RIYADH, 31 January 2008 — Saudi International Petrochemical Company (Sipchem) will raise its capital to SR2 billion through rights issue, Engineer Ahmed Al-Ohali, chief executive officer of Sipchem told newsmen here Tuesday.
“The decision to raise the capital was taken at the meeting of the general assembly of the shareholders held Tuesday, Al-Ohali said, adding that a total of 133 million shares will be issued at SR15 per share, which includes par value SR10 and premium SR5. Eligible subscribers are those who have registered in the Saudi stock market, he added.
Al-Ohali said raising the capital is intended to finance the company’s second phase of its project which would include a total investment of $1.7 million. “These projects include installation of carbon monoxide plant, acetic acid and vinyl acetate monomers from the methanol plant,” he said, pointing out that these plants are currently under construction and will be commissioned during the first quarter of 2009. “The project will be the first of its kind in the Middle East and it will manufacture specialized products that will have added value,” he said, adding that the products will be exported to countries in Europe, Asia and the Middle East.
Sipchem currently operates a methanol plant with a capacity of 1 million mtpa, and a BDO plant with 75,000 mtpa. The raw materials for production in the second phase will be derived from the company’s methanol plant.
Dr. Fahad Mubarak, financial advisor from Morgan Stanley, said the banks are currently working out the modalities of the issue of shares and an announcement will be made next week regarding date of issue of share which would run for a fortnight.
Last year, he said Sipchem realized SR594 million in net profits, or SR100 million increase over last year’s SR494 million net profits. This 20.2 percent growth in profits resulted from increase in production and sales during this year, fostered by appreciation of prices of the company’s major products.
During the last quarter of 2007, Sipchem’s net profits amounted to SR254 million, i.e. SR78 million increase or 44.3 percent growth over the same quarter of 2006 (SR176 million).
In 2007, the volume of sales amounted to SR1.5 billion, i.e., SR200 million or 15.4 percent growth over 2006 (SR 1.3 billion). Shareholders’ and minority equity increased to SR3.9 billion compared to SR2.9 billion in 2006, marking a growth of SR1 billion or 34.5 percent in the period under review. Operating profits in 2007 amounted to SR896 million compared to 773 million for the same period of 2006, or an increase of SR123 million or 16 percent growth over last year.
Earnings per share in 2007 increased to SR2.97, compared to SR2.47 in 2006.