Tasnee Announces its Third Quarter Results for 2016
10/18/2016

 

 

 

 

On Tuesday October 18, Mutlaq Al-Morished, Tasnee CEO, hosted a press conference at the company’s Headquarters in Riyadh, where he announced the third quarter consolidated financial results for The National Industrialization Company (Tasnee), for the period ending September 30, 2016. Eng. Al-Morished explained that the company has sought to overcome the negative circumstances experienced during the last period, particularly in the first quarter of this year. Additionally, the company managed to achieve positive results in the third quarter and during the past nine months of 2016.
 
The company has also benefited from improvements in operational performance and the relative rises in key product prices and the increase in other income, in addition to the restructuring process which yielded positive results in the company’s overall performance, Tasnee is working hard to improve its’ performance, to develop the business and take advantage of a number of promising projects which are expected to positively impact the overall results of the company.  This includes the butanol project, located at the acrylic acid complex in Jubail Industrial City, which has now passed the commercial production stage.

Similarly, the technical repairs and testing for the trial start-up of the Smelter project in Jazan is still ongoing. It is expected that the startup will take place during the first half of 2017. Furthermore, the titanium sponge plant which is planned to produce 15.600 tons annually is progressing as planned, whilst the production is targeted to start during the second half of 2017.

 Tasnee is committed to develop its downstream business and provide jobs for Saudi Nationals in the Hail region. As part of this, projects are being developed over 100 thousand square meters within the plastics industry complex in Hail, owned by Rowad Plastics Company (owned 100% by Tasnee); the complex is one of the largest downstream complexes in Saudi for final products manufacturing.
 
Additionally, the National Titanium Dioxide Company (Cristal) owned 79%, by Tasnee, has entered into Syndicated Murabaha financing agreements for an aggregate amount of SAR 6,955 million, with the purpose of refinancing the company's obligations. This step will strengthen Cristal’s financial structure and will support the company's growth.
 
The project of the International Financial Reporting Standards Conversion (IFRS) is progressing well and according to plan. Tasnee has prepared an action plan for the transition and formed an internal implementation team and committee for this project. The first step is being implemented which involves the diagnosis and analysis of the transition requirements and will review the necessary adjustments in collaboration with one of the major accounting and auditing companies.
 
Tasnee registered a net profit of 122 million riyals for the third quarter ending September 30, 2016, compared with a net profit of 104 million Riyals for the second quarter of 2016, an increment of 18%, and a net loss of 296 million riyals for the same period of 2015.
 
Al-Morished attributed this quarter’s positive results, compared with the same quarter of 2015, to the increase in sales volumes, decrease in certain feedstock cost and increases in other income.  This is despite the lower than average sales prices for certain products and higher financial charges.
 
Moreover, the total value of sales for the third quarter of 2016 is 3.86 billion riyals, compared with 3.61 billion riyals for the same period of 2015, an increment of 7%. The company achieved operating profits during the third quarter of 2016 of 444.6 million riyals compared with operating loss of 47.8 million riyals for the same period in 2015.
 
As such, Tasnee has achieved a net profit of 131 million riyals during the past nine months of 2016, ending September 30, compared with a net loss of 737 million riyals for the same period of 2015.
 
The reported profit is attributable to the increase in sales volumes, decrease in certain feedstock cost and increase in other income, despite the higher financial charges. It should be noted that the impact of the negative fair value of hedging and derivative contracts which were entered into by a subsidiary with several local banks to hedge against foreign currency exposure risk, as well as an impairment charge to non-current assets, were recorded in the same period of last year.