Advanced to unveil expansion projects soon, says chairman

Advanced Petrochemical Co. is studying various expansion projects and should be announced soon following the board of directors’ approval, chairman Khalifa Al Mulhim told CNBC Arabia on Monday.

“The company will not only focus on local expansions to strengthen its industrial position in the Kingdom, but also eye overseas markets,” Al Mulhim said.

He also noted that Advanced has a very strong financial position that will help it to continue expansions, thanks to its solid cash surplus and strong solvency. 

The petrochemical producer aims to reduce leverage, given its ability to finance planned expansions from its own cash resources. 

“Advanced has good reputation in commercial banks and the Saudi Industrial Development Fund (SIDF),” AlMulhim added, noting that “the fund is ready to finance any expansions for the company.”

Read: Advanced plans capital hike through bonus shares

Commenting on Q2 2019 financial results, Al Mulhim said stability of product prices usually supports positive results. 

“However, the results are affected by seasonal factors, as feedstock prices change from summer to winter due to heating purposes and oil prices,” he stated.

“Meanwhile, products are linked to global prices,” he said, adding that “growing demand means higher prices.”

On June 23, Advanced got approval from the Capital Market Authority (CMA) to raise its capital to SAR 2.16 billion through distributing one bonus share for every ten outstanding shares, Argaam reported. 

The company also reported a net profit after zakat and tax of SAR 162 million for the first quarter of 2019, a 66.07 percent year-on-year jump on a 38.9 percent rise in sales volumes.