Faqs

Reasons for declining net profit during the year 2020:

1- The jointly managed projects achieved losses of (15) million riyals for the current period, compared to profits of 274 million riyals for the same period of the previous year, due to the sharp decline in product prices, as a result of the global economy affected by the Corona pandemic.

2- The decline of the group’s share in the profits of the National Petrochemical Company (Petrochem) to reach 114 million riyals for the current period compared to 336 million riyals for the same period of the previous year, as a result of a decrease in the selling prices of products, in addition to Petrochem’s loss of the entire value of the polystyrene unit, which was suspended During the current period, the group’s share of this operation amounted to a loss of (127) million riyals.

3- Decrease in other income.

The group had announced on September 20, 2020, on the Tadawul website, the decision of its board of directors to approve the start of discussions with the National Petrochemical Company (Petrochem) on a possible deal to merge the two companies’ business, and the topic is still under study, and it should be noted that entering into this study does not necessarily mean that The deal will be concluded between the two parties, and the Saudi group will announce any developments at a later time.

On February 1, 2021, the group announced the scheduled suspension of one of its subsidiary projects (Jubail Chevron Phillips) for scheduled maintenance work, and the renewal of catalytic materials, as of today 1-2-2021 AD, and extending for a period of 41 days, while the work of the remaining projects of the company continues.
It is expected that the financial impact of this suspension will appear on the financial results for the first quarter of the year 2021 AD, and it is difficult to estimate the financial impact of this suspension due to the continuous change in the prices of the final products.
Note that there is scheduled maintenance for the company’s other project (Saudi Chevron Phillips Company) during the fourth quarter of 2021, and it will continue for a period of 26 days, and it will be announced on time.

There is an improvement in the price levels of the company’s products at the beginning of 2021, and it is difficult to predict what may happen in the future.

The company depends in its business on many external parties, such as electricity and cooling water, but one of the most important factors that may affect the level of production capacity is the availability of feedstock supply (gas) from Aramco, which is the only source of gas.

In the event that additional values are available from Aramco, as well as investment feasibility that benefits the company’s shareholders, the company will work to study all available investment opportunities.

The group’s income statement is a consolidated statement of income that includes the items of the group’s income statement and Petrochem income statement items. Therefore, the return to the non-controlling interests is the shares of the non-controlling partner in Petrochem projects.

The group is consolidating its lists with Petrochem by way of complete consolidation. Therefore, we see the group’s investment in Petrochem distributed on several items in the balance sheet and income statement.