SAR 757M Tasnee Profits in the 1st Half of 2018

Tasnee announced its consolidated financial results for the second quarter and the first half of 2018, ending June 30, 2018, at a press conference hosted by Tasnee’s Chief Executive Officer, Eng. Mutlaq Al-Morished and Chief Financial Officer, Mr. Fawaz Al-Fawaz. The conference was held on Monday, July 23, 2018, at the company's headquarters in Riyadh.
Al-Morished discussed the continuous growth and profitability Tasnee has achieved in the first half of the year, in addition to the excellent progress in operational performance which will lead to sustainable positive financial results and reinforce the shareholders’ trust in the company. He also commended all of Tasnee’s employees for their capabilities as they are the key pillars for the company's growth and development.
Mr. Fawaz Al-Fawaz, Tasnee’s CFO, stated that Tasnee is continuing to realize positive results due to prices increase in many of Tasnee products. Furthermore, Tasnee’s consolidated sales in the 2nd quarter 2018 increased by 12%, amounting to SR 2.99 billion, compared to SR 2.67 billion in Q2 2017. The company also increased its net profit to SR 395.8 million, compared to SR 93.6 million in Q2 2017, and compared to SR 361.4 million in Q1 2018. The operating profit in the 1st half of 2018 grew up to SR 1478.1 million compared to SR 667.7 million for the same period last year. Moreover, the company registered a net profit of SR 757.2 million in the first half of 2018, compared to SR 196.9 million in the first half of 2017.
These positive results are attributed to the increase in average selling price of TiO2 products, and the reduction in the financing costs, in addition to the increase in Tasnee shares in other companies and joint ventures’ profit as a result of increase in average selling prices in most of petrochemical products. These results were realized despite the increase in general, administrative and marketing expenses, as well as Zakat and tax allocation.
On the subject matter of the definitive agreement with Tronox Limited to acquire Tasnee’s Titanium Dioxide business, the European Union’s conditional acceptance has been received. Both companies are now working on obtaining the remaining regulatory approval from the US. In addition, the deal will have the option of an automatic extension every three months until 31 March 2019, whilst keeping the main terms and conditions unchanged.
Furthermore, the Advanced Metal Industries Cluster (AMIC), which is jointly owned by Tasnee and Cristal, had signed a conditional agreement with Tronox to acquire 90% of the Titanium smelter in Jazan, in addition to a technical services agreement where Tronox will be providing technical support to AMIC for the smelter startup according to the industry standards and procedures. Consequently, the combination of the two company’s experiences will drive the project to success. The trial startup of furnace 1 which will be closely followed by production is expected during the second half of 2018. Furnace 2 startup is expected during the first half of 2019.
Similarly, the titanium sponge project in Yanbu is expected to commence the production stage during the second half of 2018, once the construction of the TiCl4 unit has been finalized.
Moreover, many of the Hail downstream projects are already in the production stage, these projects increase the company contribution in maximizing the added value of downstream industry and providing more career opportunities for Saudi talents. They also support the Saudi 2030 vision which aims at increasing the non-oil industries in the gross domestic products.