Advanced Petrochemical expects to sell entire output in Q2 2020: Chairman

Advanced Petrochemical Co. expects to sell its entire output in Q2 2020 at slightly lower prices, Chairman Khalifa Al Mulhim told Argaam in an exclusive.

"Markets will see high or no demand in Q2 2020. Advanced will tap markets where it can sell products at suitable prices," Al Mulhim indicated.

The COVID-19 outbreak weighed on the supply chain and logistics activities, however, Advanced is working to overcome these challenges, Al Mulhim added.

Advanced Q1 2020 performance was impacted by a decline in the propylene outsourced from Saudi Aramco Total Refinery & Petrochemicals Co. (SATORP), due to periodical maintenance. This weighed on polypropylene sales volumes and product prices.

Also, feedstock average prices ranged between $450-500 in the three-month period.

"SK Advanced losses were driven by a one-month scheduled maintenance and higher propane prices in winter, which squeezed profit margins," Al Mulhim said, expecting improved performance in the next three quarters.

For Advanced's propane dehydrogenation (PDH) and polypropylene (PP) complex in Jubail, Al Mulhim said the project planning is on track and it is still in the design phase.

For the company's plans to boost its equity in National Industrialization Co. (Tasnee), Al Mulhim said, “Raising stake in Tasnee was a special opportunity, being far below the book value. Advanced also aimed to diversify its business portfolio. Advanced is not planning to slash or raise its equity in Tasnee”.

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