Saudi Kayan profits decline 81% to SR150 mln in 2Q

Saudi Kayan Petrochemical Co. announced that its profits after zakat and tax declined 80.7% to SR 150.13 million in the second quarter of 2022 compared to SR 780.9 million during the same period of 2021.

This came after Saudi Kayan announcement on Wednesday of the preliminary financial results for the period ending on 30.06.2022 (six months).

The company’s operational profits fell 72.6% to SR 246.2 million in the 2^nd quarter of the current year from SR 901.2 million in the same period of the previous year.

Gross Profits of Saudi Kayan dipped 58.4% to SR 435.4 million in the second quarter of this year from SR 1048.7 million a year ago, while the profit per share fell to SR 0.24 from SR 0.85.

The reason for the decrease in the net profit is due to an increase in the average cost of feedstock and decrease in the average selling prices of product, despite of increase in the quantities produced and sold.

The reason for the decrease in the net profit is due to the increase in the average cost of feedstock and in general and administrative expenses in addition to increase in financing costs, despite the increase in the average selling prices of products and the increase in the quantities produced and sold.

The reason for the decrease in the net profit is due to an increase in the average cost of feedstock and a decrease in the average selling prices of products despite the increase in the quantities produced and sold.

Additional Information:

Referring to what was previously announced in Saudi Stock Exchange (Tadawul) website on 27/01/2022. It’s part of the periodic follow-up to evaluate the Company’s investments and adapting its accounting treatments to adequately reflect the relevant partners’ agreement, we would like to note that the Company has re-evaluated some significant management judgments and estimates related to determining whether the Company has control, joint control or significant influence in its investment in Saudi Butanol Company Limited.

Whereas Saudi Kayan Company owns 33.33% of the Saudi Butanol Company’s shares capital, the re-evaluation thereof resulted in a change in the accounting treatment and classification of this investment as a “joint operation” in accordance with IFRS 11 “Joint Arrangements” instead of categorizing it as an investment in an “associate company” in accordance with International Accounting Standard IAS No. 28 “Investments in Associates and Joint Ventures”. This change in the accounting treatment was applied during the fourth quarter of the year 2021 with a retroactive effect.

This change did not have any financial impact on the opening equity balances, as well as the company’s net results in the previous announced years / periods. Some of the financial effects were confined to the opening balances of some items in the statement of financial position and the presentation of the income statement for the year 2021. This investment was recognized by recording the Saudi Kayan share of assets, liabilities, revenues and expenses in the financial statements for all relevant years / periods.