Equity and Liabilities
Our Financing Policy aims at ensuring sufficient liquidity levels at all times, while optimizing the returns to our shareholders. We use leverage prudently to fund our global growth ambitions. Our strong credit profile and corporate credit ratings (A+ / stable / A1) on a standalone basis reflects the strength of our financing strategy and its execution. We evaluate the most optimal capital and financing structure to support our strategic plans and growth ambition.
Our primary sources of liquidity are the cash flows generated from our operations and borrowings under committed bank facilities. The primary use of this liquidity is to fund our ongoing operations and our capital expenditure requirements, including investments in joint ventures and other minority owned investee companies as well as dividend distribution to our shareholders.
Equity attributable to equity holders of the parent for 2019 reached SAR 168,761 million, a decrease of SAR 4,322 million or 2%, compared to 2018. The decrease is mainly attributable to cash dividends amounted to SAR 13,200 million, and other comprehensive loss by SAR 1,921 million mainly as a result of the re-measurement on employee benefits and foreign currency translation movements. This was partially offset by the 2019 net income generated amounted to SAR 5,563 million, and the acquisition of an additional ownership interest in Saudi Methanol Company (“Ar-Razi”) by SAR 5,220 million. Considering this transaction is related to the acquisition of an additional ownership interest in a subsidiary without a change of control, accordingly, it has been accounted for as an equity transaction and excess consideration over the carrying amount of the non-controlling interests is recognised in equity attributable to the Parent.
Liabilities for 2019 reached SAR 99,114 million, an increase of SAR 840 million or 1%, compared to 2018. The increase was attributable to the increase in non-current liabilities by SAR 1,273 million partially offset by a decrease in current liabilities by SAR 433 million. Non-current liabilities increased due to an increase in employee benefits mainly resulted from the decrease in the discount rate in and outside the kingdom and the increase in lease liabilities by SAR 5,114 million due to the adoption of IFRS 16 “Leases”. This was partially offset by a decrease in long term debt due to repayments and reclassification of SAR 7,232 million.
The decrease in current liabilities resulted from the decrease in trade payables and other current liabilities mainly due to the lower feedstock prices, lower dividends payable and zakat payments. Short term debt and current portion of long term debt increased due to long term debt becoming due, and the adoption of IFRS 16.
Total debt portfolio as of 31 December 2019
|Item (SAR '000))||
||Original loan amount||Beginning balance||Additions during the year||Repayments during the year||Non-cash*||Ending balance||Period of the loans (years)|
|Long Term and Financial Lease||49,845,828||35,461,703||10,517,682||-15,073,886||6,902,093||37,807,593||2–15|
The total debt portfolio as of 31 December 2019 by lending party
||Amount in SAR '000||%|
|Banks and Export Credit Agencies||27,334,223||55%|
|Public Investment Fund||1,298,609||3%|
|Industrial Development Fund||1,380,574||3%|
|Item (SAR '000)||
|Item (SAR '000)||
|End of Service Benefits||15,525,826||12,825,267||21%|
|Early Retirement Program||32,150||37,311||-14%|