RIYADH: Saudi Arabian Fertilizers Co’s (SAFCO) fourth-quarter net profit fell to its lowest level in almost three years after a maintenance shutdown cut output.
The near 30 percent fall in fourth-quarter profit to SR376 million ($100 million) from a year earlier was below average analyst forecasts of SR418 million. The drop was also SAFCO’s fifth straight decline in quarterly profit.
Operating profit was down 55 percent at SR306 million in the fourth quarter, while gross profit fell 54 percent to SR314 million, SAFCO said.
Shares in SAFCO, 42.9-percent owned by petrochemical giant Saudi Arabian Basic Industries Corp, closed 1 percent lower.
“The main reason for the decline (of net profit) in the fourth quarter is because of lower production due to maintenance at the firm’s plants,” SAFCO said in a statement posted on the bourse website. Its chairman Mohamed Al-Mady told Dubai-based Al Arabiya television that four plants had to shut down for one month, which hit both output and sales.
SAFCO’s net profit for 2009 was SR1.85 billion — the lowest since 2006 — or SR7.38 per share, down from SR17.1 per share in 2008. SAFCO said global prices of urea and ammonia were weaker in 2009 compared to 2008.
Mady said prices are expected to improve in 2010, but he declined to say during which quarter this improvement would start.
He dismissed the likelihood of new output interruptions this year.
SAFCO sells the bulk of its output to India, the Far East, the United States, Australia and Saudi Arabia, Mady said.