Saudi Kayan records unprecedented 2021 profit; periodical maintenance unlikely in 2022: Chairman

Ahmed Al-Shaikh Chairman of Saudi Kayan

Saudi Kayan Petrochemical Co. (Saudi Kayan) posted a better-than-expected set of results for the fourth quarter of 2021 and unprecedented annual earnings, Chairman Ahmed Al-Shaikh told Argaam in a statement.

The strong performance was driven by the improved dependability and reliability of plants, which enabled Saudi Kayan to leverage on the recovery of global markets, pent-up demand for products and improved prices. Prices increased by almost 65% year-on-year (YoY).

These results are part of the company’s strategic transformation plan, which focused on enhancing the safety of operations, developing human capital, strategic growth, maximizing the products’ value-added, improving plant reliability, and financial efficiency to achieve shareholders’ and investors’ aspirations.

Al-Shaikh explained that the strategic transformation plan helped Saudi Kayan strengthen its financial efficiency and optimized cash deployment. The company repaid debts of SAR 10 billion in the last three years. It reduced total loans by nearly 43% from SAR 22.7 billion to SAR 13 billion. The company also slashed finance costs by 79% from 2019 to 2021.

Saudi Kayan successfully completed the periodical maintenance of its olefins plant during H1 2021.

The company continues to evaluate plants’ need for periodical maintenance, Al-Shaikh noted, adding that no scheduled maintenance or shutdowns are expected in 2022.

Elsewhere, he added that 80% of the company’s products depend on the high-cost butane feedstock, which remains a big challenge. Butane represents the major part of Saudi Kayan’s operating expenses, which makes it more vulnerable to global price fluctuations.

Saudi Kayan appreciates the Ministry of Energy’s support, reflected in the increased allocation of ethane, as this move aims to reduce dependence on butane and enhance the company’s ability to address market volatility and maintain profitability, he concluded.

The petrochemical producer swung to a net profit after Zakat and tax of SAR 2.392 billion in 2021, compared to a net loss of SAR 784.7 million a year earlier. Its fourth-quarter net profit after Zakat and tax more than doubled to SAR 452.6 million, Argaam reported.