Advanced Petrochemicals' earnings down to $44m in Q1
RIYADH, April 11, 2022
Advanced Petrochemicals Company has announced lower-than-expected earnings of SR164 million ($43.6 million) for the first three months of the year.
The miss was primarily due to increased other fixed costs (which we had expected to improve on the seasonality factors in Q1), and likely further impacted by lower product spreads, offsetting increased sales volume and controlled operating costs, stated Al Rajhi Capital, a leading financial services provider in Saudi Arabia, in its review.
Based at Jubail Industrial City, Advanced Petrochemicals boasts a total production capacity of 450,000 tonnes of polypropylene, which is distributed locally, regionally and internationally by competent affiliates using advanced packing techniques.
Going forward, Al Rajhi said it expects product spreads to improve, on the back of likely improvement in average PP prices (already up by 10% so far in Q2) on limited product availability and healthy regional demand.
Further, higher freight rates amid tight container availability, and relatively slower increase expected in feedstock prices on easing oil prices, may further drive the product spreads higher, it stated.
Last month, Advanced Petrochemical had unveiled its plans to increase the capital by 20% to SR2.6 billion ($693 million) as part of its expansion strategy.
Under this arrangement, the Saudi group will be granting bonus shares (one for every five shares held) to support its capital base to match the size of company assets, it added.-TradeArabia News Service
