Sipchem’s Q2 profit hit most by lower sales: CEO

Abdullah Al-Saadoon, CEO of Sipchem 

Abdullah Al-Saadoon, CEO of Sahara International Petrochemical Co. (Sipchem), expected better product prices in the third and fourth quarters of 2023, after a marginal decline in the second quarter, compared to Q1 2023. Product prices hit their lowest level and they are currently steady.

Sipchem posted a very strong set of results for Q2 2023, considering global market conditions in addition to halted operations at two of plants, which represent 25% of total production. The second-quarter profits were hit by a drop in production and sales rather than lower prices, he told Al-Arabiya TV.

Feedstock prices declined between 18% and 19%, which largely helped reduce prices and volumes. There are positive aspects with regard to product prices, which began to inch lower with an average of 5% in Q2 2023 compared to the previous quarter, while some products began to rise, especially in June and July 2023, according to the CEO.

The top official also indicated that Sipchem's stockpile in Europe has a larger impact on demand than in Asia and China, saying that prices would move in case of increased demand, as they began to witness signs of a rebound.

Sipchem reported a 67% tumble in H1 2023 net profit to SAR 783.3 million from SAR 2.34 billion a year earlier. The second-quarter net profit plummeted 75% to SAR 312.9 million from SAR 1.26 billion in Q2 2022.