ALKHOBAR: Saudi Arabia’s National Industrialization Co. (Tasnee) said it would cut costs and revise foreign exchange and derivatives contracts at a subsidiary after swinging to a first-quarter loss.

The diversified industrial firm has interests in petrochemicals, metals and chemicals and is one of the world’s largest producers of titanium dioxide through its Cristal subsidiary, in which it increased its stake at the end of last year.

However, like many petrochemical firms in the kingdom, Tasnee’s earnings have suffered as product prices are closely tied to oil prices, which have slumped since mid-2014. Saudi producers also benefit from subsidized energy and feedstock costs, so lower crude prices compress their margins.

For the first quarter of 2015, Tasnee posted a net loss of SR332.5 million ($88.7 million) versus a profit of SR320.8 million in the same period a year ago, according to a bourse filing.

This widely missed the forecasts of SICO Bahrain and NCB Capital, which had forecast Tasnee would make a quarterly net profit of SR150 million and SR151 million respectively.

Tasnee’s shares suffered as a result, closing 5.4 percent down on Monday.

In a separate statement, Tasnee said sales volumes rose but the value of those sales dropped 10.6 percent year on year to SR3.94 billion.

Also dragging Tasnee’s results were higher expenses from foreign exchange hedging and derivatives contracts transacted by a subsidiary, the firm said in the bourse filing without providing any details.

However, in the separate statement, CEO Mutlaq Al-Morished was quoted as saying the company was working on revising those contracts with the local banks in question.