The Saudi Fisheries Company, a leading aquaculture and fishing company in the Kingdom, announced a significant financial development: its accumulated losses have reached 26.70% of its capital. According to the company's official disclosure on the Saudi Stock Exchange (Tadawul) website, these losses, amounting to SAR 17.87 million, were calculated based on the annual financial statements ending December 31, 2023, out of the company's total capital of SAR 66.98 million.
The company attributed these losses to a combination of operational and financial factors. In its statement, it explained that the high costs associated with fixed and underutilized farms placed a significant burden on financial performance. Additionally, the company allocated SAR 8.77 million in provisions during the year, including SAR 7.57 million for impairment of non-financial assets and SAR 1.67 million for inventory. Furthermore, increased consultancy expenses related to the capital restructuring initiative, coupled with a decline in wholesale activities and the closure of several of its retail outlets, exacerbated the losses.
Historical context and company importance
The Saudi Fisheries Company was established by royal decree in 1980 and is one of the oldest companies specializing in this field in the Kingdom. For decades, it has played a pivotal role in meeting local demand for seafood products and developing the fisheries sector. As a publicly traded company listed on Tadawul, its financial performance is subject to continuous monitoring by investors and regulators, reflecting the health and challenges of this vital sector.
Expected impacts within Vision 2030
This announcement comes at a time when Saudi Arabia is prioritizing food security and diversifying its economic revenue streams as part of its Vision 2030 goals. The aquaculture sector is a key pillar of this strategy, as the government seeks to increase domestic fish production and reduce reliance on imports. Therefore, the financial challenges facing a company the size of Saudi Fisheries could affect investor confidence in the sector, but they also highlight the need to adopt more efficient and sustainable business models. According to the regulations and procedures of the Saudi financial market, companies whose accumulated losses exceed 20% of their capital are required to announce clear plans to rectify their situation, which the company has already begun to do through its restructuring initiative.
