MOSCOW (MRC) -- Saudi Arabia's Yanbu National Petrochemical Co (Yansab) beat analysts' forecasts despite reporting a 36.4 percent drop in fourth-quarter net profit as lower product prices dragged earnings, said Reuters.
The firm, a subsidiary of Saudi Basic Industries Corp (SABIC), made a net profit of 393.1 million riyals (USD104.9 million) in the three months to Dec. 31, down from 617.8 million riyals in the same period of 2014, it said in a bourse filing.
Three analysts polled by Reuters on average forecast Yansab would make a quarterly profit of 345.8 million riyals. It is the fourth straight quarter in which Yansab has reported falling profits. It had already announced it was trimming its dividend payout for the second half of 2015, having cut it in the first half of the year as well.
Yansab said lower average sales prices for all of its products eliminated the benefits from higher sales volumes, causing the profit drop. It did not elaborate further.
Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later.
Like many petrochemical firms in the kingdom, Yansab's earnings have been hit hard by falling product prices as they are closely tied to the price of oil, which is languishing at 12-year lows. Saudi producers have also benefited from subsidised energy and feedstock costs, so lower crude prices compress their profit margins.
As MRC informed earlier, Saudi Arabia's Yanbu National Petrochemical Co (Yansab) reported a 56.4 percent plunge in third-quarter net profit, worse than analysts' forecasts.
Yansab is the most recent SABIC, (Saudi Basic Industries Corp), affiliate in Saudi Arabia, and will be the largest Sabic petrochemical complex. It will have an annual capacity exceeding 4 million metric tons (MT) of petrochemical products including: 1.3 million MT (metric-tons) of ethylene; 400,000 MT of propylene; 900,000 MT of polyethylene; 400,000 MT of polypropylene; 700,000 MT of ethylene glycol; 250,000 MT of benzene, xylene and toluene, and 100,000 MT of butene-1 and butene-2.MRC