Saudi petchem companies post weaker financial results in Q2
Lower petchem prices lead to weaker profit
SABIC: the lowest profit of the last 10 years
Saudi Basic Industries Corp.’s (SABIC) net profit during the second quarter of 2019 plunged to the lowest level since 2009 to be reported at SAR2.12 billion ($565 million), indicating a sharp decrease of 68% from SAR6.7 billion reported in the Q2 2018.
The company’s reduced profit was attributed to weaker demand for chemicals and plastics amid a downturn in the global economy. Lower petrochemical prices negatively affected the producer’s second-quarter results.
Yanbu National Petrochemical Co’s (Yansab) net profit in the second quarter of 2019 slumped by around 62% year-on-year to SAR316 million ($84 million).
The decrease in net profit was attributed to lower average selling and feedstock prices despite higher production and sales quantity.
National Industrialization Company (Tasnee) posted a net profit of SAR296.7 million ($79 million) for the second quarter of 2019, indicating a decrease of 25% when compared to the same period of 2018.
The company cited the decrease in average selling prices of petrochemical products as the main reason behind its lower Q2 profit.
Saudi Arabian producer Advanced Petrochemical’s net profit in the second quarter of 2019 was 24.2% lower when compared to the same period in 2018 to be reported at SAR192 million ($52 million), mainly due to a decrease of 2.8% in sales volume.
On a quarterly basis, however, the company’s net profit indicated an 18.6% increase on the back of an increase of 5.1% in propylene prices.
Saudi Kayan Petrochemical’s net profit for the second quarter of 2019 plunged more than 96% on a yearly basis to SAR39.5 million ($10.5 million).
The decline in net profit was attributed to lower average selling prices of products and higher financing costs.
When compared to other Saudi producers, Saudi International Petrochemical Co (Sipchem) reported a relatively smaller decrease of 0.24% year-on-year in its profit during the second quarter of 2019. The company’s profit reached SAR210.9 million ($56 million) in Q2 amid lower sales.
Sipchem’s Q2 profit, however, surged 83.9% from a quarter earlier.
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