Shutdowns to weigh on Saudi petchems' Q2 profit: SICO

Saudi petrochemical producers are expected to report weak results for Q2-2017, due to lower product prices, sales volumes and multiple shutdowns across the sector, SICO Investment Bank said in a report Sunday.

Five companies would be hurt by temporary closures during the quarter, including Yanbu National Petrochemicals Co (Yansab) which expects a financial impact of SAR 110 million in the second quarter, following a 21-day scheduled maintenance at its ethylene glycol plant starting April 21, 2017.

Saudi Industrial Investment Group (SIIG) would be impacted by a 35-day maintenance at its 50 percent-owned subsidiary Saudi Chevron Philips (SCP) starting April 1. The shutdown could materially impact income from associates during 2Q17.

SIIG is also forecast to be hurt by a two-week shutdown at Petrochem’s Saudi Polymers unit. Petrochem is 50 percent-owned by SIIG.

Saudi International Petrochemical Co. (Sipchem) would be also impacted by a five-week and three-week shutdowns at its carbon monoxide and VAM plants, respectively.

Alujain is expected to post poor Q2 earnings, hurt by a 25-day production halt at its subsidiary NATPET.

“We keep our crude price assumptions unchanged for 2017/18 at $55/60 per bbl, and consequently keep our product price estimates also unchanged with the exception of

Methanol,” the report added.

The Bahrain-based investment bank lowered methanol price estimate from $350/357 to $300/325 for 2017/2018.

SICO revised down its profit estimates for 2017 by 0.6 percent but raised expectations for 2018 earnings by the same ratio.

Meanwhile, Saudi Kayan would see its profit higher by 4 percent/43 percent in 2017/2018, backed by higher-than-expected earnings in Q1-2017 along with higher utilization rates assumption to 85 percent from 80 percent.