‎“Chemanol” incurs losses of 24.6 million riyals during Q3‎

The Methanol Chemicals Company recorded losses after zakat and tax of 24.6 million riyals during the third quarter, compared to a profit of 28 million riyals in the same quarter of last year. This came after today’s announcement of the preliminary financial results for the period ending on September 30, 2023 (9 months).

The operating loss amounted to 18 million riyals in the third quarter, compared to a profit of 40 million riyals in the same quarter of the previous year.

The net loss after zakat and tax in the 9-month period amounted to 84 million riyals, compared to a profit of 222 million riyals in the same period last year.

The loss per share in the current period amounted to 1.24 riyals, compared to a profit of 3.3 riyals in the same period last year.

The reason for the losses during the current quarter compared to the profits of the same quarter of the previous year is the significant decrease in the average selling prices of the main products. It should be noted that the percentage of decrease in average selling prices was higher than the decrease in purchasing prices of main raw materials.

Although the quantities of products sold during the current quarter increased by 32% compared to the same quarter of the previous year, the effect was offset by a decrease in average selling prices by 43% during the current quarter compared to the same quarter of the previous year.

The reason for the increase in the company’s net losses during the current quarter compared to the previous quarter is mainly due to the decrease in average selling prices of products by 11% during the current quarter despite the increase in quantities sold by 7%.

It should be noted that the impact of the decline in selling prices was greater than the impact of the decline in purchasing prices of main raw materials

The reason for the losses during the current period compared to the profits of the same period of the previous year is mainly due to the significant decrease in the average selling prices of the main products by 40%, despite the increase in the quantities sold during the current period by 7% compared to the same period of the previous year. .

It should be noted that the percentage of decrease in average selling prices was higher than the decrease in purchasing prices of main raw materials

During this period, and in view of the fluctuations witnessed in the petrochemical sector and the increasing uncertainty regarding the short- and medium-term demand for some of the company’s products and the expected prices of these products, management reconsidered its business plans, taking into account the latest available information.

Accordingly, during the current period, the company recorded a loss resulting from a decrease in the value of fixed assets in the amount of 3 million riyals.