Saudi Kayan, an affiliate of the Middle East’s biggest petrochemicals producer Saudi Basic Industries Corporation, narrowed its fourth-quarter net loss on the back of rise in production.
Net loss after Zakat and taxes fell to 110.9 million riyals (Dh108.6m) from 220.3m riyals in a year-earlier period, the company said on Monday in a statement to the Saudi stock exchange, where its shares are traded.
The producer, which is 35 per cent owned by Sabic, said total sales for the period climbed to 2.64 billion riyals from 2.3bn riyals recorded for the last quarter of 2017.
“The reason of decrease in net loss during the current quarter is due to the improvement in the operating performance of company plants that contributed to increase in quantities produced and sold,” Saudi Kayan said in the bourse filing.
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The narrowing of the net loss came despite the “decrease in the average selling prices of the products, which impacted the results of the current quarter, as well as the increase in the average feedstock price, administrative and general expenses selling and distribution and finance charges”, it noted.
Petrochemical producers in the six-member economic bloc of GCC have struggled to maintain profitability in the wake of the oil price slump and a slowdown in global growth. Fluctuating demand in emerging markets, which are among the biggest consumers of the petchem products, is impacting petrochemical producers.
The company’s profit for the 12-month period, however, climbed more than 150 per cent year-on-year to 1.7bn riyals. Total sales rose to 12.3bn riyals at the of 2018 from 9.98bn riyals from a year earlier.
The company attributed the increase in net profit to “improvement in the operating performance for most of the plants."
