million riyals in the same quarter of 2019.

Last year, the firm signed a deal to acquire a plot of land in King Abdullah Economic City (KAEC), where it plans to build a tissue jumbo roll factory.

The manufacturing facility is expected to have an installed capacity of 60,000 tons per year and will cost around 338 million riyals.

In a separate statement for the company, the Board of Directors recommended non-distribution of cash dividends to shareholders for the fiscal year 2020 in order to support the expansion projects of the company that it is currently underway.

MEPCO said that this recommendation will be presented for a vote at the next General Assembly meeting.