Islamic Finance

Saudi paperboard maker increases Islamic financing with Samba Bank to 100 mln riyals

Saudi Arabia-based Middle East Paper Co has renewed and increased the sum of its Islamic financing from Samba Bank.

The financing has increased by 50 million riyals to 100 million riyals ($26.7 million), MEPCO said in an exchange filing on Monday.

The revolving facility is secured on a promissory note equivalent to the value of the financing.

MEPCO said the financing will go towards the company’s working capital and to meet “other business requirements”.

The company is a producer of containerboard and paperboard that are used for a wide variety of products including processed foods, frozen foods, fresh foods, consumer durables, beverages, and industrial goods. Some of MEPCO’s production uses FSC recycled certified paper.

The Jeddah-based company has a production capacity of half a million metric tons, it says on its website.

MEPCO reported a net loss of 4 million riyals in profit after tax and zakat for the three months ending June 30. It earned 176.1 million riyals in sales for the quarter, down 19.4 per cent from the same period last year.

It attributed the loss to a decrease in selling prices even as sales volume rose, increase in selling and distribution expenses, impairment loss allowance on account receivables and fair value loss on derivative financial instruments.

MEPCO made 99.4 million riyals in net income in 2018.

($1 = 3.75 Saudi riyals)

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