Advanced expects better demand, product selling prices in Q1 2021: chairman

Khalifa Al Mulhem, Chairman of Advanced Petrochemical Co.

Advanced Petrochemical Co. expects better product selling prices in Q1 2021, driven by a rise in demand during Q4 2020 and market recovery from the COVID-19 pandemic, Chairman Khalifa Al Mulhem told Argaam in a telephone interview.

Commenting on the Q4 2020 financial results, Al Mulhem said net earnings did not see a significant drop but were down due to lower polypropylene prices and a decrease in the company’s profit share from Advances SK, compared to Q4 2019.

The annual polypropylene production volume stood at 530,000 tons in 2020, while average selling prices reached $1,020 per ton, down from $1,100 per ton in Q4 2019.

“Advanced will focus on its new project in Jubail Industrial City 2, which will boost its results,” Al Mulhem added, expecting construction works to start this year. The commercial operation is scheduled to begin by the end of 2023 or early 2024.

Elsewhere, the chairman concluded that one of the company’s plants will halt operations due to scheduled maintenance this year.

Advanced reported an estimated net profit after Zakat and tax of SAR 596 million for the fiscal year 2020, compared to a net profit of SAR 759.3 million a year earlier, Argaam reported.

In March 2020, the petrochemical producer’s subsidiary, Advanced Global Investment Co. (AGIC) signed an agreement with SK Gas Petrochemical Pte. Ltd. (SKGP), a unit of SK Gas Co. Ltd to build and operate propane dehydrogenation (PDH) and polypropylene (PP) complex in Jubail Industrial City.