Saudi petchem sector’s net profit doubles in Q1 thanks to SABIC

The aggregate net profit of the Saudi petrochemical sector came in at SAR 7.2 billion in Q1 2017, a 99 percent year-on-year (YoY) rise, data compiled by Argaam showed.

The near doubling of profit was mostly thanks to the Saudi Basic Industries Corp. (SABIC), which saw an 80 percent YoY increase in net profit to SAR 5.23 billion, making up for 70 percent of the sector’s earnings.

On a quarterly basis, the sector’s combined net profit in Q1 rose 34 percent. 

Eight companies also reported profit growth, led by Saudi Industrial Investment Group (SIIG), on higher profit from investments and affiliates--especially after Petrochemical Conversion Company Ltd. (PCC) turned to profit in Q1-- in addition to an increase in sales volume and improved profit margins.

Alujain Corp.’s net profit in Q1 rose after it overcame a technical malfunction that halted production for nine days at the propylene and polypropylene plants of subsidiary, National Petrochemical Industrial Co. (NATPET).

Meanwhile, National Industrialization Co. (Tasnee) in Q1 was able to turn to a profit of SAR 103 million, mainly on the back of higher average selling prices.  

Saudi Kayan Petrochemical Co. (Saudi Kayan) also turned to profit in Q1 on higher selling prices and a 31- day shutdown in the same quarter a year earlier for scheduled maintenance.

On the other hand, Rabigh Refining and Petrochemical Co. (Petro Rabigh) posted net losses of SAR 240 million in Q1 2017, which was attributed to the slump in crude price which weighed on inventory assessment, reclassifying capacity payments to Rabigh Arabian Water & Electricity Company (RAWEC) from capital to expense, in addition to the air separation unit (ASU) shutdown in Q1 2017.