Advanced chairman says product prices improve, expects better profit from S. Korea’s affiliate in H2 2020

Advanced Petrochemical Co. expects polypropylene prices to rise above $900 per ton, after sinking below $800 per ton in Q1 2020, driven by improved prices and demand from China and South East Asia, Chairman Khalifa Al Mulhem told Argaam in an exclusive.

“Advanced posted a lower profit for H1 2020, as polypropylene prices decreased by $230 per ton, compared to average product prices in H1 2019,” Al Mulhem said.

Moreover, the one-month scheduled maintenance of SK Advanced widened losses. However, the plant resumed production in Q2 2020 and is expected to generate better profit in the third and fourth quarters of the year.

Production halt at SK Advanced impacted the company’s financial results. The plant has resumed solid production at low cost, but profit margins in South Korea are low when compared to those in the Kingdom.

The propane dehydrogenation and polypropylene complex in Jubail is on track as scheduled, Al-Mulhem said, expecting production to begin by the end of 2023 or in early 2024.

Meanwhile, Al Mulhem ruled out any acquisition plan at present.

Advanced reported a net profit after Zakat and tax of SAR 259 million in H1 2020, compared to SAR 354.2 million a year earlier, Argaam reported.