Saudi Kayan says profitability sensitive to end product prices, cuts financing costs by 40% in 2020

Saudi Kayan Petrochemical Co.’s financial results for the third quarter of 2020, which beat most forecasts, were boosted by the company’s outstanding performance, which helped achieve the interim goals of its strategy, chairman Omar Al Amoudi told Argaam in an exclusive.

The company’s profitability is sensitive to global product prices and market fluctuations. Moreover, the global economic challenges and slow demand faced by the petrochemical sector this year weighed on the volume of trade exchange and global product prices.

Accordingly, the company’s average product prices declined by 17% when compared to 2019, impacting the profit margins, the top official explained.

The petrochemical producer implemented a comprehensive transformation plan over the past four years, which enabled it to achieve unprecedented breakthroughs and a qualitative leap in all operations. Saudi Kayan’s production and sales increased by 35% and 44%, respectively.

In addition, the reliability of plants saw a remarkable improvement of 54%, while general and administrative expenses were cut by 23%, Al Amoudi pointed out.

The company was also committed to energy efficiency, to achieve the objectives of the National Energy Efficiency Program, as its energy consumption exceeded the efficiency standard by 6% in 2015. However, Saudi Kayan’s consumption rate was 8% lower than the energy efficiency standard in 2019.

He added that the success of the transformation plan helped the company save the necessary cash and reschedule its loans to reduce the related costs. Accordingly, financing costs were reduced by nearly 40% in 2020.

Saudi Kayan’s board of directors and executive management will spare no effort to achieve the company’s strategic goals and fulfill shareholders’ expectations, Al Amoudi concluded.