Saudi Cable financial woes laid bare in delayed results

Reuters/Faisal Al Nasser

• $156m net loss for 2022
• Company’s future in doubt
• Scramble for rescue plan

Saudi Cable Company has revealed the crisis it is facing after the manufacturer belatedly published its financial results for 2022.

The company, which owns manufacturing facilities in Saudi Arabia, Bahrain and Turkey, posted a net loss of SAR585 million ($156 million) for the year, a 200 percent increase compared with 2021.

Saudi Cable said in a filing on the Saudi Stock Exchange that its accumulated losses of SAR543 million as of the end of last year represented more than 800 percent of the company’s share capital, rocketing from 71 percent a year earlier.

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Liabilities exceeded its assets by SAR974.5 million as at December 31, 2022 and official auditors said they “cast a significant doubt” about the company’s ability to continue as a going concern and to meet its obligations.

The company has called a virtual meeting with shareholders on Thursday where they can question CEO Nael Fayez about the 2022 results.

Management at Saudi Cable are scrambling to put together a financial restructuring proposal. Originally due to be presented to the courts on Monday, the company last month requested a six-month extension to the deadline.

In a ruling in June, the deadline was set by the Fifth Appeal Chamber of the Commercial Court in Riyadh.

In its latest filing to the Saudi Tadawul, Saudi Cable said it was facing a “liquidity issue” as a result of judicial enforcement orders filed against it by creditors and lenders.

It added that the company was unable to use its bank accounts and was unable to execute orders.

Management has prepared a five-year plan which forecasts net profit from 2025.

This includes assumptions in respect of a cash injection via a rights issue, revenue growth based on pipeline orders, and creditors voting in January to convert part of debt to equity as part of the financial restructuring procedure. 

“These elements are future events and hence contain material uncertainty as to the outcome,” the auditor noted.

The auditor also revealed that the company has recorded a contingent liability amounting to SAR52.5 million in relation to a court ruling in Turkey where it operates a subsidiary company.

Last week, Saudi Cable announced the signing of a working capital financing agreement with Rawafid Al-Mustaqbal Investment Company amounting to SAR140 million.

The company said the agreement includes cash financing and the purchase of raw materials to fulfill existing manufacturing orders. 

Saudi Cable Company, which was established in 1976 and was converted into a joint stock company in 1988 with a paid up capital of SAR270 million, has yet to publish results for 2023.