Tunisian battery manufacturer ASSAD has published its 2025 financial statements, reporting a net profit of TND 4.1 million and a sharp increase in shareholders’ equity from TND 3.1 million to TND 46.3 million.
On the surface, the figures suggest a strong turnaround. However, a closer examination shows that the reported recovery rests on two accounting treatments, one of which has been formally challenged by the company’s external auditors, while a TND 234 million customs dispute remains pending before the Tunis Court of Appeal.
Reported profit versus auditors’ assessment
The auditors’ reservation focuses on TND 17.16 million in provisions related mainly to receivables and investments in subsidiaries ENAS and AS Distribution.
ASSAD recorded these provisions directly in shareholders’ equity under “Accounting Adjustments” rather than recognizing them as expenses.
According to the auditors, this treatment does not comply with Tunisian Accounting Standard NCT 11, which applies only to corrections of fundamental errors or changes in accounting methods. They state that the company’s net profit has therefore been overstated by TND 17.16 million.
After adjusting for this issue, ASSAD’s reported TND 4.1 million profit would become an estimated loss of around TND 13 million, while earnings per share would fall from TND 0.172 to approximately minus TND 0.54.
The auditors note that the company relied on its reported profitability to justify the assumption that it remains a going concern, even though the reported profit is disputed.
Equity boosted by property revaluation
A second major factor behind the improvement in ASSAD’s balance sheet was the revaluation of its land and buildings, approved by the board of directors on December 29, 2025, with effect from December 31.
The revaluation created TND 39.1 million in special reserves.
Without this accounting adjustment, shareholders’ equity would have stood at only TND 7.2 million, well below one-third of the company’s TND 24 million share capital, a level that could have required an extraordinary shareholders’ meeting to consider dissolution under Tunisia’s Commercial Companies Code.
While the revaluation complies with Accounting Standard NCT 5, auditors noted that some valuations were based on limited market evidence because of the lack of comparable transactions.
TND 234 million customs dispute remains unresolved
The company’s most significant risk remains a TND 234 million customs penalty resulting from a court ruling issued on July 11, 2024.
The amount represents roughly five times ASSAD’s revalued equity and 32 times its equity excluding the property revaluation.
No provision has been booked, as the company classifies the case as a contingent liability.
ASSAD expects to benefit from an amnesty introduced under Tunisia’s 2025 Finance Law, which would reduce its payment obligation to TND 20.3 million, payable over 20 quarterly installments.
However, auditors stressed that although customs authorities proposed the arrangement on May 2, 2025, it has yet to be officially registered in the customs recovery system, meaning it is still not legally enforceable.
Following the publication of the financial statements, the Tunis Court of Appeal ruled on June 5, 2026, that customs authorities could re-examine the charges and adjourned the case until July 3. While this procedural development may be favorable to the company, it does not resolve either the legal issues or the financial exposure.
Heavy exposure to Algerian subsidiary
ASSAD’s operating performance improved in 2025, with EBITDA rising 28% to TND 18.3 million, higher gross margins and stronger operating cash flows.
However, first-quarter 2026 figures indicate renewed pressure.
Revenue declined 14.9%, production fell 34%, and exports dropped 41.3%, mainly because the company’s Algerian subsidiary BAA experienced delays in renewing its import licence.
BAA generated TND 37.4 million in sales during 2025, accounting for 69% of ASSAD’s exports.
ASSAD also has around TND 34 million in unprovided exposure to the subsidiary, including TND 29 million in trade receivables and TND 5.1 million in debit notes and dividends receivable.
Management said no impairment provision was necessary because it plans to increase BAA’s capital to facilitate the repatriation of funds. However, the first-quarter results suggest the subsidiary is currently unable to import products from ASSAD.
Debt profile shifts toward short-term financing
Although ASSAD reported that total debt declined 4.9% to TND 76.4 million, the debt structure changed significantly.
Medium- and long-term borrowings fell 52% to TND 10.4 million, while short-term working capital facilities increased 12.5% to TND 66 million.
The company also reported:
Negative cash of TND 6 million.
A current ratio of 0.87.
Most of its assets pledged as collateral to lending banks.
Meanwhile, tax liabilities increased 43% to TND 5.7 million, social security liabilities rose 31% to TND 1.9 million, and a tax audit covering the 2021 fiscal year began in May 2026 without any related provision being recognized.
Shareholders approved disputed financial statements
ASSAD shareholders approved the 2025 financial statements at the annual general meeting held on June 25, 2026.
However, according to the company’s own auditors, the accounts portray a different picture: an estimated TND 13 million loss, supported by a TND 39 million property revaluation, significant exposure to an Algerian subsidiary facing operational constraints, reliance on short-term financing, and uncertainty surrounding a major customs case.
While ASSAD’s operational performance improved during 2025, the company’s financial outlook remains closely tied to the outcome of the unresolved customs litigation.
