Tasnee CEO says demand for petchems strong; sharp rise in feedstock prices

Mutlaq Almorished, CEO of Tasnee

Demand for petrochemicals reached strong levels, but companies have worries due to negative economic data, including inflation, global recession and effects of the Russia-Ukraine war, Mutlaq Almorished, CEO of National Industrialization Co. (Tasnee), told Argaam in a phone call.

Commenting on the company's Q3 2022 financials, Almorished said that the increase in feedstock and freight prices as well as low prices of final products affected the company's results.

He added that feedstock prices increased significantly, as propane reached $800, while prices of final products declined, including polypropylene that lost $400.

Freight rates are linked to different contracts, according to export markets, the top executive said, noting that they rose to $8,000, compared to $800-$1,000 in the earlier periods. However, the rates began to decline in the third quarter, which would be reflected in the company's results for the fourth quarter and the next year.

Commenting on the performance of the sector and Tansee in the next period, Almorished said the fourth quarter will be much better than the previous one, and 2023 results would be near the current year.

Tasnee reported a net profit after Zakat and tax of SAR 623.2 million for the first nine months of 2022, a decline of 39%, compared with SAR 1.017 billion in the same period last year.

Meanwhile, Q3 2022 net profit dropped 95% year-on-year to SAR 17.1 million, according to data available with Argaam.