Tasnee Announced its Interim Financial Results for the 3rd Quarter and 1st 9 months ending on September 30, 2022. The company has recorded a decrease in its net profit during the third quarter, affected by the decrease in the average selling prices of products, and continuation of the increase in average prices of production inputs and logistical expenses.
Mr. Mutlaq Al-Morished, CEO of Tasnee, addressed that the company achieved a net profit of SR 623 million during the first 9 months of 2022 compared to a net profit of SR 1,018 million during the same period of 2021, indicating that the results was reasonable due to the sharp decline in the prices of most petrochemical products, especially polypropylene, and the contraction in demand for many petrochemical-based products during the third quarter due to geopolitical tensions and economic recession in most countries of the world, which led to a significant decrease in the profits of many petrochemical companies, hoping that the markets conditions would improve during the coming period, and that the global economy can recover from that recession as soon as possible, while avoiding the negative impact of the current and potential geopolitical tensions in Europe and the Pacific.
Mr. Fawaz Al-Fawaz, EVP Finance, stressed the company’s keenness to move forward in improving operational performance, increasing production rates and rationalizing expenses, as Tasnee achieved a net profit of SR 17 million for the third quarter 2022 compared to a net profit of SR 297 million during the second quarter 2022 and a net profit of SR 333 million for the third quarter of last year. The company’s net profit amounted to SR 623 million during the first 9 months of 2022, compared to a net profit of SR 1,018 million during the same period last year. The company also achieved an operating profit of SR 179 million during the third quarter of 2022.
Decrease in net profit during the current quarter compared to the second quarter of 2022 is primarily attributable to decrease in share of profit from investments in joint ventures and sales revenue for other products mainly resulting from lower average selling prices and sales volumes for certain products and lower other income, despite lower feedstock and logistics costs, decrease in general and admin expenses and zakat provision.
Decrease in net profit during the 1st 9 months of 2022 compared to the same period of 2021 is primarily attributable to decrease in share of profit from investments in joint ventures mainly resulting from lower average selling prices and sales volumes for certain Petrochemical products, in addition to higher feedstock and logistics costs and lower other income, despite increase in revenue for certain products driven by improved average selling prices and sales volumes for certain products and decrease in general and admin expenses.
On the other hand, the National Strategy for Industry has highlighted the importance of the titanium sponge factory in Yanbu, and stressed that the Kingdom has achieved important steps, in recent years, on its way of developing the value chain for titanium metals, as the Kingdom will rank fifth in the world in titanium sponge production once the factory production reaches its maximum capacity.