Saudi petchem sector revenue exceeds SR 310 bn

jeddah: Mushtaq Ahmed

Published — Sunday 3 February 2013

Last update 3 February 2013 3:32 am

| نسخة PDF Print News | A A

Saudi Arabia is the most prominent producer in the global petrochemical industry.
The Kingdom holds approximately one-fifth of the world’s proven oil reserves, which is considered to be the world’s largest reserve base.
Saudi Arabia is producing more than two-third of the total GCC petrochemical capacity, the Gulf Petrochemicals and Chemicals Association (GPCA) reported recently.
Strong infrastructure, substantial reserves of cheaply extractable feedstock and supportive government policies help domestic producers to enjoy competitive advantage globally.
Despite challenging market conditions, the Saudi petrochemicals sector is continuing to show strong growth.
At the end of 2012, the sector accounted for more than 31.4 percent of the total market capitalization on the Saudi Stock Exchange, reaching at the level of SR 440 billion roughly.
SABIC (Saudi Basic Industries Corp.) is the flagship company among 14 listed companies, representing 61.2 of the total value of petrochemical sector.
SABIC is also the biggest petrochemicals company in the GCC region, reflecting 19.2 percent of the total market capitalization on the Saudi stock exchange.
The total market capitalization of Tadawul (market) stands at SR 1.4 trillion at end of December 2012.
The Kingdom’s 14 petrochemical companies all generated around SR 310.5 billion as revenue during 2012, reflects an increase of 5.19 percent compared with revenue of FY2011. Out of which, SR189 billion was earned by SABIC, which equates nearly 61 percent of the aggregate value.
During 2012, Saudi Kayan commenced and expanded operational capacity of many commercial operations including olefins, ethylene glycol, polypropylene, high density polyethylene and Amines etc.
The company remained at top in terms of percentage growth. It’s revenue increased by 295 percent to record SR9.5 billion.
Alujain Corporation and Saudi Industrial Investment Group are other significant advancers, growing 43 percent and 27 percent respectively.
Core operating profitability of petrochemical sector declined significantly, mainly due to decrease in overall product prices.
Total operating income for FY 2012 reported SR 53 billion compared with SR 64.25 billion for FY 2011, a decrease of 17.52 percent.
Three out of 14 companies including , National Petrochemical (Petrochem), Sahara Petrochemical Company and Saudi Kayan showed operating losses during 2012.
On the positive side, Petrorabigh operating income increased exceptionally by 536 percent, it achieved SR 654 million during FY2012 compared with SR103 million of FY2011.
Alujain Corporation’s operating income also increased by 127 percent during 2012.
The petrochemical sector managed to earn an adequate margin of 10.9 percent, generating SR 33.85 billion as net Income during fiscal year 2012. SABIC dominated the profitability, contributing SR24.7 or 73 percent of the consolidated value.
Unfortunately, its bottom line decreased by 15.47 percent, which is attributed to the decrease in sales prices for certain products, despite higher sales and production volumes.
Furthermore, the heavyweight Saudi Arabian Fertilizers Co. (SAFCO) showed a maximum net profit margin of 77.6 percent.
Saudi-listed petrochemical companies’ total assets grew to SR 596 billion, recording a yearly growth of over two percent.
SABIC’s assets are amounting to SR 338 billion, a relative sector share of 57 percent.
National Industrialization Co. and Saudi Industrial Investment Group topped on percentage basis, both achieved nearly 14 percent higher value of total assets in 2012.
At Saudi Stock Market, the petrochemical sector has been showing a positive drive since the start of 2012.
The sector’s index added a healthy return nearly 16.5 percent at the end of the first quarter of 2012, crossing the 7,000 points mark.
Subsequently, it could not sustain upward momentum due to wide fluctuation in oil prices. The index finally closed lower by 6.04 percent, trimming back 6,000 points-mark to end at 5,856.41 point on December 31, 2012.
Saudi Arabia’s benchmark stock index (TASI) achieved a return of 5.98 percent during 2012, closing at 6,801.22 points.
Nama Chemicals Co. outdid the rest of the petrochemical issues, marching higher roughly 29 percent to SR 12.85 at the end of 2012.
Saudi Industrial Investment Group and heavyweight Saudi Arabian Fertilizers Co. (SAFCO) followed it, advancing 19 percent and 15 percent respectively.

— Mushtaq Ahmed is senior financial analyst at Zughaibi & Kabbani Financial Consultants.

What's happening around Saudi Arabia

JEDDAH: Officials from the agriculture and health ministries are set to hold a crucial meeting later this month on how to convince skeptical camel owners that the animals are the cause of Middle East Respiratory Syndrome (MERS) coronavirus infections...
RIYADH: The Kingdom successfully implemented an integrated health plan during the Haj season to make the sacred areas free of communicable diseases, Health Minister Khalid Al-Falih said in Kuwait on Tuesday.The minister who was leading the Saudi dele...
RIYADH: Justice ministers of the Gulf Cooperation Council (GCC) have recommended the formation of a joint system to fight terrorism, the Saudi Press Agency reported.Winding up their 27th meeting in Doha, Qatar, on Tuesday, the ministers formulated a...
JEDDAH: Several neighborhoods in Taif have been suffering from water shortages recently, according to residents.They said that they have had to queue for many hours outside water distribution points in the city for tankers. Many live in old neighborh...
ABHA: More and more young Saudi women are found involved in blackmailing men and extorting money, with some even boasting about their “successes,” thanks to social networking sites, dating apps and hacked smart phones. This is the latest phenomenon h...
DAMMAM: The Saudi Commission for Tourism and National Heritage (SCTNH) has become the fastest creator of jobs in the Kingdom, according to the World Tourism Organization (WTO).Taleb Al-Refai, secretary-general of the WTO, said that the Kingdom’s stra...
JEDDAH: As many as 906 Saudis have been arrested on terror charges during the last four months in the Kingdom, although the arrests during the last four years include people of various nationalities.Foreigners have come under greater focus following...
JEDDAH: Security authorities have worked to challenge extremist thoughts and ideologies by arresting all those who support such ideologies and are involved in fighting abroad, and correct their views by guiding them to the right path. At the Prince M...
RIYADH: Abdul Lateef Al-Asheikh, municipal and rural affairs minister, has awarded 156 sanitation and public improvement projects worth SR1.17 billion to several contractors recently.There was SR236 million budgeted for various environmental projects...
RIYADH: In a unique opportunity to promote local arts and culture, five Saudi artists representing the cities of Al-Ahsa, Dammam, Hail, Jeddah and Al-Jouf are participating in the first GCC handicrafts exhibition that began in Doha, Qatar on Tuesday....
JEDDAH: The Indian government has sought the help of the Saudi Health Ministry to find 59 Indian pilgrims who went missing following the stampede in Mina during the Haj this year.The request was made by Minister of State for External Affairs Gen. V.K...
RIYADH: A suspected MERS-infected Saudi national who died last week in Manila appear to have transmitted the virus to three persons who had close contact with him.The three have been admitted to the hospital after showing symptoms of the virus, the D...
DAMMAM: A number of agreements to finance projects were struck in the past three months, but the young entrepreneurs who floated these projects were in debts before their projects started because of violations. Agreements were signed for cash amounts...
JEDDAH: The Custodian of the Two Holy Mosques’ Haj Program has hosted 36,000 pilgrims over the past 20 years.Of this number, there were 13,000 family members of Palestinian martyrs who performed Haj, according to Sheikh Saleh Al-Asheikh, Islamic affa...
RIYADH: Abdul Rahman Al-Zamil, president of the Council of Saudi Chambers (CSC), will inaugurate the First Elevators and Escalators Exhibition in Riyadh this month.“The exhibition is regarded as an important event as almost all local companies, malls...

Stay Connected