Sahara International Petrochemical Company (2310) Q2 2024 earnings summary

Executive summary

• Q2 2024 showed resilience in a challenging market, with a focus on operational excellence, reliability, and safety, while maximizing shareholder returns through sustainable dividends.

• H1 2024 revenue was SAR 3.69 billion, down from SAR 3.79 billion in H1 2023, mainly due to lower sales prices and higher feedstock costs.

• Net profit attributable to equity holders for H1 2024 was SAR 303 million, a significant decrease from SAR 783.3 million in H1 2023.

• Management expects the decline in sales prices to be short-term, with improvement anticipated over the next twelve months.

Financial highlights

• Q2 2024 revenue reached SAR 1,770 million, with EBITDA at SAR 348 million and net profit at SAR 122 million.

• Free cash flow generated was SAR 638 million, supporting a strong balance sheet.

• Basic EPS for H1 2024 was SAR 0.42, compared to SAR 1.08 in H1 2023.

• Interim dividends of SAR 362.6 million (SAR 0.5/share) were approved for H1 2024, lower than SAR 906.4 million (SAR 1.25/share) in H1 2023.

• EBITDA performance impacted by periodic maintenance and higher feedstock prices.

Outlook and guidance

• Market recovery remains slow due to lack of sustained demand; low margins expected to drive capacity rationalization.

• Management anticipates sales prices to recover in the next twelve months, viewing the current decline as temporary.

• Persistent Red Sea tensions continue to disrupt global supply chains.

• No impairment losses were identified after management's impairment assessment and sensitivity analysis.

• Management remains optimistic about future prospects, with strategic growth projects underway.