RSH operating income up by 22% in Q2 2010

Red Sea Housing Services (RSH) (Tadawul: 4230), a world's leading provider of remote site housing solutions, has announced the company's financial results for the second quarter of 2010. The Saudi-based RSH has recorded a 22.89% rise in its operating income during Q2 this year, compared to the second quarter of 2009.

Commenting on the company's performance so far this year, Dr. Majid Al Kassabi, Chairman of RSH, hailed the great results achieved by the company in the second quarter of 2010, stating that RSH's operating income has increased to SR 23.26 million during the 2^nd quarter of 2010, compared to SR 18.93 million recorded in the same period in 2009. He said that the encouraging performance of RSH and its increasing reputation worldwide have helped the company to secure major contracts.

"We are pleased with the company's improvement in operating profits during the 2^nd quarter of this year. This reflects the scope of development the company has experienced and the improvement of operating income achieved during the past three months," said Dr. Al Kassabi.

The company has suffered during this period from a preliminary court ruling in Algeria to pay customs duties and penalties. As a result, RSH has booked a provision of SR 10.2 million which was charged to the interim consolidated income statement for the past three months ending on 30 June, 2010, generating lower net profits. This has resulted in a 22.01% decrease instead of a 37.71% increase in net profits for the second quarter, compared to the same period in 2009.

Dr. Al Kassabi stressed the importance of RSH's contribution to the comprehensive economic development in the Kingdom of Saudi Arabia in terms of supporting major Saudi organizations with its outstanding housing solutions. He added "Our quality products provided to these companies are coupled with the government's spending on developing the energy sector, the infrastructure and the national development, as we are planning to further expand in our core markets in Africa, Asia and the Middle East. This enhances the expectations of RSH in the continuation of stability in 2010 and more development in 2011."

Al Kassabi underscored the company's commitment to develop its businesses on a global level. "Some thought that the downturn of the economic environment globally and halt of some major projects had largely affected RSH businesses, but on the contrary, the year 2009 was the second most successful year for RSH which reflects the outstanding management skills of our staff and the quality of our products which were well-positioned in the market," he said.

He added that the 2^nd quarter results of the company have been solid as it succeeded in securing new big orders with a total value of SR 590 million, representing the company's highest total volume of orders in the company's history.

As reported earlier, RSH recorded another achievement when it was awarded its biggest single contact to date. The SR 480 million ($127.9 million) contract secured from Chiyoda-JGC Joint Venture (CJJV) to engineer, manufacture and construct a major housing facility for Papua New Guinea's Liquefied Natural Gas project (PNG LNG) at Port Moresby on the bay of Papua. The facility is planned to be completed by 2011 and is operated by Esso Highlands Limited, a subsidiary of Exxon Mobile Corporation, on behalf of the co-ventures which include Oil Search, Santos, Nippon Oil, Mineral Resource Development Company (MRDC) and Eda Oil.