Sahara International Petrochemical Company Sipchem International achieved an increase in profits by 162.16% in the first quarter of 2022, to reach about 1.079 billion riyals after zakat and tax, compared to about 411.5 million riyals in the same quarter of 2021.
According to Arab Net, Sipchem's global net profit declined by 18.33% compared to a net profit of about 1.32 billion riyals in the fourth quarter of 2021. And that the increase in profits in the first quarter of 2022, on an annual basis, is due to the increase in revenues. As a result of the increase in selling prices for all the company’s products, which contributed to the increase in profit margins despite the increase in the prices of raw materials such as butane, ethanol, ethylene and propane, and the decrease in sales quantities as a result of stopping the Al-Waha Petrochemical Company plant during the first quarter of 2022 to carry out scheduled periodic maintenance work.
It is also due to the decrease in financing costs as a result of the early repayment of sukuk and loans when comparing the first quarter of 2022, with the same quarter of the previous year.
The decrease in other expenses during the first quarter of 2022 also contributed to the increase in profits. In the same quarter of the previous year, a decrease in the value of two cash-generating units was recorded, amounting to 260 million riyals, which relates to a polybutylene terephthalate plant. And the factory of the Gulf Company for Advanced Cable Insulators, in addition to the high share of profits from investment in a joint venture and associate companies.
Cash flows from operating activities during the first quarter of 2022, compared to the same quarter of the previous year, grew by 125% to reach 1.7 billion riyals.
In a separate statement, Sipchem International said that the shareholders approved, during the extraordinary general assembly meeting, the company's purchase of a number of its shares, with a maximum of 66,347,931 shares, and keeping them as treasury shares.
This is because the Board of Directors considers that the share price in the market is less than its fair value, and the purchase will be financed from the company's own resources, and authorizing the Board of Directors to complete the purchase process within a maximum period of 12 months from the date of the extraordinary general assembly's decision, The company will keep the purchased shares for a maximum period of 5 years from the date of approval of the extraordinary general assembly, and after the expiry of this period, the company will follow the procedures and controls stipulated in the relevant laws and regulations.
