SAR 388 Millions TASNEE Net Profits in the 1st 9 Months of 2017

Tasnee announced its third quarter consolidated financial results for the third quarter ending September 30, and the first nine months of 2017. The conference was held on Wednesday, October 25, at the company’s headquarters in Riyadh, hosted by Tasnee’s CEO, Eng. Mutlaq Al-Morished and Mr. Fawaz AlFawaz, Tasnee CFO. 

Tasnee continues to grow its business and achieve more positive results through its excellence program while benefiting from its restructuring program which has enabled the company to improve its operational performance, increase the produced and sold quantities, optimize administrative and general expenses.

Eng. Mutlaq discussed the company’s ongoing projects including the completion of the titanium sponge project in Yanbu. The plant commissioning is expected to be during the fourth quarter 2017. Additionally, the commissioning of the titanium smelter project in Jazan is expected to be during the second half of 2018, the smelter will provide raw materials for the titanium industries.

The commissioning of most production lines in the downstream project within the Tasnee complex of plastic industries in Hail was during the third quarter of 2017. The complex will nationalize many of international advanced technologies, adding a new and distinctive range of final products to Tasnee portfolio, such as plastic films used in green houses, agriculture, plastic boxes and palettes; plastic pipes used in irrigation and drainage systems.

On the other hand, the transaction processes of Tronox acquisition of Cristal’s Titanium Dioxide business are on track in preparation for completion. Additionally, the shareholders of Tronox approved the issuance of shares in connection with the acquisition process, and subject to receipt of regulatory approvals in the European Union and the United States, and the regulatory requirements in Saudi Arabia.

In return, Cristal will receive $1.67bn in cash and a 24% stake in the new entity. The new company will be the largest titanium dioxide company in the world, according to the volume of sales of titanium products, and 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.

Tasnee registered a consolidated net profit of 192 million riyals for the third quarter ending September 30, 2017, compared with a net profit of 94 million Riyals for the second quarter of 2017, an increment of 105%.  This is compared to a net profit of 108 million riyals for the same period of 2016, an increase of 78%. The net profit for the nine months of 2017 is 388 million riyals compared to 92 million riyals for the same period of 2016, an increase of 322%.

Mr. Fawaz attributed the positive results to the increase in average selling prices of TiO2 and increments in other income, despite the increases in selling and financing costs, marketing expenses, and income tax.

Furthermore, the total value of sales for the nine months of 2017 ending September 30, is 7.9 billion riyals, compared with 6.3 billion riyals for the same period of 2016, an increase of 25%. The company achieved operating profits of 1.2 billion riyals compared with operational net profit of 446 million riyals for the same period of 2016.