Reasons for the decrease in net profit during the year 2018:
1- The group’s share in the profits of jointly managed projects (SCP, JCP) decreased in 2018, compared to the previous year 2017, as a result of the scheduled periodic maintenance work for the two projects that took place during the current year, in addition to the decrease in product prices during the fourth quarter of 2018. Low quantities sold.
2- The group sold the PCC to 31 million riyals in 2017.
Other income increased from the previous year due to the following reasons:
– The reason for the increase is due to the Petrochem subsidiary (Saudi Polymers Company) gaining compensation from the insurance company in the amount of 187 million riyals, and a reflection of the impact of this on the results of the group.
– To improve interest rates on the amounts invested in Islamic deposits and Murabaha.
Currently, there is nothing new about the merger between the two companies.
With regard to the Petrochem project, it is expected that the next scheduled periodic maintenance operations will take place during the year 2021 AD, as the project needs such maintenance every five years, and the maintenance process will continue for about two months. Note that the scheduled date may change depending on the performance of the manufacturing units. This may expose the project to an unscheduled halt as a result of emergency breakdowns or because of factors beyond the control of the company, God forbid.
With regard to jointly managed projects SCP and JCP, the company is keen to standardize the periodic maintenance process between them as much as possible, but the development of the catalyst governs the process in terms of the dates of its change, especially if it was consumed during a shorter period.
There is an improvement in the company’s product price levels at the beginning of 2019 and it is difficult to predict what may happen in the future.
The company relies on its business on many external parties, such as electricity and cooling water, but one of the most important factors that may affect the level of production capacity is the supply of feedstock (gas) from Aramco, which is the only source of gas.
In the event that additional values are available from Aramco, as well as an investment benefit to the company’s shareholders, the company will study all available investment opportunities
The Group’s income statement is a consolidated income statement that includes the items of the group’s income statement and the items of the Petrochem Income Statement, and therefore the return on non-controlling interests is the non-controlling partner’s shares in Petrochem Ventures. Note that the return on the company’s shareholders does not have to be less than the non-controlling interests, for example in 2017, when the return on the shareholders was higher than the non-controlling interests.