SAR 197 Millions TASNEE Net Profits in the 1st Half of 2017

​Tasnee announced its second quarter consolidated financial results for the period ending June 30, and the first half of 2017, at a press conference hosted by Tasnee's CEO, Eng. Mutlaq Al-Morished. The Conference was held on Wednesday, July 26, at the company's headquarters in Riyadh.

Eng. Mutlaq explained that Tasnee’s performance during this transition period is outstanding, and its rapid response to the restructuring process shows the strength of our employeesTasnee, as one of the largest companies in the Kingdom, is capable of overcoming difficulties, increasing investor confidence in the company's ability to overcome crisis and turn challenges into opportunities for sustainable growth.

Tasnee is continuing to attain positive outcomes resulting from the restructuring program which resulted in performance improvements, increased production and improved sales, as well as improvements from cost optimization initiatives that have covered administrative and marketing expenses. Additionally, the Tasnee Excellence Program supported the overall performance improvements, reduced expenses and increased operation rates.

Tasnee is also working on completing a series of projects, such as the titanium sponge project in Yanbu, the commissioning of this is expected to be during the second half of this year. There is also the titanium smelter plant which will produce raw materials for titanium industries; the commissioning of the smelter is expected to take place during the first half of 2018 and the startup of the commercial operation will follow during the second half of 2018. This is in addition to the downstream projects within Tasnee’s downstream complex for plastic industries in Hail, for which the commissioning phase in most of the production lines has already started.  This project will provide more job opportunities and more value to Tasnee’s manufacturing operations.

On the subject matter of the definitive agreement to acquire the company's Titanium Dioxide business by Tronox Limited, in return for $1.67bn in cash and a 24% stake in the new entity, Eng. Mutlaq explained that thetransaction procedures are on track in preparation for completion. He also stressed the importance and significance of the deal as the new company will be the largest titanium dioxide company in the world, according to the volume of sales of titanium chemical products and others.  It will be the most diverse and integrated titanium dioxide company, giving it greater capabilities to meet customers’ needs.

The deal will also allow Tasnee to re-focus on petrochemical activity and seek new strategic investment opportunities. Additionally, the transaction proceeds will improve Tasnee finances and significantly contribute to reducing the loans ratio compared to profit before depreciation, financing costs and taxes which will be incurred after paying all Cristal bank debts in Saudi Arabia.

Tasnee registered a consolidated net profit of 94 million riyals for the second quarter ending June 30, 2017, compared with a net profit of 103 million Riyals for the first quarter of 2017, a decrease of 9%.  This is compared to a net profit of 88 million riyals for the same period of 2015, an increase of 7%.

Eng. Mutlaq attributed the positive results compared to the same quarter of the previous year to the increase in average selling prices of some products and increments in other income, despite the increases in Zakat provision, financing costs, marketing expenses, income tax and the decrease in Tasnee’s share of profit in other companies.

Furthermore, the total revenue for the first half of 2017 ending June 30, is 5.15 billion riyals, compared with 4.25 billion riyals for the same period of 2016, an increase of 21%. The company achieved operating profits during the second quarter of 327 million riyals compared with operational net profit of 165 million riyals for the same period of 2016.