Nama Chemicals Co. announces its Interim Financial results for the Period Ending on 2025-09-30 ( Nine Months )

• Revenue decreased by 54% mainly due to a reduction in sales quantity by 33%

• Cost of sales decreased due to decrease in production

• Decrease in the selling & distribution expense due to the decrease in quantities sold

• Decrease in general and admin expenses due to decrease in SAP support and license fees

• Decrease in finance charges due to settlement of bank Loan.

• Decrease in other incomes in Q3 2025 is due to change in disclosure of SIDF grant amortization as compared to Q3 2024

Record of Reversal of impairment on the Plant, Machinery and Equipment in the previous quarter.

• Revenue increased by (61%) mainly due to increase in sales quantity by 43%.

• Cost of sales increased due to increase sales quantity of major products

• Increase in the selling & distribution expenses due to the increase in quantities sold

• Decrease in general and admin expenses due to decrease in SAP support and license fees

• Increase slightly finance charges

• Decrease in zakat expense mainly due to finalization zakat assessment

• Increase slightly in other income compared to the previous quarter.

Reversal of impairment on the Plant, Machinery and Equipment.

• Revenue decreased by 51% mainly due to a reduction in sales quantity by 33%

• Cost of sales decreased mainly due to reduction in sales quantity.

• Decrease in the selling & distribution expense due to the decrease in quantities sold

• Decrease in general and admin expenses due to SAP support & license fee.

• Decrease in finance charges due to settlement of loans

• Decrease in zakat expense mainly due to finalization zakat assessment

• Decrease in other incomes in current year 2025 is due to change in disclosure of SIDF grant amortization as compared to last corresponding period 2024

As disclosed in note 5 to the interim condensed consolidated financial statements, during the second quarter of the year 2025, the Group has reversed previously recognized impairment loss on property, plant and equipment amounting to SR 208 million in the interim condensed consolidated statement of profit and loss which resulted in the increase in net profit for the nine-month period ended September 30, 2025 by SR 208 million, an increase in the net book value of property, plant and equipment and retained earnings as of September 30, 2025 by SR 208 million. The reversal was based on the management’s assessment of recoverable amounts of property, plant and equipment based on the estimation of the fair value less cost of disposal (FVLCD) of the property, plant and equipment as determined by the management’s expert under the Depreciated Replacement Cost method.

As per our assessment, the methodology, the basis and the assumptions used by the management for impairment assessment and in determining the recoverable amount of property, plant and equipment resulting in the reversal of impairment loss do not provide an appropriate basis for the stated reversal and appropriateness of impairment loss provision as of the reporting date. Moreover, the current financial performance of the Group does not support improvements in the recoverable value of property, plant and equipment to support the reversal of the impairment loss of SR 208 million and adequacy of impairment loss provision as of 30 September 2025.

Consequently, we are unable to determine whether the impairment loss reversal of SR 208 million is appropriate and whether any necessary adjustments are required in the net book value of property, plant and equipment and retained earnings as of September 30, 2025 and the reported results for the period then ended.

Our audit opinion on the consolidated financial statements of the Group for the year ended December 31, 2024 was also qualified in respect of the adequacy of impairment loss provision.

Qualified Conclusion

Based on our review, with the exception of the matter described in Basis of Qualified Conclusion, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements for the three-month and nine-month periods ended September 30, 2025 have not been prepared, in all material respects, in accordance with IAS 34 as endorsed in the Kingdom of Saudia Arabia.

Material Uncertainty Relating to Going Concern

We draw attention to Note 2.4 of the interim condensed consolidated financial statements, which indicate that the Group has incurred gross losses of SR 44 million and SR 108 million for the three-month and nine-month periods ended on September 30, 2025, respectively. Also, the Group has incurred an operating loss of SR 58 million and SR 151 million for the three-month and nine-month periods ended on September 30, 2025, respectively. Further, its negative cash flows from operating activities were SR 6 million for the nine-month period ended on September 30, 2025. The Group’s current liabilities exceeded its current assets by SR 671 million as of September 30, 2025. Additionally, the Group is in breach of SIDF loans’ financial covenants and has defaulted in repaying loan instalments as of September 30, 2025, and December 31, 2024. These conditions, along with other matters as set forth in Note 2.4 indicate the existence of material uncertainty which may cast significant doubt about the Group’s ability to continue as a going concern. Our conclusion is not modified in respect of this matter.

The accumulated Profit as of September 2025 amounted to 42.6 million Saudi riyals, which represents 18% of the capital compared to Retained Earning of SAR 5.8 million representing 2.5% of the Capital as of December 31, 2024.