Chemanol Q1 2021 backed by higher product prices, market rebound: chairman

Abdullah Al Sanea, Chairman of Methanol Chemicals Co.

Methanol Chemicals Co.’s (Chemanol) Q1 2021 earnings were driven by higher product prices and improved market conditions, in addition to its operating performance and cost-efficiency strategy, Chairman Abdullah Al Sanea told Argaam.
 

“Last year was full of challenges amid a steep decline in both demand and prices,” Al Sanea added.
 

Methanol prices are forecast to maintain improved levels until year-end in the light of Saudi Arabia’s economic climate and stronger demand across the world, he stated, adding that prices will unlikely witness steep declines as seen in 2020.
 

The chairman also indicated that the company submitted a request to the Capital Market Authority (CMA) to cut capital and then increase it via a rights issue. The request is under study and the company is awaiting the market’s regulator’s approval, he added.
 

The measures are required to enable the company to reschedule its outstanding loans, especially as it braces for new expansions, Al Sanea noted.
 

Furthermore, the Ministry of Energy’s approval for allocating the required feedstock to expand the methanol plant depends on the projects’ implementation. However, the COVID-19 outbreak weighed on the studies related to the dimethyl disulfide (DMDS) plant and the methyl diethanolamine (MDEA) factory, said Al Sanea, expecting to see more progress this year.
 

Chemanol reported SAR 29.9 million in profit in Q1 2021, versus SAR 28.6 million in losses in the year-earlier period.
 

In November, Chemanol’s board of directors approved changing its recommendation on capital reduction to 44% from 27.3%. They also recommended a capital hike through SAR 480 million rights issue to be implemented following the capital cut, Argaam reported.