Advanced records 'satisfactory’ performance in Q1 2020 despite challenges: Chairman

Advanced Petrochemical Co.'s Q1 2020 financials are considered "satisfactory" given the current market challenges, Al Arabiya TV reported, citing Chairman, Khalifa Al-Melhem.

"Advanced's Q1 performance was impacted by seasonal factors; SK Advanced's losses were driven by one-month scheduled maintenance and higher feedstock prices in winter, which squeezed profit margins," Al-Melhem said.

Lower polypropylene sales volumes in Q1 2020 were attributed to a shortage in propylene outsourced from Saudi Aramco Total Refinery & Petrochemicals Co. (Satorp), as its refinery in Jubail was subject to maintenance works in Q1, but the unit operations resumed in Q2 2020.

"We are thoroughly working on mitigating the impact of the current risks," Al-Melhem noted, adding that prices reached their lowest historical level hit during the global crunch in 2008 and 2009.

"Prices are not expected to improve, rather, they will be pressured further in Q2, on lower demand, decreased oil prices, and lower naphtha prices, which will likely weigh on polypropylene prices," Al-Melhem indicated.

"China started to see improved demand as well as prices; lower feedstock prices help us make more profit margins," Al-Melhem stated, confirming that the company is able to overcome the logistics challenges.

Advanced reported SAR 104 million earnings in Q1 2020, down by 36% year-on-year (YoY), Argaam reported.