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Saudi Kayan swings to Q2 2021 net profit on lower feedstock costs

August 02/2021

MOSCOW (MRC) -- Saudi Kayan Petrochemical Co., an affiliate of Saudi Basic Industries Corp (SABIC), swung to a net profit in the second quarter, ending a run of five straight quarterly losses, benefiting from low feedstock costs, reported Reuters.

The company made a net profit of 91.02 million riyals (USD24.27 million) in the three months to June 30, it said in a bourse statement. This compares with a loss of 13.42 million riyals in the same period of 2015.

The average estimate of three analysts polled by Reuters was for a quarterly loss of 184.2 million riyals.

Like many petrochemical firms in the kingdom, Kayans earnings have been hit hard by falling product prices as they are closely tied to the price of oil. In addition to the feedstock costs, Kayan cited higher sales quantities and reduced marketing fees from SABIC for its return to profit.

It restarted April 10 a plant that produces ethylene glycol and oxide ethylene which was offline since the start of March for scheduled maintenance. The financial impact of the shutdown was estimated to be 96 million riyals, split across its first- and second-quarter results.

As MRC wrote previously, Saudi Kayan conducted a 21-day scheduled maintenance at its ethylene glycol (EG) and ethylene oxide (EO) facilities at Jubail, Saudi Arabia, starting on 1 February, 2020. The company said that some of its other facilities that rely on EG and EO feedstocks would also undergo periodic maintenance and improvements.

EO is one of the main feedstocks for the production of purified terephthalic acid (PTA), which is used to produce polyethylene terephthalate (PET). And PET is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

Saudi Kayan operates a MEG plant in Jubai, Saudi Arabia, which has a production capacity of 566,000 mt/year.

As per MRC's ScanPlast report, May estimated PET consumption in Russia increased by 15% year on year to 85,850 tonnes. Russia' overall estimated PET consumption totalled 349,940 tonnes in January-May 2021, up by 22% year on year.

Saudi Kayan Petrochemical Company is a manufacturing affiliate of the Saudi Basic Industries Corporation (Sabic).
Author:Margaret Volkova
Tags:monoethylene glycol (MEG), PET-granulate, ethylene, packaging, Sabic, Saudi Kayan, Saudi Arabia.
Category:General News
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