Some companies disclose profit margin while others ignore

After a period of ambiguity that lasted for years in the disclosures of listed companies regarding the file of deals and contracts won by the companies, and the profit margin was hidden from shareholders and all rules, customs and foundations of transparency and disclosure were broken, the cable company began to establish a new approach related to announcing the expected profit margin, in an initiative that must be continued and circulated to all listed companies.

Breaking away from the previous lack of transparency, the company recently secured a contract valued at 5.4 million dinars and disclosed that the financial impact of the contract would result in operating profits ranging between 4% and 6% in 2024. This heralds a significant shift in the approach to disclosing expected profit margins, providing shareholders and investors with essential information that should not be exclusive or hidden, reports Al-Jarida daily.

Industry insiders note that this development has the potential for a major positive impact, especially as the stock market is under scrutiny from foreign companies, and regional markets are witnessing intense competition.

Efforts are underway to elevate the market to the status of emerging markets, and transparent disclosures, particularly regarding profit margins, by leading and operating companies can serve as a model for responsible corporate behavior. The role of the stock exchange company is crucial in enforcing transparency in this area. It is expected that companies will follow suit in announcing profit margins for contracts and tenders, as any failure in this regard would undermine the progress made and run counter to transparency principles.

This move is seen as a step away from deliberate attempts to withhold and monopolize data and information, a departure from the principles of transparency. Companies engaging in projects, partnerships, mergers, or collaborations are presumed to have comprehensive knowledge of the associated returns.

The stock exchange company’s role in enforcing transparency is reinforced by legal provisions and executive regulations of the Capital Markets Authority, emphasizing the need for clear disclosure of factors affecting stock performance. The onus is now on the stock exchange to ensure that this principle becomes mandatory across the board.