Saudi’s Tasnee swings to Q3 net profit on volumes, feedstock costs
Lower feedstock costs, higher sales drive earnings; CEO says in talks to refinance $1 bln loan
Saudi Arabia’s National Industrialization Co (Tasnee) made a profit for the second consecutive quarter as a reduction in feedstock costs and higher sales offset the sustained impact of depressed product
Petrochemical firms in the kingdom have been struggling for the last two years as lower oil prices have weighed on product prices in their industry. Tasnee posted losses in every quarter in 2015 as well as the first three months of this year.
A concerted restructuring effort by the company, which focused on improving efficiencies and cost cutting which resulted in it shedding more than 25 percent of its global workforce, had already helped Tasnee return to profit in the second quarter.
The improvement extended into the third quarter as Tasnee recorded a profit of 122.2 million riyals ($32.6 million), according to a bourse filing.
Shares in Tasnee, which has interests in petrochemicals, metals and chemicals and is one of the world’s largest producers of titanium dioxide through its Cristal subsidiary, ended Tuesday down 10 percent despite the profit.
Chief Executive Mutlaq al-Morished denied a Bloomberg report that the company had stopped making payments on a $1 billion loan.
In an interview with Al Arabiya television he said Tasnee had begun informal talks with local banks to refinance the loan at better terms, as it had done with a 7 billion riyal facility for Cristal earlier this year, with negotiations set to last at least six months.