Red Sea International reports 44% growth in operating profits for H1 2025
The company's net profit improved by 168% compared to the first half of 2024, although Q2 2025 saw a decline.
Red Sea International Company has announced its consolidated financial results for the first six months of 2025.
The firm reported a net profit of SR1.87 million, representing a 168% improvement compared to the same period in 2024.
In contrast, net profit for Q2 2025 reached SR6.39 million, which marks a 31% decline compared to the second quarter of 2024.
Revenues for the first half of 2025 increased by 54% compared to H1 2024, reaching SR1,479 million.
Q2 2025 revenues stood at SR779 million, showing a modest 4% rise compared to the corresponding period in 2024.
This growth was primarily driven by enhanced performance and higher project completion rates.
Operating profit for the first six months of 2025 reached SR42.8 million, marking an increase of 44% compared to the same period in 2024.
The operating profit for Q2 2025 stood at SR23.72 million, down 10% from Q2 2024.
Despite these improvements in performance, overall profitability was lower due to accounting adjustments related to the Amortization of Purchase Price Allocation (PPA).
In 2024, the company executed a PPA for the acquisition of First Fix Company for Electrical Works Ltd., resulting in an accounting loss of SR121.75 million in 2024 and SR48.7 million in H1 2025.
These losses are merely accounting adjustments necessitated by the International Financial Reporting Standards (IFRS) and do not signify actual operational losses.
The company has provided clarification on this matter in the notes to its consolidated financial statements for the periods ending 31 March 2025 and 30 June 2025.
To mitigate the impact of the PPA provision, the company intends to follow the recommendation of its Board of Directors to augment capital by converting debts owed to minority shareholders (the sellers) in First Fix into shares.
Specifically, this involves the deferred portion of the acquisition price for First Fix.
The company has submitted an application to the Capital Market Authority requesting approval for this action, and a decision is anticipated soon.
The firm reported a net profit of SR1.87 million, representing a 168% improvement compared to the same period in 2024.
In contrast, net profit for Q2 2025 reached SR6.39 million, which marks a 31% decline compared to the second quarter of 2024.
Revenues for the first half of 2025 increased by 54% compared to H1 2024, reaching SR1,479 million.
Q2 2025 revenues stood at SR779 million, showing a modest 4% rise compared to the corresponding period in 2024.
This growth was primarily driven by enhanced performance and higher project completion rates.
Operating profit for the first six months of 2025 reached SR42.8 million, marking an increase of 44% compared to the same period in 2024.
The operating profit for Q2 2025 stood at SR23.72 million, down 10% from Q2 2024.
Despite these improvements in performance, overall profitability was lower due to accounting adjustments related to the Amortization of Purchase Price Allocation (PPA).
In 2024, the company executed a PPA for the acquisition of First Fix Company for Electrical Works Ltd., resulting in an accounting loss of SR121.75 million in 2024 and SR48.7 million in H1 2025.
These losses are merely accounting adjustments necessitated by the International Financial Reporting Standards (IFRS) and do not signify actual operational losses.
The company has provided clarification on this matter in the notes to its consolidated financial statements for the periods ending 31 March 2025 and 30 June 2025.
To mitigate the impact of the PPA provision, the company intends to follow the recommendation of its Board of Directors to augment capital by converting debts owed to minority shareholders (the sellers) in First Fix into shares.
Specifically, this involves the deferred portion of the acquisition price for First Fix.
The company has submitted an application to the Capital Market Authority requesting approval for this action, and a decision is anticipated soon.
