Sipchem’s Q3 2022 profit hit by lower prices, petrochemical market still powerful: CEO

Sahara International Petrochemical Co.’s (Sipchem) CEO Abdullah Al-Saadoon

Abdullah Al-Saadoon, CEO of Sahara International Petrochemical Co. (Sipchem), said the main reason for the petrochemical producer's profit drop in Q3 2022 was the reduced product prices.

In a statement to Al Arabiya TV, Al-Saadoon explained that the decline in prices ranged from 15% to 45%. He noted that production inputs had increased, which impacted profitability.

The CEO expected satisfactory financial results in 2022, indicating that products prices in the fourth quarter of the year will not be worse than Q3, and may witness a slight improvement.

The petrochemical producer has a diversified product portfolio, including basic, intermediate and polymer petrochemicals. It is, moreover, located in about 100 countries around the world, with above 600 clients, he added.

Sipchem also reported a decrease of up to 20% in demand in Europe. This is because production levels there were affected by the high cost of energy, which allowed the petrochemical producer to compensate for the decline in demand.

The petrochemical industry market fundamentals are still strong. The current situation is just transient and temporary, Al-Saadoon concluded.

Sipchem's profit rose by 37% to SAR 3.116 billion by the end of the first nine months of 2022, compared to SAR 2.270 billion a year earlier. In Q3 2022, the petrochemical producer posted a 25% year-on-year (YoY) drop in net profit to SAR 774.4 million, according to Argaam’s data.