Nama Chemicals losses hit SAR 1 bln in Q1

Nama Chemicals has incurred SAR 1.07 billion in accumulated losses in the period ended March 31, 2017, accounting for 83.6 percent of paid-in capital, the company said in a statement to Saudi bourse, Tadawul.

These losses were attributed to a drop in production capacity over the previous years, fierce competition, the global economic slowdown, and customs tariffs in European markets. Therefore, the company cut the book value of assets by SAR 655 million.

The lower global demand for resin epoxy amid the economic slowdown in China has also weighed on prices.

In addition, the 15 percent depreciation in euro/SAR exchange rate since 2015, led to the drop in the company’s sales to European markets.

Duties on Saudi imports to the European Union countries as well as Turkey by 6.5 percent also led to a reduction in the production at resin epoxy plants.

Nama’s production costs rose 2.3 percent due to a hike in power and water tariffs in the kingdom came among the reasons that led to a 2.3 percent rise in.

The Saudi chemicals producer will be subject to the CMA’s new rules governing listed companies with accumulated losses of 20 percent of their capital, as of April 22, 2017.