Tasnee Q1 financials ‘good’ amid current conditions; expects stable demand: CEO

Mutlaq Al-Morished, CEO, National Industrialization Co.

National Industrialization Co.’s (Tasnee) Q1 2023 earnings decline was driven by a slump in most product prices, CEO Mutlaq Al-Morished told Argaam.  

The company’s first-quarter results were robust amid the current economic and geopolitical conditions, he added.  

Al Morished described the petrochemical market as huge, expecting demand levels to sustain in light of these prices, but the industry may see profit margins squeezed amid global economic headwinds. 

Tasnee’s product portfolio saw bullish demand in Q1 as China reopened borders and demand rebounded in some regions worldwide, said the CEO, adding that the company’s Q1 sales volumes stood at 695,000 tons. 

By the end of Q1, Tasnee witnessed some challenges due to continuously high-interest rates and the collapse of some banks in the US and Europe, which could lead to more uncertainty and caution from some clients. 

Propane’s average prices reached $470/ton in Q1 2023. 

Speaking of the ilmenite smelter project, the CEO indicated that the first furnace is working at a reasonable capacity, given the current engineering and operational challenges, at an average capacity of 42 MW (60/70% of the facility’s design capacity) to maintain safety.  

Work is underway on the project to finalize the engineering and operational study with the contracting firm and Tronox to ramp up capacity. 

Al Morished noted that it is difficult at present to issue Q2 2023 forecasts amid these changing conditions. However, he expects demand and performance levels to hover near the current levels over the coming period. 

Tasnee’s Q1 2023 net earnings dropped to SAR 82.1 million, compared to SAR 309 million a year earlier, Argaam reported.