Riyadh, Saudi Arabia-based Saudi Fisheries Company (SFC) has signed an agreement to obtain financing from two institutions totaling SAR 76 million (USD 20.2 million, EUR 19.9 million) to finance its operations.
The company, which engages in fishing, fish-farming, and marketing activities, announced a deal with Al Rajhi Bank for a loan of SAR 40 million (USD 10.7 million, EUR 10.5 million) to finance the seafood company’s operations.
SFC simultaneously signed an agreement with the National Bank of Bahrain for banking facility of SAR 36 million (USD 9.6 million, EUR 9.4 million) over a one-year period to support its operations.
Both agreements have been approved by the company's board of directors and will be presented to shareholders at the next general meeting for approval.
Injecting fresh financing into the operations of SFC, the company said, is critical –especially after the seafood firm announced an increase in its net loss for the three months ending 31 March 2022 compared to the previous quarter.
Total accumulated losses at the end of the quarter was estimated at SAR 144 million (USD 38.3 million, EUR 37.6 million) equivalent to 36 percent of the company’s capital as of 31 March 2022.
The company attributed the loss to higher production costs at its shrimp farm and a surge in the fixed costs and underutilization of assets. The company also said longer harvest cycles and variable costs were factors driving up overall production costs
The new financing agreements are also expected to boost the company’s sales, after SFC achieved a 41 percent increase in the first quarter compared to a similar period in 2021.
SFC, which is also involved in the operation of fish and shrimp farms, ice production, storage facilities, and the operation and management of seafood restaurants, in April this year announced the extension of its non-binding memorandum of understanding (MoU) with Arabian Agricultural Services Co. (ARASCO) for three months to October 2022.
The MoU, which was signed in October 2021, agreed to future cooperation between the companies on the manufacturing and commercial operation of an aquaculture feed factory being constructed by ARASCO in the Al-Huraydah, Aseer region, was initially to expire July 2022.
ARASCO had, in 2013, established an aquatic fodder factory in Aseer, with a production capacity of 20 metric tons per hour and annual capacity of 96,000 metric tons, to support its shrimp and fish projects in Saudi Arabia.
The two new financing agreements comes shortly after SFC announced the resignation of its former CEO Walid bin Hamad bin Sulaiman Al-Buthi “due to his special circumstances.” SFC CFO Awwad Aldasouqi was picked to serve as acting CEO with effective 1 July.
Photo courtesy of Saudi Fisheries Company
