Riyadh – Mubasher: Saudi International Petrochemical Company’s (Sipchem) net profit dropped 76.4% year-on-year in the second quarter of 2016 to SAR 26 million, which was lower than Al Rajhi Capital’s estimates of SAR 91 million and consensus estimates of SAR 57 million.
“The company attributed the fall in net profit to increased interest expenses due to rising SAIBOR and increased bridge loans to support a maturing Sukuk,” according to a report released by Al Rajhi Capital on Sunday.
Gross and operating profits fell 43.1% and 56.5% year-on-year to SAR 163.6 million and SAR 99 million, respectively.
The company’s gross and operating profits came lower than Al Rajhi’s estimates, suggesting lower product prices and higher gas feedstock and energy prices, Al Rajhi reported.
“We had estimated 7.1% year-on-year revenue growth to SAR 1,078 million, led by production ramp-up from the recently started plants at International Polymers Company and Gulf Advanced Cable Insulation Company,” the report stated.
The company indicated that while sales volume was higher on an annual basis, sales volume was lower on a sequential basis, due to the maintenance shutdown at carbon monoxide plant, acetic acid plant and ethyl acetate plant.
Sipchem has not reported its Q2 revenues yet.
Al Rajhi Capital maintained its Neutral rating on Sipchem with a price target of SAR 12 per share.
