Petro Rabigh’s losses decline to SR1.14 billion during Q3, by ‎‎18.9%‎

Rabigh Refining and Petrochemical Company recorded a decline in the net loss after zakat and tax in the third quarter to 1.14 billion riyals, compared to 1.41 billion riyals in the same quarter of last year, by 18.9%. This came after today’s announcement of the preliminary financial results for the period ending on the 30th. September 2023 (nine months).

The operating loss amounted to 594 million riyals in the third quarter, compared to 1.14 billion riyals in the same quarter of the previous year, a decrease of 48.2%.

The company also recorded a net loss after zakat and tax in the 9-month period of 3.3 billion riyals, compared to a profit of 696 million riyals in the same period last year.

The loss per share in the current period reached 1.98 riyals, compared to a profit of 0.53 riyals in the same period last year.

-The reason for the decrease in net loss for the current quarter compared to the same quarter of the previous year is due to an improvement in the refined products margin and a slight improvement in the petrochemical products margin. This improvement was negatively affected by the increase in the cost of financing due to the rise in interest rates, in addition to a one-time provision made to meet the claim filed by a third party against the company in the amount of 365.7 million riyals, which was included in general and administrative expenses in the statement of profit or loss. The company objects to the ruling and has filed an appeal with the Supreme Administrative Court

-The reason for the decrease in net loss for the current quarter compared to the previous quarter of the current year is due to the improvement in the refined products margin. The results were negatively affected by the one-time provision to meet the claim filed by a third party against the company in the amount of 365.7 million riyals, which was included in general and administrative expenses in the condensed statement of profit or loss. The company objects to the ruling and has filed an appeal with the Supreme Administrative Court

The reason for the net loss during the current period compared to the net profit for the same period of the previous year is mainly due to unfavorable market conditions that negatively affected the margins of refined and petrochemical products. In addition, the company’s industrial complex was partially shut down in order to conduct scheduled periodic maintenance for the units of the second phase, starting from December 1, 2022 to January 23, 2023.

The ethane cracking unit was also stopped from March 1, 2023 to March 20, 2023 to perform the necessary maintenance work and enhance the reliability of the plant. In addition, financing costs increased during the current period as a result of the rise in interest rates, in addition to a one-time provision to meet The claim filed by a third party against the company in the amount of 365.7 million riyals, which was included in general and administrative expenses in the condensed statement of profit or loss. The company objects to the ruling and has filed an appeal with the Supreme Administrative Court

Note that in the same period of the previous year, the company recorded non-recurring profits amounting to 236.3 million Saudi riyals related to the early settlement of a long-term loan, which was classified as financing income in the statement of profit or loss.

The accumulated losses as of September 30, 2023, according to the summary interim financial statements for the period ending on September 30, 2023, amounted to 5,007 million Saudi riyals, representing 29.96% of the company’s capital, which amounted to 16,710 million Saudi riyals. The main reasons for these accumulated losses are due to the deterioration of market conditions for refined and petrochemical products and the rise in financing costs as a result of the rise in interest rates, in addition to the one-time provision made to meet the claim filed by a third party against the company in the amount of 365.7 million riyals, which was included in General and administrative expenses in the condensed statement of profit or loss. The company objects to the ruling and has filed an appeal with the Supreme Administrative Court. The company will implement the procedures and instructions issued by the Capital Market Authority regarding companies whose shares are listed on the Saudi Stock Exchange and whose accumulated losses have reached 20% or more of their capital.