Saudi Arabia’s Advanced Petrochemicals has posted a net profit of SR180 million ($47.9million) in the fourth quarter (Q4) of the year, as against SR192 million in Q4 2019, marking a fall of 2.1%, a report said.
The company earned a revenue of SR632 million during the period, as against SR 618 million during the corresponding period in 2019, said Al Rajhi Capital, a leading financial services provider in the kingdom.
Higher-than-expected COGS and SG&A costs due to seasonality factors are likely to have pushed gross and operating profits slightly below estimates, the report said.
Further, equity income from SK Advanced at SR23.7 million vs. our expectation of SR25.9 million led to a net income of SR180 million (+15% q-o-q), missing our (SR207 million) as well as consensus (SR197 million) estimates.
On Q32020 earnings call, the management reconfirmed that, as per the business plan, there will be a scheduled shutdown of around 25 days at the Saudi plant in March 2021 for replacing catalysts, according to the report.
The planned capex would be SR130 million. The last maintenance activity at the Saudi plant was for around 22 days in Q1 2018.APPC’s subsidiary inks off-take agreements for the sale of polypropylene products.
APPC last month announced the signing of long-term off-take agreements by its 100% owned subsidiary AGIC for the sale of Polypropylene with three different companies, namely Vinmar International LLC of USA (250ktpa), Tricon Dry Chemicals LLC of USA (250ktpa), and Mitsubishi Corporation of Japan (120ktpa).
With these agreements, the company has now secured around ~77% of PP production before its new PDH-PP plant starts commercial operation, which is likely in H2 2024. This agreement is valid till Dec 2028 (from the date of the commercial production).
“We believe that these agreements will provide strong revenue visibility for the company once the plant comes on stream,” Al Rajhi Capital said in the report. – TradeArabia News Service