Tasnee Recognizes Net Profit of SR 666 million during 2022

Tasnee has announced its 2022 consolidated and audited financial results during the fourth quarter period and the entire fiscal year ending on December 31, 2022. The company’s net profit during the year recorded 51% decrease compared to the previous year.

Mr. Mutlaq Al-Morished, CEO of Tasnee, addressed that the company achieved a net profits of SR 666 million for the period ending on December 31, 2022, compared to net profits of SR 1,356 million for 2021 indicating that the decline in profits during the period due to the slowdown in the Chinese economy and the global economy in general and the entry of the European economy into a state of economic recession as a result of geopolitical turmoil in Europe and the Pacific Ocean in addition to the repercussions of the Russian-Ukrainian war, which in turn led to a contraction in demand and a decrease in the average selling prices of most petrochemical products with the continuation of the increase in the average prices of feedstock and logistical costs. Al-Morished hoped that the economic conditions would improve during 2023, so that the global economy could recover, and witness increasing demand rates and enhance the selling prices.

Mr. Fawaz Al Fawaz, EVP - Finance, indicated that the company will continue its plans to rationalize expenses, improve operational performance and increase production rates. He added that Tasnee achieved a net profit of SR 43 million for the fourth quarter of 2022, compared to a net profit of SR 17 million during the third quarter of 2022, and a net profit of SR 339 million riyals for the fourth quarter of last year. The company’s net profit amounted to SR 666 million during the whole year 2022, compared to a net profit of SR 1,356 million during the previous year.

Decrease in net profit during 2022 compared to the previous year is primarily attributable to decrease in share of profit from investments in joint ventures and associates mainly due to lower average selling prices and sales volumes for petrochemical products, higher feedstock costs, logistics expenses, financial charges and impairment provision of non-financial assets related to one of the Group›s subsidiaries (Advanced Metal Industries Cluster Co.), despite higher revenue driven by improved average selling prices and sales volumes for certain products, partial reversal of impairment provisions for financial assets, increase in finance and other income and decrease in general and administrative expenses and zakat provisions.

On the other hand, Technology and Innovation Center (T&I) continued its contribution to technical support, business development, improving the operational performance of plants, developing a range of new products.

A group of the company’s experts, in cooperation with international consultants, worked on developing a roadmap to provide the state-of-the-art technologies to reduce carbon emissions and reach carbon neutrality and zero carbon emissions by 2060 through hydrogen-based fueling and solar energy.

The year 2022 witnessed the start of marketing quantities of the Titanium Sponge from the company’s plant in Yanbu, benefiting from the notable recovery in titanium markets, specifically the Aerospace market, which confirms the positive standing of the product that allows an increase in production rates to meet the expected demand, especially after the completion of product qualification with major international airlines’ suppliers. The year also witnessed the operation of the first furnace of the titanium smelter in Jazan which reached about 65% of its design capacity. It is expected that the work team will be able to overcome the challenges and examine the proper way to move forward in repairing the second furnace in preparation for its operation in the upcoming period.

Tasnee began its journey in the digital transformation field in all its business units. It also devoted efforts to achieve excellence in occupational safety, increase the reliability of production units, and create an attractive work environment. Moreover, the company won the British International Safety Award for the 2nd year in a row, and the «Excellence in Procurement Transformation» Award. The company also advanced 27 positions in the list of Forbes Middle East magazine of the 100 most powerful companies in the Middle East for 2022.