Tihama’s consolidated net income drops 94%

The consolidated net income of Tihama Advertising, Public Relation and Marketing Company amounted to SR 1 million, a decrease of 94 percent compared to SR 17 million last year, according to Tadawul website.
Announcing its consolidated financial results for the year ended on March 31, 2013, the company stated that its earning per share (EPS) is SR 0.06 compared to SR 1.14 last year.
Its gross profit amounted to SR 27 million, a decrease of 46 percent compared to SR 50 million last year.
Loss from operations amounted to SR 0.3 million compared to last year’s operating income of SR 10 million.
Decrease in net profit compared to last year is due to charging SR 10.5 million as the cost of the new contract with Riyadh municipality for renting 120 locations for outdoor advertising. However, the company did not complete manufacturing and foundation of the advertising poles and accordingly there was no revenue recognized against the rent expense.
There was also a decrease in subsidiary Ad Art Median’s revenue of SR 5 million, in addition to charging SR 3 million for the year against the advisory and consultancy fees for Bookstores company.
The company managed to decrease its operating losses by increasing the company’s share from its associated companies by SR 6 million.
During last year, the company realized other incomes representing profits from disposal of securities portfolio, property and equipment of SR 5 million and SR 6.5 million respectively.
The auditor’s report draws the attention to the note (21 - J) to the consolidated financial statement where the company filed a lawsuit against King Fahd Causeway Authority requesting the cancellation of the contract signed with the authority in connection with lease and advertising services along the causeway effective March 16, 2011. This was as a result of breach of certain terms of the contract by the authority causing a physical damage to the company.
The company’s management did not charge the rent expense for the year ended March 31, 2013 to the consolidated statement of income amounting to SR 3.9 million based on the company’s legal adviser’s opinion.
The comparative figure was reclassified in order to match the classification of this year.