**Headline:** “Shipping Rates Sink Oil Revenue”

**Intro:**
A sharp decline in global shipping rates dragged quarterly oil transport revenue down by SAR 737 million year-on-year, slashing net profit. While Chemicals and Logistics sectors offset losses sequentially, rising finance costs and sector volatility shaped mixed annual results.

**Factbox (50 words):**
– **Oil Transport Revenue Drop:** SAR 737M (YoY) due to lower shipping rates.
– **Net Profit Pressures:** SAR 168M gross profit decline, SAR 30M higher finance costs (YoY).
– **Sequential Gains:** Logistics (+SAR 72M), Chemicals (+SAR 98M) boosted revenue.
– **Equity Investments:** Contributed SAR 41M (YoY), SAR 58M (QoQ) to profits.

**Financial Performance Analysis: Key Drivers and Sector Trends**

Here’s a detailed breakdown of the company’s financial performance across key periods, highlighting sector-specific dynamics and external factors influencing results:

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### **Year-over-Year Quarterly Results (Current Quarter vs. Same Quarter Last Year)**
**Revenue Decline**
– **Oil Transportation Sector**: Revenue fell by **SAR 737 million**, driven by a sharp decline in global shipping rates.
– **Net Profit Reduction**:
– Gross profit decreased by **SAR 168 million**, directly tied to lower shipping rates.
– Higher finance costs (up **SAR 30 million**) due to rising interest rates further pressured profits.
– **Partial Offset**: Equity-accounted investee companies contributed **SAR 41 million**, cushioning the profit decline.

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### **Quarter-over-Quarter Results (Current Quarter vs. Previous Quarter)**
**Revenue Trends**
– **Oil Transportation**: Revenue dropped by **SAR 172 million** due to weaker global shipping rates.
– **Offsetting Growth**:
– **Chemicals Transportation**: Revenue rose by **SAR 98 million** from higher operational activity and shipping rates.
– **Logistics Sector**: Increased by **SAR 72 million**, reflecting improved demand.

**Net Profit Improvement**
– **Gross Profit Surge**: Jumped by **SAR 156 million** due to stronger performance across Oil, Logistics, and Chemicals sectors.
– **Additional Gains**:
– Equity-accounted investees contributed **SAR 58 million**.
– **SAR 33 million** in other income (e.g., vessel sales).
– Lower finance costs (down **SAR 21 million**).
– **Challenge**: Higher general/admin expenses (up **SAR 39 million**) tempered profit growth.

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### **Annual Performance (Current Period vs. Same Period Last Year)**
**Revenue Growth**
– **Chemicals Transportation**: Revenue surged by **SAR 665 million** due to increased shipping rates and activity.
– **Oil Transportation**: Declined by **SAR 323 million**, offsetting some annual gains.

**Net Profit Drivers**
– **Gross Profit Expansion**: Rose by **SAR 602 million**, led by:
– **Oil Transportation**: **SAR 354 million** increase.
– **Chemicals Transportation**: **SAR 349 million** improvement.
– **Other Contributions**:
– **SAR 223 million** from vessel sales and other income.
– Equity-accounted investees added **SAR 207 million**.
– **Headwinds**: Finance costs rose sharply by **SAR 324 million** due to higher interest rates.

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### **Key Takeaways**
1. **Global Shipping Rates**: A critical factor, driving volatility in Oil Transportation revenue but supporting growth in Chemicals and Logistics.
2. **Operational Efficiency**: Improved gross margins across sectors highlight better cost management and activity levels.
3. **Strategic Gains**: Asset sales (e.g., vessels) and equity investments provided vital offsets to sector-specific challenges.
4. **Interest Rate Impact**: Rising finance costs remain a persistent risk, particularly in annual comparisons.

This analysis underscores the company’s ability to leverage diversified operations and strategic actions to navigate a complex global market.

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*Note: Figures are in SAR millions. YoY = Year-over-Year; QoQ = Quarter-over-Quarter.*

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**15 FAQs on Quarterly Financial Performance**

1. **Why did the Oil transportation sector’s revenue decline by SAR 737 million year-over-year (YoY) this quarter?**
The drop was primarily due to reduced global shipping rates compared to the same quarter last year, which directly impacted earnings from oil transportation.

2. **What caused the SAR 168 million reduction in gross profit this quarter versus last year?**
Lower global shipping rates reduced margins, particularly in the Oil transportation sector, leading to the decline in gross profit.

3. **How did finance costs affect net profit this quarter compared to the same quarter last year?**
Higher interest rates increased finance costs by SAR 30 million, further pressuring net profit despite partial offsets from equity investments.

4. **Why did revenue decline by SAR 172 million quarter-over-quarter (QoQ) in Oil transportation?**
Reduced global shipping rates during the current quarter led to this decline, though Chemicals and Logistics sectors partially offset losses.

5. **What drove the QoQ net profit increase despite lower Oil transportation revenue?**
Improved gross profit (SAR 156 million), higher equity investment returns (SAR 58 million), and lower finance costs (SAR 21 million) boosted profits.

6. **How did the Chemicals transportation sector perform this quarter compared to the previous quarter?**
Revenue rose by SAR 98 million QoQ due to higher operational activity and improved global shipping rates in the sector.

7. **Why did the Company’s share in equity-accounted investees rise by SAR 41 million YoY?**
Improved performance of joint ventures and affiliates contributed to this increase, partially offsetting weaker results in other areas.

8. **What caused the SAR 33 million rise in other income this quarter versus last quarter?**
A realized capital gain from vessel sales and other one-time items drove this increase, supporting net profit growth.

9. **How did year-over-year (YoY) revenue grow despite Oil transportation declines?**
The Chemicals transportation sector’s SAR 665 million revenue surge, driven by higher shipping rates and activity, offset Oil sector losses.

10. **What factors led to the SAR 602 million YoY gross profit increase for the current period?**
Stronger performance in Oil (+SAR 354 million) and Chemicals (+SAR 349 million) transportation sectors boosted gross profit through improved margins and volumes.

11. **Why did finance costs rise by SAR 324 million YoY for the current period?**
Higher global interest rates increased borrowing costs, significantly impacting the Company’s overall financial expenses.

12. **How did the Logistics sector contribute to QoQ revenue growth?**
Revenue increased by SAR 72 million due to higher shipping rates and expanded operational activities during the current quarter.

13. **What tempered the net profit increase this quarter compared to the prior quarter?**
A SAR 39 million rise in general and administrative expenses limited profit growth, despite gains from operations and asset sales.

14. **Why did the Company’s share in equity-accounted investees jump by SAR 207 million YoY for the current period?**
Strategic partnerships and investee companies’ stronger financial performance drove this significant year-over-year improvement.

15. **How did global shipping rates create mixed impacts across sectors this quarter?**
While Oil transportation suffered from rate declines, Chemicals and Logistics benefited from rate increases, highlighting sectoral volatility in shipping markets.

### **Conclusión**
El desempeño financiero de la compañía refleja un escenario mixto marcado por desafíos y oportunidades. La caída en las tarifas globales de transporte marítimo impactó significativamente al sector de **transporte de petróleo**, reduciendo ingresos y márgenes. Sin embargo, sectores como **transporte de químicos** y **logística** demostraron resiliencia, aprovechando mayores actividades operativas y alzas puntuales en tarifas. La mejora en la participación de empresas asociadas y ganancias por venta de activos destacan como impulsores clave para compensar presiones financieras externas, como el alza en tasas de interés. La gestión estratégica de costos y la diversificación de operaciones continúan siendo pilares para sostener la rentabilidad en un entorno volátil.

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### **Call to Action (CTA)**
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– **Contáctenos** para consultas específicas sobre estrategias operativas y oportunidades de inversión: [Correo/Contacto de Relaciones con Inversores].

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### **Agradecimiento**
Agradecemos la confianza continua de nuestros accionistas, socios y clientes. Su apoyo nos motiva a seguir innovando, optimizando operaciones y fortaleciendo nuestro liderazgo en sectores clave. Reiteramos nuestro compromiso con la transparencia y la creación de valor sostenible a largo plazo.

*— Equipo de Gestión*

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