Sahara International Petrochemical Company (2310) Q3 2024 earnings summary

Executive summary

• Advanced growth strategy with EPC contracts for Al Waha and IPC plant expansions.

• Maintained resilience and capital discipline amid challenging market conditions.

• Revenue for the nine months ended 30 September 2024 was SAR 5.32 billion, down from SAR 5.58 billion year-over-year, reflecting lower selling prices and higher feedstock costs.

• Net profit attributable to equity holders for the nine months was SAR 406.2 million, a significant decrease from SAR 1.02 billion in the prior year period.

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

Financial highlights

• Q3 2024 revenue SAR 1,627 million, down 8% quarter-over-quarter due to a 2% reduction in product prices.

• EBITDA SAR 376 million, with a margin of 23.1%; 8% increase quarter-over-quarter driven by higher sales volumes and lower feedstock costs.

• Net income SAR 103 million, down 15% quarter-over-quarter, reflecting absence of prior quarter's SAR 53 million insurance claim.

• Earnings per share for the nine months was SAR 0.56 (basic), down from SAR 1.40 year-over-year.

• Interim dividends of SAR 362.6 million (SAR 0.5 per share) were paid in July 2024.

Outlook and guidance

• Interest rate cuts and fiscal stimulus in China expected to positively impact the economy.

• Capacity rationalization and improved demand anticipated.

• Management believes the adverse pricing environment is temporary and expects improvement in product prices within the next twelve months.

• Persistent logistical challenges and geopolitical uncertainty continue to affect market sentiment.