Riyadh, Saudi Arabia-based aquaculture company Saudi Fisheries Company (SFC) posted a 9.2 percent year-over-year increase in sales revenue for the nine months ending 30 September 2023, but accumulated losses have continued to pile up for the company, leading it to develop a plan to reverse its fortunes.
The company’s financial results covering the nine-month period show its revenue rose to SAR 42.7 million (USD 11.4 million, EUR 10.6 million) thanks to the performance of its wholesale business, representing a slight increase from the SAR 39.1 million (USD 10.4 million, EUR 9.67 million) it reported in the same period in 2022.
SFC’s wholesale segment, which includes the distribution of shrimp and fish products, achieved revenues of SAR 25.4 million (USD 6.8 million, EUR 6.3 million), marking a 988 percent increase compared to the SAR 2.6 million (USD 684,000, EUR 635,000) the segment posted for the same period in 2022.
Though the company’s wholesale segment saw revenue gains, SFC’s retail and farming segments posted large declines in revenue for the first nine months of 2023 at SAR 10.1 million (USD 2.7 million, EUR 2.5 million) and SAR 7.2 million (USD 1.9 million, EUR 1.8 million), respectively. During the same period in 2022, these segments achieved revenues of SAR 18.3 million (USD 4.9 million, EUR 4.5 million) and SAR 18.2 million (USD 4.9 million, EUR 4.5 million), respectively.
Increases in costs over Q3 2023, coupled with the lower revenue, led to an operating loss of SAR 33.8 million (USD 9 million, EUR 8.2 million), compared to a loss of SAR 25.8 million (USD 6.8 million, EUR 6.3 million) in the same period of 2022. Overall, the company’s operating loss for the nine months ending 30 September reached SAR 31.2 million (USD 8.3 million, EUR 7.6 million), a minor improvement from the SAR 31.9 million (USD 8.5 million, EUR 7.8 million) it posted in 2022. Its net loss in the period reached SAR 39.3 million (USD 10.5 million, EUR 9.6 million), up from SAR 33.7 million (USD 8.9 million, EUR 8.2 million).
Overall, the posted accumulated losses of SAR 211 million (USD 56 million, EUR 51.5 million). SFC partly attributed the losses to an increase in the cost of sales “due to decreased production in the farm, and since most of the costs are fixed, their ratio to sales has increased.” However, the company also said they are an indicator of “uncertainty regarding the company’s ability to manage liquidity.”
The company said it is planning to implement a clear strategy to address the losses and boost financial performance, such as taking measures to reduce general and administrative expenses, bringing down operating costs in aquaculture, expanding sales channels, closing low-performing stores, developing new sales techniques, and focusing more on products with high profitability. The company plans to release more specific measures to reverse the losses at a meeting of its board of directors on 8 January 2024.
SFC said it is optimistic the strategic business steps it has already taken will boost efforts to improve its operational efficiency and ensure the aquaculture company’s sustainability. SFC recently partnered with the National Aquaculture Group (NAQUA) – Saudi Arabia’s largest aquaculture operation – to create new market opportunities. The Saudi Agricultural and Livestock Investment Company (SALIC) has a 42 percent stake in NAQUA and a nearly 40 percent stake in SFC, helping to bridge the gap between the two aquaculture companies.
Additionally, SFC said it has concluded deals to import and supply diverse seafood products that “will help reduce reliance on a single supplier or market, hence making the company’s supply chain more resilient and less vulnerable to disruptions.” It also said it has sought to upgrade and modernize its chain stores, “which will help attract more customers and offer a better shopping experience ultimately leading to increased revenues."
Photo courtesy of Saudi Fisheries Company/Facebook
