Sipchem Profits Jump 1942% at End of 2021 to SR3.59 bln

Sahara International Petrochemical Company (Sipchem) net profit after zakat and tax jumped to SR3.59 billion during the year 2021, compared to SR176 million during the year before last, at a rate of 1942%.

This came after Sipchem announcement on Sunday about the estimated annual financial results for the period ending on 31.12.2021 (12 months).

The operational profit during the current period amounted to SR4.46 billion, compared to SR360 million during the same period last year, with a growth of 1141%.

The gross profit during the current period amounted to SR5.58 billion, compared to SR1.2 billion during the same period last year, an increase of 376%.

Profits per share during the current period amounted to SR4.94, compared to SR0.24 during the same period last year.

The reason of the increase (decrease) in the net profit during the current year compared to the last year is:

The net profit increased during the year 2021 by 1,942% compared to 2020 mainly due to the increase in revenues and operating profits as a result of the increase in prices for all products in spite of the increase in feedstock prices of Butane, Ethanol, Ethylene and Propane. In addition, the company share of profit / (loss) from joint venture and associates increased and reached profit of SR530.8 Million for year 2021 compared to a loss of SR33.8 Million for the year 2020.

The net profit above increased in spite of the company incurred an impairment loss of SR260 Million related to cash generating unit of PBT plant of SR160 Million and GACI plant of SR100 Million which was recorded in 2021 results as previously announced.

Additional Information:

1. The cash flows from Operating Activities increased during the year 2021 compared to the year 2020 by 204% and reached SR4.9 Billion.

2. The company managed to reduce the Long-Term Loans by end of the year 2021 by SR2.1 Billion compared to end of the year 2020. As a result, the gearing ratio decreased from 54% in 2020 to 34% in 2021.

3. In continuation of company strategic decisions that targets improving profitability and operations efficiency which includes during 2020 the mothball the Polybutylene Terephthalate (PBT) plant owned by Sipchem Chemical Company and Ethylene Vinyl Acetate (EVA) Film which is owned by Saudi Specialized Products Company, during the year 2021 the plant of Gulf Advanced Cable Insulation Company (GACI) was also mothballed which was reflected positively on the results of the company.

4. The company completed successfully and exceeded during the year 2021 the target synergy value resulted from the merger and ahead of the schedule as previously announced.

5. The company distributed during the year 2021 a total dividend of SR1,636 Million equivalent to SR2.25 per share which is considered the highest in the company history.

6. The net profit for the year 2021 is considered the highest reported since incorporation of the company.