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Arabian Pipes Company said it produced a net profit in the third quarter as the company starts to generate revenue from its new production and sales network in Jubail.
The Riyadh supplier of medium range high frequency welded steel pipes said it made SAR 604,000 ($161,053) after tax to sharply improve on the SAR 4.8m ($1.28m) loss incurred in the same period the previous year. This is, however, down from the SAR 1.3m ($346,600) posted in the second quarter.
Gross profit for the third quarter period amounted to SAR 16.4m ($4.37m) compared to SAR 2.6m ($693,000) last year, and operating profit reached SAR 10.3m ($2.75m), up from SAR 1.6m
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APC's first manufacturing facility is located in Riyadh's Second Industrial City, on an area of 22.8ha, according to its website, producing an annual capacity of 160,000 tonnes of pipes. The company supplies to the construction sector, as well as oil and gas projects and industrial facilities.
In the last year the company has developed a facility in Jubail, one of Saudi Arabia’s main industrial hubs, incurring high fixed costs that saw net profit for the first nine months of 2011 fall 79% to SAR 968,000.
The company stated that, it will start “produc[ing] the in-hands orders from Riyadh and Jubail factor[ies] from fourth quarter of 2011.”
Rivals such as Saudi Steel Pipe Company – also listed on Saudi’sTadawul stock exchange – have also undertaken expansion plans to capitalise on the high levels of construction in the Kingdom. The company is building another factory for its hot induction bending system that allows the production of curved pipes that do not need welded joints. The majority of its sales are in oil and gas.
APC shares fell 1.8% to SAR 25.8 yesterday.
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