Saudi Kayan’s Q1 figures exceed forecasts, plants operate at full capacity post maintenance, says Alruhaily

Omar Alruhaily, president and CEO, Saudi Kayan

Saudi Kayan Petrochemical Co.’s (Saudi Kayan) Q1 2021 positive results were backed by a significant rally in the global demand, as markets gradually reopened following the COVID-19 outbreak, company’s president and chief executive officer, Omar Alruhaily told Argaam.

“This came as average selling prices for Q1 2021 increased by 55% year-on-year (YoY) and by 30% quarter-on-quarter (QoQ), thanks to lower global output levels and improved demand,” added Alruhaily.

Alruhaily cited the company plants’ outstanding performance in the first quarter, adding that it reported highly efficient quarterly performance indicators.

Earlier in April, Saudi Kayan successfully restarted operations at the olefins plant, after the completion of 36-day scheduled maintenance works, despite the pandemic negative repercussions. This will have a positive impact on the reliability and operating efficiency of the company's plants.

“The company took the required precautionary measures related to the regular maintenance works, including increasing the inventory levels to mitigate the impact of the plant shutdown and to report reasonable sales, in addition to making the optimum benefit of the prices hike at this period,” he noted.

The petrochemicals prices are seen to gradually stabilize in 2021, said Alruhaily, adding that the petrochemicals industry sees an abundant supply/ demand and pressured prices.

When asked about the Ministry of Energy’s approval on Kayan’s request to increase ethane allocation by a maximum of 30 million cubic feet per day (cf/d), Alruhaily indicated that this came within its feedstock restructuring strategy, which aimed at enhancing business efficiency as well as financial performance, which will likely reflect positively on the company’s profitability, in line with shareholders’ aspirations.

Saudi Kayan is working with the ministry to develop a timeframe to start utilizing the additional feedstock, which will be announced in due course.

Saudi Kayan reported net profit after Zakat and tax of SAR 492.9 million in Q1 2021, versus net loss after Zakat and tax of SAR 516.8 million in year-earlier period, driven by higher average selling prices and lower financing costs, Argaam reported.