Tasnee CEO says demand for most products improved in Q2

The demand for most products began to improve in Q2 2024, driven by signs of global economic recovery and partial inflation control in major economies, Fawaz Al-Fawaz, CEO of National Industrialization Co. (Tasnee), told Argaam in an interview.

This led to gradual price improvements despite geopolitical and logistical challenges in supply chains and rising costs, he added.

This was despite lower average selling prices and higher cost of sales in line with higher sales volume, as well as selling, distribution, and general expenses, and lower other revenues. 

Al-Fawaz explained that revenues improved in Q2 2024 due to higher sales volume generated from the petrochemical and manufacturing segments, as a result of the company’s sustained efforts to maintain the operating efficiency levels of its factories, in addition to the consolidation of revenues from the Saudi Acrylic Polymers Co. (SAPCO) as of Dec. 5, 2023. 

Tasnee is focusing on the local market, the Middle East and North Africa (MENA) region, Turkey, Europe, and the southern United States, as most markets are still affected by geopolitical and economic factors in addition to logistical and supply chain challenges and the weakness of demand from the Chinese market. 

The CEO expected that the third quarter’s financials to depend on many economic factors and customers' desire to boost their inventory, so it is difficult to determine the future performance based on these variables. 

The demand is projected to extend improvement as the major economies begin to recover, and thus the average prices of products are estimated to rise in light of the continuing challenges of supply chains and the rise in logistical costs. 

According to data compiled by Argaam, Tasnee reported a loss of SAR 19.2 million in H1 2024, against a net profit of SAR 113.5 million in the year-earlier period. In Q2 2024, the company’s bottom line jumped 68% to SAR 52.8 million.