Advanced CEO says ‘upbeat’ about 2025 performance

Fahad Al Matrafi CEO of Advanced Petrochemical Co

Fahad Al Matrafi, CEO of Advanced Petrochemical Co., said that the decline in the company's 2024 results year-on-year is mainly due to logging SAR 212 million impairment provision for the company’s investment in SK Advanced, in addition to the increase in investment losses in the subsidiary by about SAR 35 million.

In an interview with Argaam, the top executive added that he is optimistic about the company's performance in 2025, citing several positive factors, including the absence of periodic maintenance works, the operation of the new project that boost sales volumes, along with improved profit margins amid low interest rates and stable geopolitical conditions. He also noted that the company will not incur losses from its investment in SK Advanced after setting aside the provision in 2024.

As for the company’s dividend policy, Al Matrafi said that the board will review its financial performance after the full commissioning of the new plant.

He added that the 10% increase in propane prices and a 10% decrease in sales volumes due to scheduled maintenance also impacted the company's results, despite a slight improvement in sales prices by 2%.

Meanwhile, the continued losses of SK Advanced and the high electricity prices in South Korea prompted the external auditor to recommend the provision, said the CEO, noting that after recording it, there will be no additional negative impact on Advanced's results in the event of continued losses of its investment in the future.

He added that the partners are currently working on evaluating this investment by leveraging the recently announced Korean government initiatives, in addition to studying several other options, which, once implemented, will reflect positively on Advanced's results in the future.

The CEO also indicated that the decline in Q4 2024 profit margins by about $100 per ton was the result of drop in sales prices by about $80 per ton and rise in the cost of purchased propane and propylene by $25 and $35 per ton, respectively.

Regarding the new project, Al Matrafi noted that the company has started operating the utility units at its new propylene plant with 800,000-ton capacity, while the propylene and polypropylene plants are being prepared for commissioning, with the financial impact likely to be seen in Q2 2025.