Sipchem profits jump 52% to SR 1.26 bln in 2Q

Sahara International Petrochemical Company (Sipchem) announced that its profits after zakat and tax jumped 52.2% to SR 1.26 billion in the second quarter of 2022 compared to SR 829.6 million during the same period of 2021.

This came after Sipchem announcement on Tuesday of the preliminary financial results for the period ending on 30.06.2022 (six months).

The company’s operational profits rose 20.14% to SR 1.36 billion in the 2^nd quarter of the current year from SR 1.13 billion in the same period of the previous year.

Gross Profits of Sipchem surged 13.6% to SR 1.6 billion in the second quarter of this year from SR 1.4 billion a year ago, while the profit per share rose to SR 3.22 from SR 1.71.

Net profit increased during current quarter compared to same quarter of last year by 52.2% which is due mainly to:

– Increase in Revenue as a result of the increase in selling prices for most of company’s products which contributed to increase in Gross Profit.

– Decrease in finance costs due to reduction of loans when compared the current quarter with same quarter of last year.

– In addition to the increase in company share of profit from joint venture and associates.

The reason for the increase in Net profit during current quarter compared to previous quarter of current year by 17.1% is due to the increase in Revenue as a result of the increase in Sales volume in spite of the decrease in selling prices of some of company products in addition to the increase in company share of profit from joint venture and associates.

Net profit increased during current period compared to same period of last year by 88.7% which is due mainly to:

– Increase in Revenue as a result of the increase in selling prices for company’s products which contributed to increase in Gross Profit in spite of the increase in feedstock prices of Butane, Ethanol, Ethylene and Propane.

– Decrease in finance costs due to reduction of loans.

– During the same period of last year, an impairment loss of SR 260 million was recorded related to cash generating unit of PBT and GACI plants when compared the current period with same period of last year.

– Increase in company share of profit from joint venture and associates.

Additional Information:

1. The gearing ratio decreased during current period from 34% in 2021 to 26% as end of current period supported by repayments of the loans where loans decreased by SR 1,053 million during current period as compared to end of 2021.
2. The Company announced cash dividends distributions for the first half period of 2022 amounting to SR 1.27 billion (i.e., SR 1.75 per share) which represents 133% higher than what was distributed as half year dividends during same period of last year.
3. Plants reliability and operating efficiency have been improved during current quarter after completion of the scheduled maintenance as previously announced.